As we plan for the Due Diligence in the Purchase and Sale of Commercial Real Estate Conference next Tuesday and Wednesday at the Harvard Club in Manhattan, today's Friday Five is on Real Estate Due Diligence. Five things, I offer you, that you should look for when looking to purchase property.
Public Transportation
The bus doesn't need to run right in front of the property, but you want somewhere relatively close by. The harder it is for people to get to you, the harder it is for people to find you, the less likely that they will try.
Municipal Services
Trash pickup is on Wednesday and Saturday. Such familiar words. But if you haven't checked, then how do you know if the town is going to cover your trash expenses or if you're going to have to pay a carting company?
Similar Properties
This is important for two reasons -- the first is simple comparison. If they can make it work, then you should be able to as well. Figure out what they are doing so you can emulate what works. But you also want to look at the market. If there are five strip malls in the area, then you don't want to be number six. Look to see if the market for what you are buying or building can support you. If it can't, move on now. It's cheaper than trying to change everyone's mind.
Zoning Laws
Even if you don't think that this affects you, it does. Even if you aren't redeveloping your property, know the zoning laws.
A story to illustrate my point:
The complex where IncreMental Advantage is housed is a mixed-use retail/office property. It also houses a hotel. It was recently sold a couple of times. The first time, it was bought by a company that wanted to turn it into a hospital. However, because they didn't look carefully, they didn't learn until after their purchase that the property was zoned to disallow a hospital on the ground. They had to flip it. If either they, or the previous owners had done their research, they could have saved some frustration all around.
Halloween Candy
I like this. Zillow's Blog points to a website that claims to have statistics proving that the Capital Hill neighborhood in Seattle has the best Halloween candy in the city. It just goes to show that the Internet is making due diligence easier all around.
The conference starts on Tuesday, and it's not too late to register. I hope to see you there.
To find out more on IncreMental Advantage's Commercial Real Estate Due Diligence Conferences on January 22-23, 2007 (Newport Beach, CA) and May 7-8, 2007 (Chicago, IL), visit www.incrementaladvantage.com/conferences or contact Neomi at neomi@incrementaladvantage.com or 609.919.1895 x100.
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