Hub, Spoke, and Flex: Envisioning future office location strategies | DOWNLOAD THE REPORT→
due diligence

Startup Aims to Help Commercial Real Estate Brokers and Buyers Navigate Due Diligence Maze

Due diligence is the most important part of any real estate acquisition. Finding the deal is one thing but analyzing and properly doing the due diligence is pivotal.  This is the time when you find out if you’re buying a good deal, or you’re not. The due diligence process during a commercial asset acquisition can be cumbersome. Beyond the usual property inspection, appraisal, title and survey, there are many more hidden dangers for any property.

Having a thorough yet speedy process can be the difference between making a great property purchase or having a deal fall through. Many commercial deals go sour or become frosty after the due diligence period has expired, due to buyers and buyers’ agents not properly negotiating this important part of the contract. During the negotiating process, an attorney is recommended to properly word the due diligence terms and level the playing field between the seller and the buyer but, legal counsel can only protect you against what you know about the property. That is where the art of a due diligence process comes in, it can be the only way to really get a good idea of the “unknown unknowns.”

Author and real estate coach Brain Hennessey wrote a book on this very topic. He says that “having and adhering to a proven system allows you to do it faster, easier, as well as more efficiently, and you’re less likely to miss something.” The problem is, although most professionals create their own due diligence checklist over time, it usually ends up stale somewhere on a desktop folder.

That’s why our team at CREDiligent has been working hard. Our newly released phone and web application is a task list made specifically for commercial real estate purchases. The application is free and simple to navigate. Once a user logs in and creates a property card, the task list is automatically preloaded, with the ability to add custom tasks.

Most of the pre-loaded tasks have an information box explaining the task. A user can go through the task list, check them off as they are completed, fill in comments under each task and add deal-related contacts such as surveyor, attorney, title company, engineer, appraiser, etc.

We realized that even with the ease of use that having all the information on the cloud facilitates, many people like to have a written file to help them organize their process. So, we designed a way for users at any time to print out a PDF report with organized details of the deal, task progress and deal contacts, so it’s all in one place. The report serves as a guide thru the acquisition process and will remain one of the most important documents on the property folder.

Coming from the commercial real estate brokerage and investment world, we found that many investors and commercial real estate brokers often miss or don’t realize some of the tasks that need to be performed in order to maximize the outcome of the acquisition. The app lists what needs to be done in a concise, clear platform that facilitates the process, allowing the buyer and/or their broker to focus on what is important – whether the deal is a good purchase.

Our app is free to download for unlimited use and handles multi-properties. The task list includes the often-missed items such as CapEx review, CAM review, code violations, ADA report, association documents, tax appeal, third-party contracts, flood hazard report, infrared roof scan and more. The Closing checklist reminds the buyer to review closing prorations, get estoppel letters and lease assignments, and other very important tasks. Beyond the instrumental tasks embedded into the app, we found that it was important to include free access to vital forms such as lease abstract, property economics spreadsheet, property info sheet, loan amortization spreadsheet and tenant questionnaire, downloadable on a desktop computer.

Any important task needs to be done using a checklist. When it comes to the risky and lengthy process of buying a commercial property, having a list that can be accessed and update at any time, will make the due diligence process much easier and more manageable.

Your email address will not be published. Required fields are marked *

Propmodo is a global multimedia effort to explore how emerging technologies affect our built environment.

More Stories
Here’s How Your Property Management Software Determines Your Tech Stack