What is the due diligence process?
So the due diligence process is the time between when you get a property under contract and your earnest money goes hard.
Generally, it can last anywhere from a week to thirty days, depending upon the size of the actual asset. It allows you time to inspect the asset and make sure you’re making an informed buy, before actually having any money go hard.
Why is the due diligence process an important part of your real estate investment?
The due diligence process is a very important part of the real estate investing process. It allows you to get a property under contract without fear of losing the property while you do your research and make an informed decision on the purchase of that project. Without the due diligence process, and with the amount of capital that’s involved in real estate investing, it would be a high-risk situation.
What are some tips for making the due diligence process go more smoothly?
The three main tips that I always tell my real estate investor is first and foremost, know your market. Second is how your own personal capabilities. And third, know your timeline. Time kills all deals.
Know Your Market
So know your market- what do I mean? Understand what sells in your market. Understand what they buyers inside that market are looking for. The last thing you want to do is to overbuild a project that you can’t sell or get the money that you spent back out of it.
Know Your Capabilities
Know your capabilities. Understand what you’re getting into and what you’re capable of. If this is your first flip, look for something that’s an easy cosmetic. Paint, new carpet, new flooring, new appliances. Don’t go into your first flip trying to move walls or add square footage. Understand your capabilities.
Know Your Timeline
Know your timeline. At the end of the day, time kills all deals. And understand what it takes to do the type of scope of work that you’re trying to accomplish with your fix and flip. At the end of the day, you want to make sure it’s done in a timely manner so that you can get it back on the market and sold quickly. Thus, not having the carry costs month after month.
Thanks for taking the time to watch our latest video blog, and please be on the lookout for future blogs coming to you soon from Bay Mountain Capital. If there is an area you’d like us to discuss in one of our next blogs, please feel free to reach out and let us know.
About Bay Mountain Capital:
Bay Mountain Capital has been in business for more than a decade, closing approximately 2,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and value-added approach, we strive to incorporate these principles into our underwriting and closing processes.
As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it.
We are primarily an asset-based lender, which means that qualification requirements are limited. Our rates and fees are among the lowest in the industry.