I have been speaking with many people over the past couple of days; our topic of choice being due diligence -- in real estate, in hedge funds, in life. But we almost always talk about it from the investor's point of view. Yet, as I was looking over my files today, I found articles and commentary on due diligence going the other way. One article gave landlords five things to examine before leasing to a particular tenant. Another warned of what franchisors look for in awarding franchises. And even yesterday, as I spoke with David, our conversation turned to what kinds of due diligence hedge fund managers might want to complete before allowing an investment.
It strikes me as being more and more important that anyone walking into an investment situation be prepared for all contingencies. And that includes knowing what other people will try to find out about you. You won't get a franchise if your credit is bad, and you won't get a good lease if you've sued your past five landlords. Know the red flags in your history and be prepared to explain them.
At our Real Estate Due Diligence conference on October 24th and 25th, we are going to have a session on pre-emptive due diligence. It's when the seller of a property completes due diligence on their own, so they are prepared, so no surprises come up during the purchase process. I discuss the procedure in this article. It is a process that I recommend for all business transactions, not just real estate. Know how you will be examined and do a self-check before anyone else does.
Remember, I want to know about you, as much as you do about me.
-Posted by Justin
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