Back Icon Back to Blog

What is Due Diligence when it comes to Real Estate Investing?

 

The due diligence period in a real estate means embarking on the necessary steps to perform calculations, review documents, research the company and essentially do your homework for the investment BEFORE you actually make the commitment.

As you are working through your Due diligence process remember that there are many facets that need to be taken into consideration. The economics of the market, looking at the track record of the investment operator, understanding the Investment agreements and your level of commitment are all considerations to explore.

Knowing the economics means understanding the long-term viability of the real estate market and what the overall climate is in the way of job growth, industry and livability of the area of the investment.

It is also up to you to vet the investment firm, read the fine print and look at the historical data and seek information about them from other investors. Having a thorough knowledge of the investment documents is a key element of the process.

Another, not to be forgotten piece of the Due Diligence puzzle is assessing your own personal financial goals and investment strategy. Understanding your personal tax implications, your potential risk quotient and if you want an active or more passive investment opportunity are all questions that need to be answered prior to embarking on your real estate investment journey.

Although it may seem like a daunting task, know that on the other side of that Due Diligence is the opportunity for a positive investment that will help you move toward financial freedom.

TJ Lokboj

TJ Lokboj is an entrepreneur with a passion for adding value to the real estate investing industry through adopting digital transformation. Some of TJs companies have been featured in Yahoo Finance, Morningstar, Benzinga, and many other publications.

TJ is the managing partner of Holdfolio, a real estate investment firm that leverages a premier crowdfunding platform.

He is also a member of the Forbes real estate council and co-founded SyndicationPro, which is the #1 syndication management SaaS solution in the market today.

Follow TJ on:

Ready to invest in real estate?

We make real estate investing simpler, more transparent, and accessible to individual investors.

Reserve at LaVista Walk

Property Location Atlanta, Georgia

Units 289
Cash on Cash Return 9.8%
Target IRR 17.7%

Nob Hill Apartments

Property Location Houston, Texas

Units 1326
Cash on Cash Return 12.8%
Target IRR 19.3%

Longleaf Pines Apartments

Property Location Mobile, Alabama

Units 199
Cash on Cash Return 6.4%
Target IRR 24.3%