Essential Due Diligence for RE Developers & Builders
Acquiring real property assets and parcels requires careful analysis and due diligence to ensure a sound investment. Due Diligence is an important aspect to acquiring the highest potential opportunities. Unfortunately, many real estate developers and builders don’t spend enough time and effort on properly completing this important step. Let Parker Associates define your opportunities.
Due diligence is a legal term for actions taken by real estate developers and builders prior to land purchase to avoid liability. It generally includes market scale and growth, consumer characteristics, competitor characteristics, and development constraints (physical, legal, and political). These elements serve as a basis for revenue projection followed by a financial pro forma (plan of annual revenues and expenses). Completion of all the analysis steps will provide you with every requirement for a due diligence report if requested by an investor or lender.
According to planner David Jensen:
“A thorough understanding of regulatory, contextual and market forces which impact a particular site is vital to successful development . . . Purchasing raw land without doing adequate research can doom the project before it starts.”
Builders requiring only a few lots at a single location may assume the land developer to be responsible for such due diligence, an assumption often leading to unnecessary problems. Make no assumptions about necessary research on your site selection decisions, regardless of scale. Make sure it is completed to your satisfaction according to the evaluation guidelines set forth by the Parker Associates team. Let us know how we can assist you.
David WB Parker is a principal of Parker Associates of Jacksonville, Florida, marketing consultants to the real estate industry; President of PTC Computer Solutions, IT Specialist, and an active real estate sales professional with PARFAM REALTY based in Jacksonville, FL. He can be reached at 904-607-8763 or via email firstname.lastname@example.org.
Parker Associates works extensively on understanding your market, your consumer, and your goals. We don’t just make it up, we research it ad infinitum to make sure we get it right. We are your advocate by being the advocate of the consumer.
Spend time looking at what you are trying to acquire, develop, or sell to learn how you can improve the success of what you are offering. Parker Associates helps understand the consumer by answering WHO will buy, WHAT they will buy, and HOW they will buy it. When the research is completed and the analysis is done, having the answers to these questions will reveal what will provide the best success for your project. Keep asking WHO, WHAT, and HOW and keep developing to fit the need.
If all of this is difficult to understand, that’s what we’re here for. Parker Associates has a team of experts on all of this stuff and we’re here to help. It’s what we do.
David WB Parker
Providing marketing and sales consulting services to both public and private real estate and resort developers, home builders, investors and more
Real Estate Development Marketing Consultants since 1982