Digging Deeper: Why Basic Due Diligence Isn't Enough
Newsletter #014 | September 13, 2023
Dear Subscriber,
Owning the deed to a property might give you a sense of accomplishment, but the true mastery lies in understanding what you actually own. A critical, often overlooked, stage that comes after securing a property is comprehensive due diligence - a step that goes far beyond legalities and paperwork to ensure your investment is sound.
The Oversights That Cost You
Eagerness to forge ahead with development often leads to glossing over the fine details of due diligence. While you may be tempted to consider this a cursory step, skimming here can result in expensive, project-derailing surprises down the line.
The Common Shortcut
Many developers settle for the basic elements like title checks, zoning compliance, and primary environmental assessments. Important as these are, they don't offer a complete picture. Skipping deeper aspects such as soil reports and utility studies can lead to unanticipated challenges.
Why Basic Due Diligence Isn't Enough
Meeting minimum requirements like title clearance and zoning might make you feel secure, but you might still encounter issues like poor soil quality or lack of utility access that can halt your project in its tracks. The more you know about a property, the better you can plan for a successful development.
The In-Depth Approach to Due Diligence
Successful property acquisition involves more than just crossing 't's and dotting 'i's on legal documents. It entails a 360-degree view, from soil and environmental evaluations to utility studies and more, to ensure that you're fully prepared for the development phase.
Recommended Action Steps
Invest in Detailed Reports: Don't stop at basic checks. Comprehensive soil and environmental reports can unearth issues that you might need to address before breaking ground.
Examine Surveys Carefully: Studying topographic and boundary surveys can shed light on essential issues like easements, encroachments, and even potential for land disputes.
Consult Utility Studies: Understand the availability and capacity of essential utilities. It's crucial to consider future needs alongside current requirements.
Assess Traffic Patterns: For both residential and commercial projects, understanding the local traffic flow can provide insights into accessibility and the potential success of your development.
Seek Professional Input: Assemble a team of experts, from environmental consultants to surveyors, who can help you make informed decisions and avoid pitfalls.
In conclusion, due diligence is not merely a formality but a strategic element that minimizes risks and paves the way for a more streamlined development process. By taking a comprehensive approach, you position your project for success while safeguarding your investment.
Bonus Material
Strategic Guide
Discover the secrets to successful real estate scouting by grabbing a copy of my book, "Money Maps: Strategic Guide to Profitable Real Estate Scouting", which provides a detailed guide on how to maximize property investments. If you're ready to take your knowledge and understanding of buying real estate to the next level, click here to secure your copy today.
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Best regards,
Robert Zalkin
Founder and Editor-in-Chief, Property Potential Newsletter