3 Due Diligence Steps You Must Perform Before Purchasing Commercial Real Estate
As the real estate market continues to remain strong in South Florida, you may find yourself entering into a new commercial real estate transaction in the near future.
Highly experienced real estate investors leave no stone unturned when it comes to due diligence. The more effort and time that you spend on it, less of a chance that you’ll find a costly surprise after your deal is finalized.
You’ll also want a Fort Lauderdale commercial real estate attorney available to guide you through the process. Although there are many due diligence steps that you’ll want to take care of before you make a purchase, below are 3 that you’ll want to almost always take care of before your closing.
Examine every document associated with the building
Take the time to fully examine every single document that you can find associated with the building such as all leases, mortgages and notes, insurance documents, title policies, rent rolls, contractor agreements, maintenance histories, tax receipts, and literally any other relevant document that you can find.
It’s a good idea to hire a commercial real estate lawyer in Fort Lauderdale to help you sort through these documents. An experienced lawyer will be able to quickly spot areas of concern that you might miss out on.
Know the seller
The reputation of the current owner of the property can affect your potential future earnings. You’ll also want to avoid doing business with a seller that has a history of property disputes.
So, get as much information as you possibly can about the seller including their reputation, track record, standing, and other relevant information.
Ask for documents related to the financial status of any entities that own the property you are purchasing, tax returns, prior use of the property, or any past litigation history.
Find out about the tenants
With tenant quality being a primary concern in a commercial real estate acquisition, you’ll also want to acquire as much specific information about current tenants as possible.
This can include credit reports, payment histories, and relevant business information. Simply having a brief conversation with a current tenant can yield a significant amount of information.
Get an attorney to assist you with due diligence
Despite your best efforts, there may be some due diligence steps that you miss out on simply because there are so many of them.
Working with a commercial real estate attorney in Fort Lauderdale will help you cover every important due diligence step and ensure thorough research before your next big transaction.
Contact Schecter Law today at (954) 779-7009 for any due diligence related questions that you may have about an upcoming commercial real estate purchase.