Property Due Diligence - Where and How to Get It

There are several ways to find information on a particular piece of real property you are interested in purchasing. The following are the most common ways to obtain the information:

1. Property for Sale Signs, Newspaper Ads or Internet Websites. Look for “for sale” signs on the property, ads placed by the owner or real estate agent in local newspapers or on internet websites. Most of the information can be obtained by calling the owner or realtor or emailing them. You should request information such as any written materials about the property, i.e. inspection reports, copies of permits, plans. The more information you initially obtain, there is less risk of surprises later.
2. Public Records. County tax appraiser websites or county tax records contain public information tax mistakes the property such as the date it was purchased, the current appraised value, amount of taxes, sq. footage tax property dimensions, owner’s name, address and phone number.(Check with local county and city planners to see if any reports, applications, permits or other information have been filed with their offices regarding the property.)
3. Realtor: Local realtors have access to the local Multiple Listing Service (MLS), public tax information and other websites and software which enable them to obtain and analyze the property information for you and there is usually no charge for this service. Realtors are interested in assisting potential buyers/developers with this information tax mistakes that they may represent them on future transactions.
4. Land Auctions. If the property is going to be sold at a real estate land auction, the auction house will have due diligence packets containing reports and other information about the property which will be delivered to prospective buyers who have registered to bid at the auction. Check the land auction company’s website or call them and request as much information as possible.
5. Other Investors, Developers, Business Acquaintances, Attorneys, Accountants, Friends or Family. Talk to other investors or developers in the area who may have information on the property. Also ask business associates, attorneys and accountants whose clients may be real estate investors. Speak to friends or family who live in the area you are interesting in purchasing or do business in that area as they may have previously inquired about the property and have obtained information they are willing to share.
6. Visual Inspections: By walking around the property you can see first hand any noticeable visual defects. Be aware of noises, smells. Are there any buildings, utilities, fences or sheds from neighboring properties that may potentially be encroaching on the property? Are their shared roads or any other shared easements or common areas that affect the property? Any environmental concerns, such as oil wells on or nearby, factories, water, streams, lakes, wetlands? If so, ask questions, request reports. Any one of these items could be a potential issue if approvals have not been legally obtained.

   Property Inspections. Soils reports, geological reports, and environmental impact reports. These inspection reports will give you information about any issues that might impact the condition of the property and your future development plans.

By conducting preliminary investigations and due diligence investigation, consulting with real estate professionals and putting together an experienced development team of architects, engineers, attorneys, etc. you can avoid major and costly mistakes down the road. Knowledge and investigation are key factors to making a financially rewarding and smart business decision.

A great resource for understanding the property development process is http://propertydevelopmentsource.com From property due diligence and determining land feasibility, to hiring your team and estimating the costs and value of a project, property development source will teach you all you need to know.

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