Rookie Reply: What is Due Diligence in Real Estate?

Abstract

Because you're doing due diligence on your property in New York, too. During our due diligence process, we flew out to New York, and we saw the property in person, talked to a lot of local people. Yeah, let's do due diligence today, because I have a property, too, that also fell out of contract because it did not pass inspections, and we got out of the contract before our due diligence period was up. You can go and do your due diligence on it and see what kind of costs are going to be associated with purchasing that property. Just to break down, the risk of that property not being able to get title insurance means that, say that someone else was on title or has some kind of stake in that property, after you purchase it, they could go back and say, "Hey, I actually owned 50% of this, and I need my money, or I need ownership, or X, Y, Z." Now it becomes a very dicey situation. What will work for the property and can you get financing on them? And not even for how you're going to acquire the deal, how you're going to purchase it, but if you plan on refinancing down the road, make sure that you can refinance. The second thing besides the financing is talking to people that issue the permits that regulate the property, especially commercial property.