The Particulars of Due Diligence

When you submit your LOI and you’re going to start your due diligence process, before you submit your LOI, you know if you have a pretty good shot at getting deal, right? You’re pretty far along. I just ask that you engage us at that point, right? So that we can go okay, we have this property, we kind of market on our board and set up our teams and what not to do that. Then, once you do it, you have your due diligence period. I’ve seen them with smallest 10 days, up to 30 days, you have to go in there and do it.

Full episode: https://lifebridgecapital.com/2019/09/ws316-the-particulars-of-due-diligence-with-dax-ferguson/

We schedule it within that time frame and we need two days to set it up in the software before we show up. We need at least two days’ notice. Not, "Hey, I’m closing, let’s go." It’s pretty easy for us to set up on our end, we’ve automated as much of it as possible. But you know, we need kind of the stuff we need from you, are what building numbers and what units are in those building numbers and are they on the first floor or second floor and then what floor layout they are. You know, you may have eight different layout types or floor plans for that property and we want to make sure that we have each one of them. So that when you get your report, it’s as intuitive as possible for you. You know that, you know, floor plan A1 is a one-one and floor plan, A3 is a three-two and we can show you the report just for those. If you want to look up hey, how are my three bedrooms looking and then you look at which one of those you look at the picture report on that. It gives you so many different ways to do it and look in there if we have that information. The two days is important there. On average, it takes a four-man crew which is what we send out to do it. They can do a hundred units a day. If you have 150 units, we may add six guys to get it done in a day but typically, we try to stay about a hundred units a day and come in and come out. Then you’ll have your report within 24 hours of us finishing with drone footage and we’ll put it all together in there for you.

It comes out as an interactive report, it’s in the cloud, it’s not some PDF I’m going to send you and you’re going to have to flip through every page. Great thing about it is, if you’re a spreadsheet guy, it’s a spreadsheet report and you can just look at the spreadsheet report which is very easy to understand. Unit 511 and here’s your appliance section of this report and here’s what needs to be done, here’s what’s good, bad or needs replacement or it’s missing, right? You’ll even have those categories on there and that goes through every unit. But it blocks thee units on that report also down in there where your two bedrooms are together, your three bedrooms together, your one bedrooms are together or every floor pan tied if you have several different floor plans of each. It kind of breaks it up to you till you see it that way. And then, at the bottom, it gives you, "Hey, you need 23 dishwashers on this whole property, you need 14 microwaves," that are missing or need replacement and on the other section of this report which is the cost replacement report. It gives you the prices associated with those. We’ve put in there all the dishwasher is $600 to replace one and I’m just making up a number here. You know, $600 to replace one and then extrapolates 24 times six and it’s at your number. Same thing with refrigerators and all the other stuff that’s you know, categorized like that. One thing you need to know is we price it in a way that if you have to replace one, the number works or if you have to place 24, it’s going to be high, it’s going to be on the high side. The reason we do that is because we don’t know going in how many need to be replaced. Just be aware of that we’re doing it to protect you guys, not us.

Full episode: https://lifebridgecapital.com/2019/09/ws316-the-particulars-of-due-diligence-with-dax-ferguson/