Often times when we think of doing due diligence, we think
it means checking things over that are physical with a property.

But it also means “Market Due Diligence”, “Legal Due Diligence”,
and  “Financial Due Diligence”.

In market due diligence, you want to find out want the vacancy
rates are in the surrounding commercial properties.

If they are experiencing 80% occupancies rates, then there’s
no reason you shouldn’t be able to achieve the same, all things
considered…unless there’s a problem with the property, which
is why you’re researching this.

Also, you want to find out what comparable rents for 1,2,3
bedroom apartments in that area to see if the apartment complex
you’re considering is the same, high or low.

When considering legal due diligence you’re focusing on zoning
and what can be done with the property. This is particularly
important if you ever want to do a condo conversion.

Then there’s financial due diligence. When the owner of an
apartment gives information on it, there are financial numbers
that are presented.

It’s important that you make sure these numbers are correct
and being appropriately represented by checking financial
statements, back accounts, tax records, etc.

I’ll share more with you soon…

Warm Regards,

Karen Hanover, CCIM Candidate
Apartment Education Institute, President

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