The Dos and Don'ts of Conducting Due Diligence on a Real Estate Property

Due diligence is a critical step in any real estate investment. It involves a comprehensive examination of a property and its surrounding factors to ensure that you're making an informed investment decision. Here are some dos and don'ts to keep in mind when conducting due diligence on a real estate property.

The Dos:

1. Hire a professional: Consider working with a professional real estate agent, inspector, and attorney to help you conduct a thorough examination of the property.
2. Conduct a property inspection: A property inspection can identify potential issues or defects that may not be apparent during a walk-through.
3. Verify property information: Verify any information provided by the seller, including square footage, zoning, and permits, to ensure that they are accurate.
4. Review title information: Conduct a title search and review any legal documents associated with the property to ensure that the property's title is clear.
5. Check property taxes: Verify that the property taxes are up to date and determine if there are any outstanding liens on the property.

The Don'ts:

1. Don't skip due diligence: Skipping due diligence can lead to unexpected issues and expenses down the road, so make sure to conduct a thorough examination of the property.
2. Don't rely solely on seller disclosures: While seller disclosures can provide helpful information, they may not be complete or accurate.
3. Don't ignore potential issues: If due diligence uncovers potential issues, don't ignore them or assume they can be easily resolved.
4. Don't rush the process: Due diligence takes time, so make sure to allow yourself enough time to conduct a thorough examination of the property.
5. Don't hesitate to ask questions: If you have questions or concerns during the due diligence process, don't hesitate to ask the seller or your professional team for more information.

In conclusion, due diligence is an important step in any real estate investment. By following these dos and don'ts, you can conduct a thorough examination of the property and make an informed investment decision. Remember to seek professional advice and guidance when needed, and don't be afraid to ask questions and request additional information if necessary.

Marcin Drozdz

The information contained herein is for general guidance on matters of interest only. This information contained herein is not intended to provide you with any advice on financial planning, investment, insurance, legal, accounting, tax or similar matters and should not be relied upon for such purposes. M1 Real Capital Inc, Marcin Drozdz is not a financial, legal or tax adviser. You should assess whether you require such advisers and additional information and, where appropriate, seek independent professional advice. You understand this to be an expression of opinions and not professional advice. You are solely responsible for any actions you take with the content and hold M1 Real Capital Inc, Marcin Drozdz or any of his affiliates harmless in any event or claim.