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Investing Strategies

Your First Apt Deal: A Due Diligence Crash Course

nerdMogul’s operations manager, Jason, claims to have never met anybody (except us) who gets excited about the idea of due diligence.

“Not even that über nerdy guy in my Real Estate Investing class at NYU!” he insists.

And I can understand why...

When you stop to think about it, the word “due” is rarely associated with anything good or exciting.  (Bills, anyone?)  And the word “diligence” only seems to conjure images of a slow and steady turtle – or perhaps Andy Dufresne’s character in The Shawshank Redemption.

However, despite its rather uninspiring connotations, a well-executed due diligence process is absolutely vital to your success as a real estate investor.  And it is especially important for anybody who has decided to test the waters of multifamily investing.

Sidenote:  Have you recently decided to begin testing the waters of multifamily investing?  If so, be sure to check-out the first lesson in this young series – focused on Smart Market & Property Selection – before commencing your due diligence on any interesting apartment buildings.  That way, you can minimize the possibility of conducting any unnecessary property-level research!

dummiesChris Urso Provides A Masterful “Crash Course” for Due Diligence

Even though the term “due diligence” may lack the exciting caché of running with the bulls or flying to the moon, we don’t need to treat this subject as sheer drudgery, do we?  No!  Not at all!

In fact, Mogul’s in-house multifamily specialist, Chris Urso, has provided a great way for you to cover everything you need to know about initial multifamily due diligence.  And it only takes 15 minutes (and 44 seconds) to review the entire thing in today’s video lesson!

Think of it as Chris’ personal Due Diligence “Crash Course” for new multifamily investors.

And who is Chris Urso?  Well, for those of you who aren’t familiar with his previous Mogul lessons, Chris Urso is a long-time real estate investor who now (i) controls over $15 million of multifamily real estate and (ii) structures investment partnerships to acquire large apartment complexes.  Additionally, as a mentor and coach for rookie investors, Chris also stays busy teaching others how to mirror his own investing accomplishments, including these previous Mogul lessons about multifamily real estate:

So, without any further ado, buckle your seat belt (and hold on tight), because you’re about to get kicked in the brain by Chris’ introductory Due Diligence “Crash Course”!

Chris Urso explains the vital role of thoughtful due diligence …

{Mogul Elite: Download a transcript and MP3 of this lesson in the Power Pack tools for this lesson.}

Do It To It! Immediate Action Steps

Change Your Mentality.  Don’t be skerd!  Decide you are gonna do it, and have faith when you take the jump.

Find a Lender.  If you need help with finding a good lender, beware of bank financing specifically for multi-unit properties – and use Real Estate Mogul’s numerous fundraising resources to help guide you through the process.

Pick Your Property.  Research your markets thoroughly, crunching all the necessary numbers. Don’t go in blind, but when you see a great opportunity submit your Letter of Intent.

Go through Every Piece of Documentation.  Make sure to include a lease review. Look over every single lease and compare it to rent-roll.

Know Your Timeline.  Once you are under contract and dealing with due diligence items, remember that time is of the essence! Make sure you know when your contingencies are scheduled to expire.

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