April 15, 2024

Illuzzi Letter

Envisioning And Creating Your Dream Home

The Seven Key Information Resources of Due Diligence (Investors Guide)

In order to complete Due Diligence on a Commercial Property, take advantage of these seven key information sources. Everyone of these resources should be a trusted expert, and part of your team. Remember they have years of local experience in their area of expertise. Use them as your number one source of Information. Delegate sections of the Due Diligence activities to them and discuss what they find. Get opinions on projections to use as you develop a management strategy of the potential asset.

Here is our list of the Seven Key Information Resources of Due Diligence:

1. Property Manager:

  • Can provide information on the neighborhood, history of similar properties, operating expenses and the type of tenants you will be looking to attract.
  • They will help you build your Proforma and create your Budget.
  • They will perform your Lease Audit
  • They will conduct Market Surveys
  • And your physical site inspection/walkthrough and capital improvement suggestions

2. Attorney:

  • Performs a Title and Survey review.
  • Vendor Contracts review.
  • Reviews loan documents and negotiation of mortgage terms.

3.Commercial Real Estate Broker:

  • Information and communication “go between” to the Seller on your behalf.
  • Rent and Sales Comparables, and Market data research

4. Field Representatives:

  • Drive by inspections of the physical property
  • Checks current Owner’s leasing office as a prospective tenant reviewing current management and Tenants conditions.
  • Provides personal knowledge and experience with this neighborhood and market.

5. Mortgage Broker:

  • Optimizes and assembles information files for the Lender presentation.
  • Provides loan cost information for the pro forma model.

6. Certified Public Accountant:

  • Provides financial analysis of the Seller’s information
  • Creation of your Proforma and Budget.

7. Free Public Information Services:

  • Market Analysis information is available on free, public services.
  • Visit the following websites to update your knowledge. Make them a part of your Favorites folder.
  • Here are a few information sources we use: Costar, LoopNet, Globe Street, Bloomberg, Commercial Property News, Business Week – Real Estate, Wall Street Journal -Real Estate, RIS Media, BIZ Journals – Real Estate, CIRE Magazine