Commercial Real Estate FAQ With The Beach Company On Multifamily Investments And CRE Investing

What Is The Number One Thing That You Look For In Due Diligence On A Property To Determine If It Is Worth Your Time?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.

What is the number one dealbreaker for one company might be completely different for another. However, an important due diligence to look out for is to make sure you’ll get your equity back. A property with a low likelihood of returning your equity is likely a property that is worth passing over. 

Richard Wilson: What is the number one thing that you look for in due diligence on a property that determines if it’s worth your time? 

Darby Parker: Well, thank you Richard. I don’t think we believe there’s really one thing as much as there’s one overriding question guiding us from the start. And that’s generally what’s the likelihood we’re going to get our equity back? Being sure the downside is adequately covered is pretty much the best way to know if a property is worth pursuing. There’s more, you know, than a dozen variables that could affect this and it’s always a bit situational, and that’s by design as we want to be able to pursue throughout a nice spectrum of the multifamily apartment stock. But we generally have 4, 5 easily identifiable quote unquote dealbreakers that we can usually spot within a few minutes of being on site, chatting with the deal rep, glancing at an OM, and the like. And I’ll add it’s worth noting that our dealbreakers might not be something that a competitor would have as one of theirs, and that’s vice versa. But our generally lend to our strengths and to the broader term investment horizon that our company embraces. 

Richard: Right, okay. Great. 

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Richard Wilson

Richard Wilson

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