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:
Lee & Associates has navigated this process hundreds of times. Here are some actionable tips for each stage of the process:
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?
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:
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 firstname.lastname@example.org.