Investing in real estate for the first time is a significant move that should not be done lightly. Checks and balances to go through throughout the due diligence process before making a purchase are listed below. There are 15 problems that you should not miss: Look at more info Industrial real estate near me
Appraisal and survey are the first two steps. To verify the value, get a copy of the most recent assessment. Other useful information, such as similar building information, will be provided by the assessment. The survey will help determine what is included in the acquisition, which may differ from what the existing building owner is aware of. Knowing about any easements or limitations will aid in determining if the land is suitable for its intended purpose.
- A floor plan and a site plan. If at all feasible, get a CD with CAD designs. This will help you prepare for future space requirements.
Engineering and/or environmental reports are the third and fourth items on the list. These are usually a great source of building knowledge and history.
- A History of Operating Expenses To calculate the property’s net operating income, gather data for at least the previous three years. The more precise the data, the more confident you will be in your cash flow projections.
- Make a budget. What is the current year’s pro-forma budget? Is the present owner intending to make a profit?
- A History of Capital Improvements Has the structure been well-kept? Is there anything that needs to be improved right now, or that will be needed in the near future?
- All Title Policies and Deeds Ascertain that the title is marketable and free of any limitations.
- All Contracts. This covers both documented and unrecorded agreements giving any rights in a property to anybody other than the existing owner, whether via licence, easement, or otherwise.
Certificate of Occupancy (Certificate of Occupancy). Is one available, and if not, is it necessary?
Building Permits are number ten. Obtain copies of any permits granted for additions, significant modifications, or upgrades since the certificate of occupancy was issued.
Taxes are number eleven. Obtain copies of the property’s most recent tax bills, as well as any new notifications of new or pending assessments impacting the property. Get a sense of what the taxes will be after you’ve purchased the property.
Contracts for service and maintenance. Review any existing service and maintenance contracts and make a list of contact names and phone numbers, including landscaping, snow ploughing, janitorial, pest control, garbage removal, sprinkler systems, and alarm or security systems.
Contracts in general. Obtain documents of all building contracts, such as vending services, overnight deliveries, alarm monitoring, and so on.
- Guarantees Determine the building’s warranties, including but not limited to the roof and HVAC systems.
Leases currently in effect. What is the current rent roll’s average term length? Will you be expected to locate renters right away? What are the current rates for leasing?