Due Diligence Reports
Over the years, CTM has been engaged by a wide range of multifamily investors, from private individuals to institutional investors, who want to make sure they cover all areas of inspection when making a significant investment. Regardless of the nature of the proposed acquisition, we advise each client as if we were making the purchase and make every effort to perform our review with attention to detail.
We often uncover physical and financial problems with assets that require additional capital expenditures or other resources that sometimes, do not come to light until after the purchase. There are a multitude of details which must be considered when acquiring a multifamily property, and many of these details are easily overlooked. Our highest priority is to independently verify all representations made by a seller, and to uncover pertinent facts which have not been disclosed to the client .We provide thorough investigations of physical and financial operations to protect our clients.
A comprehensive due diligence inspection should provide an investor with a clear picture of their potential acquisition, enabling the investor to plan their strategies and make decisions in order to maximize the full potential of the investment.
- Prepare a complete due diligence report within 7-10 calendar days following site access.
- This includes inspecting each unit, analyzing the current operating budget and financial reports, including a report of all deferred maintenance.
- Rental comparison and analysis of competing properties and market rents.
- Analysis of possible capital expenditures needed to stabilize or enhance the value of the prospective property.
- Market overview and sub-market description including demographics and economics.
- Lease file and delinquency report audit.
- Current planning and zoning review with emphasis on impact to property operations, including contracting environmental and engineering reports.
- Review of security and safety issue, including a visit to local law enforcement is necessary.
- Thorough analysis of historical financial information.
- Analysis of Operating Statements, Income & Expense, Profit & Loss and cash flow reports.
- Draft management plans and capital improvement budgets.
- Meetings with investors, lenders and/or third party affiliates of the client.
- Interviews with existing personnel and evaluation with staff report.
CTM is well suited to provide due diligence because of our extensive experience in construction and property operations. This means we will have identified problems that otherwise would have taken months to find and solve. By assisting in the due diligence process, we are better prepared for the imminent takeover of the property and planned modifications can be implemented immediately upon the change in management.