It is said that approximately one-third of due diligence investigations, particularly for larger commercial projects, uncover serious problems - potential deal breakers. Of those, approximately 50% fail to complete the transaction. It's crucial that, when conducting due diligence, that it is systematic and complete. We have to look at the fundamentals of the deal, exit strategies, cash-flow, location, not assuming appreciation, and analyze these to ensure success.
Our Antioch Tour last weekend addressed this due diligence process, and how to effectively navigate that. There are people conducting tours in the San Jose area right now, promoting sales and purchases that as investors we know do not make sense. (If you are a retail client that is another matter, favorable interest rates and first time buyer incentives make it very attractive). Investors are looking for specifics - the numbers generally tell the story. If you look at the statistics and data that has been presented at our monthly meetings -- we are so fortunate to be privy to this type of proprietary information with experts on the CA market share compelling, logical cases to hold off buying this year. Of course there are some discounted deals available, but for the general audience that hopes to buy for cash-flow and hold for appreciation now is not the time for the Santa Clara Valley. There are investors making deals right now and building wealth securely by following the due diligence process - it is a system and it works.
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