Due Diligence Mastery – FREE DOWNLOAD

Lee and Associates - Charleston, SC | Due Diligence Mastery - FREE DOWNLOAD
Buying a Property?

Major metros in South Carolina continue to boom. But with economic uncertainty looming, site selection has become more competitive. This puts increased importance on Due Diligence, or diagnosing what makes or breaks a potential property purchase.

Questions like the following are getting harder to answer:

  • What happens when the only site available in your desired location has a lot of issues? 
  • How do you mitigate those issues and discover what you need to know?
  • How do you know you’re spending money on a feasible site, and not a money pit?

Lee & Associates has navigated this process hundreds of times. Here are some actionable tips for each stage of the process:

Prior to Submitting Offer
  • Check FEMA Flood Maps
  • Climate Check Website
  • Zoning – setbacks, parking ratios, uses, etc. Does the current zoning work? What is the rezoning process?
  • Approval process timeline: Talk with municipality to ensure the due diligence period reflects reality
  • Check tax assessor to see if property taxes are paid
  • Search the register of deeds for plats, deeds, easements, restrictions and covenants, liens, and mortgages
  • Conduct site visit (see below for FREE checklist download)
  • Conduct market study and analyze comps
  • Line up architect, civil engineer, and attorney
  • Check Secretary of State website IF property owned by entity to identify agent
  • Back of the envelope pro forma
  • Confirm sewer, water, power, and gas
  • Determine if there are impact and tap fees
First 30 Days
  • If existing property, ask for current and historical Income + Expense documents
  • Title Search to be performed by attorney
  • Hold an informal meeting with the municipality based on your preliminary plan
  • Phase I Assessment - Are there any issues that warrant further investigation? Do these conditions warrant utilizing the SCDHEC VCC Brownfield Cleanup Program
  • Asbestos/Lead Paint Testing 
  • Survey with tree, topography, wetlands (edit for early 2023: it is critical to contact the surveyor as early as possible due to limited availability)
  • Geotechnical testing to include test pits and/or soil borings depending on product type and location
  • Confirm with lender if an ALTA survey is required
  • ROM Construction numbers
  • Engage with lenders about possible loans/financing
  • Are there any existing leases on the property? Do they need to be terminated before closing? Do you have copies of the fully executed leases? Has your real estate broker collected estoppel certificates from each tenant?
  • If it's an existing building, consider conducting a water test on the façade. Look for signs of water issues around windows, walls, and ceilings. Have architect/general contractor walk the building and conduct a survey for water damage. Are there signs of water damage on the exterior of the building? Are the gutters intact and draining correctly? How does the flashing and caulk look?


Does the zoning work? If not, can you get the time to rezone and are you willing to take the risk?

Is there enough developable land to do what you want to do?

What is the impact of soil and wetlands on this project and what is the cost?

Is the title search acceptable? If not, can the issues be solved or unwound? Are you willing to spend the money on an attorney?

Is a Phase II Environmental required? If so, heavily consider the SCDHEC VCC Program. How much of the asbestos is friable vs non friable and is the amount a deal killer?

31 Days Prior to End of Due Diligence
  • The main portion of this period is to reduce risk and mitigate as many issues as possible prior to closing
  • Develop submittals for public hearings and submit to get on the local agenda
  • Develop space fit plans to ensure an accurate pro forma
  • Work with architect to anticipate code issues
  • Work with contractor on construction numbers and timeline 
  • Utilize updated plans and due diligence to improve accuracy of construction numbers


Are there any issues related to soils, wetlands, trees, topography, or the site that cannot be mitigated or solved in a cost-efficient manner? If not, is the additional expense worth it based on the pro forma? Do you have time to get the required wetlands permits?

If you need the leases to be terminated, can they be? If not, what is the mitigation plan?

How did the public hearings go? Is the site properly entitled? If not, are you willing to take that risk?

Are there risks related to the building or land that cannot be quantified before the inspection period runs out? If not is the risk bearable?

Are there any code issues related to an existing building?

Hopefully these items help and can serve a guideline for your due diligence property. Each product type has its own nuance, and each property WILL be different. A few more quick tips from our firm’s recent due diligence journeys:

  • Take the title search very seriously and always review any of the legal documents that it unearths.
  • Review the zoning thoroughly and ask the municipality a lot of questions about it.
  • During a tour, confirm when things are in-place, and take note when something isn’t.
  • One area that creates a lot of issues is the lack of recorded easements. Be thorough when evaluating easements.

But above all, FOLLOW A DUE DILIGENCE PROCESS. Having an organized routine in place during the property purchase can eliminate major headaches down the road. 

To assist in your journey, below is a FREE Property Walkthrough Checklist download.

And if you have any questions, please email me at jbakker@lee-associates.com.

FREE Property Tour Checklist

Be prepared to document any issue and save a future headache...