MANY PEOPLE make the mistake of carrying out the due diligence study BEFORE they acquire their commercial properties.
This can end up becoming a very expensive process — because you can often miss out on the property, whenever someone else snaps it up, before you complete your study.
Therefore, the secret lies in ensuring you negotiate a deal — where your due diligence occurs AFTER you have tied up the property, under a binding contract of sale.
Due Diligence Scope of Works
To carry out a thorough due diligence study requires you to engage some expert assistance. And you can certainly use my Trusted Consultant to help you with that.
In any event, you will need to come up with a detailed Scope of Works — to make sure every aspect of your intended purchase is looked at.
To provide you with some idea of where to start, here is an overview of the various key items involved.
- Architectural, Structural & Civil aspects
* Building facade, walls, roof, etc
* Driveway, car park, stairwells etc
* Entry lobby, floor finishes, amenities, etc
- Engineering Services
* Mechanical items
* Electrical services
* Hydraulics & Fire Protection
- Base Building Information
Review all documentation relating to:
* Architects plans
* Services drawings
* Operating manuals
* Maintenance contracts
* Building certificates
* Engineering services
When they are done thoroughly, these due diligence reports could cost between $1500 and $5000 — depending upon the size and complexity of the actual building itself.
However, they will prove be the cheapest insurance you ever take out — to validate that you are purchasing the precise building you thought you were.