Due Diligence Process

[Rodrigo Pacheco]

I was able to find a home around my area and wanted to get an idea of how to do due diligence for the house before proceeding forward. What are some of the steps/formats I should follow when doing so?

[Jeff Copeland]

One of the main items that falls to you as the buyer is to hire a home inspector, and complete any inspections and negotiations within the inspection contingency or due diligence period defined by the contract. 

Almost all real estate contracts require the buyer to receive free and clear title, so the title work will fall to the title company or attorney closing the transaction. 

It gets a little more complicated with tenant occupied properties, because then you also need to review the leases, get tenant estoppels, verify security deposits and prepaid rent, etc. 

Note that most of this happens after you go under contract. 

If you are talking about underwriting a property for income, expenses, cap rate, and other metrics, then that is really just a matter of collecting accurate income and expense data, from the seller or elsewhere.