Due Diligence - Two Step Check List - Escrow and Equity Source

By: Richard Sorrentino Real Estate 1 Follower

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What if you discovered a simple list that you can use to begin preliminary due diligence? Here is our two step check list to use for a commercial property acquisition Escrow and the Equity Source. It is part of a series of articles provided to track your progress from Market Analysis to close of transaction. This series will provide a complete due diligence format in the form of a checklist that will help you uncover hidden assets and expose hidden liabilities you may face when acquiring a commercial property. Follow  this next list to begin preliminary due diligence after you submit your letter of intent, and it is accepted by the seller:


1. Purchase and sale agreement received by escrow.  yes or no

2. Deposit sent and receipt acknowledged by escrow. yes or no

3. Critical Dates letter received and acknowledged. yes or no

4. Assign a Closer/escrow agent to file. yes or no

5. Staff  transaction coordinator makes initial contact with closer. yes or no

Equity Source

1. Is Equity confirmed?

2. Non disclosure agreement  and non-circumvent signed by investor(s). yes or no

3. Preliminary agreement signed with investor(s). yes or no

4. Send all preliminary numbers to investor(s). yes or no

5. Equity transfer calendar dates agreed to. yes or no

6. All required documentation is sent to equity provider. yes or no

7. Closing and Funding date agreed on. yes or no

This list is the second sequence to follow in the acquisition process. Select an escrow agent familiar with commercial property transactions, and one that understands your process sequence as a syndication expert. This will make your job as a syndicato and teir job as an escrow agent easier to accomplish.
It is important that your equity source whether private or institutional is kept informed once they agree to work with you to acquire a commercial property. The relationship you have with your equity source is critical. It is an important business relationship based on professional communication and follow through on your part. Do not jeopardize this relationship once it has begun.  Important legal and verbal communication is maintained throughout the acquisition sequence, so never make a promise you cannot keep or have no intention of keeping. In the commercial property business you are evaluated on your ability to close a transaction in the agreed amount of time. Time extensions are possible to negotiate if their is an understanding that dealing with delays is a two way street. Ask for wiggle room  from the beginning, then when delays occur on either side you can expect a reasonable give and take to work within specified timelines. But that is not all . . . look for our next article in this sequence on the due diligence process for detailed information you can use to track and maintain complete information from market analysis to closing.

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