Due Diligence Mastery – FREE DOWNLOAD

• 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

• 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?

DEALBREAKER QUESTIONS:

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?

• 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

DEALBREAKER QUESTIONS:

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?