How do you manage the due diligence timeline and communication with sellers and lenders?

1 Set realistic expectations

Before you start your due diligence, you need to have a clear understanding of what you are looking for, how long it will take, and what resources you will need. You also need to communicate your expectations to the seller and the lender, and make sure they agree on the scope, timeline, and deliverables of your due diligence. You should also establish a contingency plan in case of unexpected delays or problems, and include a clause in your purchase agreement that allows you to extend or terminate the due diligence period if necessary.

2 Organize your data and documents

One of the most time-consuming and tedious aspects of due diligence is collecting, reviewing, and analyzing the data and documents related to the property. You will need to request and obtain information such as property surveys, title reports, environmental reports, appraisals, rent rolls, financial statements, tax records, insurance policies, contracts, permits, and licenses. You should organize your data and documents in a secure and accessible platform, such as a cloud-based data room, and use a checklist to track your progress and completion. You should also assign roles and responsibilities to your team members, and use tools such as calendars, reminders, and alerts to manage your deadlines and tasks.

3 Conduct thorough inspections and assessments

Another important aspect of due diligence is conducting physical inspections and assessments of the property, such as structural, mechanical, electrical, plumbing, roofing, landscaping, and parking. You should hire qualified and experienced professionals to perform these inspections and assessments, and provide you with detailed reports and recommendations. You should also visit the property yourself, and observe its condition, functionality, appearance, and marketability. You should compare the property to similar properties in the area, and identify any potential risks, liabilities, or opportunities for improvement.

4 Communicate regularly and clearly

Throughout the due diligence process, you should maintain regular and clear communication with the seller and the lender, as well as your team members, advisors, and consultants. You should update them on your findings, issues, questions, and requests, and seek their feedback, input, and approval. You should also document your communication in writing, and use formal and professional language and tone. You should avoid any misunderstandings, conflicts, or disputes that could jeopardize your deal or relationship. You should also be respectful, courteous, and cooperative, and address any concerns or problems promptly and effectively.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?