Due diligence? You hear the term, but what does it really mean? Here’s a simple definition: “Investigation and verification of the details of a particular investment.” In real estate investment, you can start this process before you make an offer, but you also normally have clauses in the offer that allow you to have inspections done, and reviews of the books and certain documents.

Due Diligence – What To Look For

You’ll need to look at the files, to verify income. You will be looking for rental agreements that are signed by the tenants, as well as rental histories that show if there are any problem tenants or late payments. Review rental deposit documents as well, to see amounts and where the deposits are kept.

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