Innersoul Realty Inc Real Estate Business Tips and Development Education
In addition to an acceptable package detailing the projected use of the property, associated costs, and future cash flow projections the following issues need to be addressed in depth as well:
A. PROPERTY / TITLE
Maps, locations, and overview items
Current ownership and control
Current title holder
Property title documents / last search
List of encumbrances, liens
Restrictions, easements, covenants, etc. running with the land
Leases, contracts, ordinances etc. associated with the property
B. LAND USE ISSUES
Municipality and other governmental entity with jurisdiction over the property
Current zoning and necessary changes to existing zoning
Construction permits and filing procedure
Identify necessary agency permits
Current permitting turnaround timing
Current Official / Master Plan designation and status
Local infrastructure studies exhibiting sufficiency for project
Failed / successful / ongoing projects in the area
C. ENVIRONMENTAL ISSUES
Former uses of property
Past environmental issues and fixes
Past environmental investigations
Additional environmental studies required
Contiguous property environmental issues or concerns
D. TAX / LEGAL
Any and all ongoing / pending actions or events
How the property has been taxed in the past
Referendums / actions to raise taxes
Is owner / seller an individual, partnership, trust, corporation, limited liability company, etc.
Does seller have authority to convey property and title
Actions or events involving current / past owners
Settled legal actions or tax events
Christiansen (1996) suggest the following to be included in any feasibility study: – Site description – Market research – Financial Feasibility Analysis – Planning Layouts – Risk Assessment
Understand that development of raw land into lots suitable for construction is a complex process. Therefore a proper due diligence requires detailed input from experts. “Forecasting is an imprecise art at best and projected cash flows if not carefully prepared can result in totally misleading forecast.” (Sorensen, 1990)
