Commercial Due Diligence Process

The due diligence process is complicated. Proper due diligence will include six main areas of concern. These areas are property information, building systems, inspections, and reviewing all related reports, tenant information, seller disclosures, and financial modeling for the future of the property.

Each area has it’s list of documentation you will want to review before clearing any purchasing contingencies.

• Some of the property information you'll want to review is the: title policy, property surveys, legal description, zoning compliance, and covenants, to name a few.
• For the building systems, you'll want to review any engineering and environmental reports.
• Inspections will cover anything from rental unit compliance for housing standards to plumbing, electrical, rodents, insects and radon.
• Give the current lease, including any non-standard agreements, a thorough review. This is more efficient with a lease abstraction. If a lease abstraction is not available, review any rental payments, secondary income sources, security deposits, lease terms, and exclusions.
• Seller disclosures are an area of due diligence you don't want to take lightly. To get an accurate picture of the property's capability, you'll need a full report of all the: accounting, income and expenses, tax statements, operations and maintenance contracts or agreements, permits, insurance, any pending litigation, and any personal property used in operations and maintenance.
• The last point of due diligence to consider is the future forecast for the property. If the purchase goes according to plan, does the property meet your standards and portfolio goals?

Benefits of Commercial Due Diligence

When purchasing a property, you don't want past legal, tenant, or property condition issues to impact you in the future. By taking the time to verify the hundreds of documents and data points, you can confidently see how a property can affect your portfolio. Proper due diligence provides valuable insight into an opportunity, reduces risk, and limits surprises.

The commercial real estate analysts at the Services Hub are well versed in due diligence can be a time saver and help you avoid costly mistakes from hasty decisions.

• a real-time snapshot of management performance
• ability to know if a property has the potential for income improvement
• insight into potential property maintenance and repair issues
• ability to estimate the downtime of current vacancies and when there will be future vacancies

Why Should you get a Due Diligence from Clik.ai?

Clik.ai has been helping Commercial Real Estate investors, brokers, lenders, and managers with proper due diligence since 2017 and have helped identify $12 Billion in commercial real estate opportunities.

By working with the Servicing Hub, Commercial Real Estate investors and lenders can reduce operating expenses, stay competitive, free up time to focus on customer relationships, and spend time on deal analysis rather than due diligence.

When looking for a company to help with due diligence, consider the Services Hub. Our on-demand team of commercial real estate analysts are experts in due diligence, lease abstractions, lease audits, automated underwriting, commercial loan abstraction and much more.

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