If you’re interested in purchasing commercial real estate, make sure there is a due diligence period included in the contract. Not only that, but you must take advantage of this period to the fullest; you don’t want time to slip away from you.
What is Due Diligence in a Real Estate Transaction?
Due diligence is the period of time a buyer has to investigate the condition of the property and all the paperwork that comes with it. A seller is required to disclose any issues that may be of interest, however, they are not always known at the time, or they are kept hidden.
What You Should Look for While Doing Your Due Diligence
When entering the due diligence phase, you’ll want to inspect as much as you can, so you aren’t hit with surprises later on down the road. Areas of due diligence may vary depending on the circumstances of the purchase, but here’s a few things you’ll want to focus on.
- Carefully review insurance policies, and taxes for defaults or defects.
- Audit all financial records and expenses such as service contracts to see what you’re buying into.
- Inspect the condition of the interior/exterior of the building and note areas needing repair.
- If there are existing tenants, check their credit and payment history to see if they are a risk.
Buyers are responsible for the costs of inspections, so take full advantage of the time you have. You’ll also want to be sure you have the right to terminate declared in your contract; in case you find this isn’t the best property for you.
Do You Need a Hard Money Loan in Atlanta?
If you’re looking for a hard money loan in Atlanta, we may be able to help you.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.
Read our frequently asked questions and take a few minutes to learn about the hard money loan process.