Why Due Diligence is VITAL in Real Estate (Or How Something Buried Underground Killed 2 Deals)

Why Due Diligence is VITAL in Real Estate (Or How Something Buried Underground Killed 2 Deals)

1 min read
Matt Faircloth

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, N.J., is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa creates partnerships to finance select real estate investments and has a proven track record of providing safe, profitable investment opportunities to their clients.

Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to hundreds of units in residential and commercial assets throughout the East Coast. Under Matt’s leadership, DeRosa has completed tens of millions in real estate transactions involving private capital, including fix and flips, single family home rentals, mixed-use buildings, apartment buildings, and office buildings.

Matt is an active contributor to the BiggerPockets Blog and has been featured on the BiggerPockets Podcast three times (show #88, #203, and #289). He also regularly contributes to BiggerPockets’ Facebook Live sessions and teaches free educational webinars for the BiggerPockets Community.

Matt authored the Amazon Best Seller Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money. The book is a comprehensive roadmap for investors looking to inject more private capital into their real estate investing business and is a must-read for anyone looking to grow their business by using private lenders and equity investors. Kirkus, the No. 1 trade review publication for books, had this to say about Raising Private Capital: “In this impressively accessible introduction to a complex subject, Faircloth covers every aspect of private funding, presuming little knowledge on the part of the reader.”

Matt and his wife Liz live in New Hope, Penn., with their two children.

Matt earned a B.S. in Industrial and Systems Engineering with a minor in Business from Virginia Tech. (Go, Hokies!)

DeRosa Group’s YouTube channel

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As you all know, you are buying everything that comes with a property. That includes the good things like rent-paying tenants. But it could also include bad things that could come back and cost you lots of money in the future! Doing your inspections and investigations is extremely important on a purchase. You need to find the easy things like deferred maintenance on the building, but also need to do a deeper search for those things lying just beneath the surface.

We are in the middle of two purchases right now, and BOTH of them have something hidden underground that could’ve cost us tons of money if we purchased the properties without knowing. Watch the video and find out what it is!

What issues have you discovered before a purchase that would have cost you money? Did anyone out there buy a property with a problem they didn’t find out about until after closing? Has anyone had a Phase 1 Environmental Study performed and discovered an issue?

I look forward to hearing from you! Have profitable week.

Don't think proper due diligence is worth your time? You may want to think again when you read this investor's tale of two deals gone bad!