Buyers, sellers, developers and investors face similar challenges in pursuit of the ideal real property transaction. You come upon a piece of real property that appears to have potential – either single family residence (SFR), commercial, raw land or other types. You want to find out how you can maximize your position in the transaction, based on the investment model you follow whether you are the buyer, seller, developer or investor.
Whether your real property investment model is to buy and hold, buy/remodel/rent, fix and flip, develop and sell lots or houses or a myriad of other approaches to real estate, each approach requires a smart due diligence process in order to determine 3 things:
- The price a buyer should realistically expect to pay (or get if you are the seller).
- List of items that could kill a project/cost $ if not addressed before property is purchased.
- The best way to move a project forward with the goal of supporting a client’s exit strategy.
So in order to evaluate a project to determine the 3 criteria we’ve stated above, we need to concentrate on how you will get the answers. Several questions quickly come to mind:
- How much time do I need for due diligence?
- For development, what are the key issues affecting this property?
- Building codes/permitting?
- Wetlands, buffer zones?
- Environmental concerns?
- For existing improvements, what are the key issues?
- Deferred maintenance?
- Remodel/new construction restrictions?
- Does sewer/septic work?
- Is power, cable, phone on-site – and working?
- How will my offer change when I vet out these issues:
- The most critical questions to ask:
- How am I going to get all the answers?
- Who can help me?
- Can I get them resolved?
Real Property Solutions NorthWest can help you get the answers you need, find out how or if problems can be resolved and implement those solutions.
Here is an example of how this works:
You tie up a 6 acre property with 2 parcels already titled. One of the parcels is .5 acres with an existing SFR on it and the other 5.5 acres is undeveloped land zoned for a multi-family project. With a signed PSA, refundable earnest money and a due diligence period of 30 days, you begin your process of finding out if you should proceed with the purchase. It would take pages to touch on everything to consider when performing due diligence for a transaction of this size but a few things come to mind:
- Entitlements: Are there engineered drawings for the multi-family units approved by the local jurisdiction?
- Zoning/Code: Can I still build what was approved?
- Environmental/wetlands: What are development restrictions on the property?
- Sewer/water: Sufficient capacity in the area? Quality?
- Storm water: County requirement/flow/soil type?
- Many other types of issues and concerns.
Each of these items take time to review, determine applicability and status. This is where Real Property Solutions NorthWest can help. Call on us and we will work with you during your due diligence to help get the answers you need.
Take a look at the rest of the site to see what other services we have to offer and how we can improve the value of your real property.