What investors are looking for during due diligence. – JEFFREY VANDERVORST

When a renovation project seam- lessly falls into place, it’s easy to think random chance and good luck are to thank; when in fact, there is an intricate balance of plan- ning and methodology. Investors never rely on chance when purchasing a property, neither should a good renovation project. Just as the foundation is the most impor- tant structure of any building, so too is the due diligence process prior to acquisition. The entire project should be structured by the: Scope, Schedule and Budget (The Triple Constraint) formulated by the fi in the due diligence period.

The due diligence is the one opportunity to observe everything that will impact your business plan. The fi t step in a due diligence is to per- form a project feasibility assessment. Here at CAPgro we assess all deferred maintenance and life safety costs as quick as possible to then allow our client to determine if this is a property they want to add to their portfolio. Using a detailed due diligence process, we walk the property and document its condition among the 15 major categories such as: amen- ities, site improvements, interiors, exteriors, code compliance, landscaping, etc.

During this stage, we bring in the contractors, engineers, designers, and others necessary to give you a precise analysis. It will matter in the end. By adhering to an intricate planning and method- ical due diligence process, you will be able to produce the three most important deliverables that will guide the project: Scope, Schedule, and Budget. Our due diligence is aimed to de- liver these fi dings within 7-10 business days and within a 5-percent accuracy goal of the fi result at the completion of the project.

A proper due diligence equips our clients with accurate numbers to secure equity part- ners and lenders and strengthens their posi- tion at the off table. Once the client owns the property, we fi tune the plan one last time and then we execute. A thorough due diligence performed up- front provides the necessary guidelines for all parties involved. Utilize the due diligence pro- cess as a time to observe in detail what others usually miss. Done correctly, you will notice a streamlined process that can be applied to any size portfolio. Beyond due diligence, CAPgro provides project accounting and project management throughout the entire project to ensure a suc- cessful renovation.

The critical components of the acquisition, also referred to as the ‘Triple Constraint’, are the scope, budget, and schedule.