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Commercial Real Estate Investing

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Pope Lake
  • Investor
  • New York City, NY
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82
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Due Diligence Reports

Pope Lake
  • Investor
  • New York City, NY
Posted Apr 7 2020, 19:27

Hi BP! How do you pay for and time the various due diligence reports that need to be completed during the due diligence period of an apartment building being under contract? 

I know that several DD reports have to be done during the DD period (ex: financial document audit, PCA, ESA) but is there any sequence in which these are conducted? For example, if an ESA is done and it finds substantial environmental contamination on the grounds, then it might not make sense to do the deal. But what if you've already paid for several other DD reports before finding this out? Are these sunk costs at this point? 

Furthermore, I'm curious how these costs are paid for - whether out of the capital account, your own pocket, etc. 

Thank you! 

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