In every real estate deal, it is important to practice due diligence. By doing so, you are practicing prudence and at the same time ensuring that your investors can trust you with their hard-earned money. So, what are the things you should know about due diligence in real estate syndication? In this Highlights episode, we look back at our conversations with Dax Ferguson of Heritage Construction & Consulting Services and Matt Faircloth of DeRosa Group.
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Dax talks about his professional process of due diligence inspection, the convenience the service provides, and what you should be considering when doing it yourself or hiring in a team. Matt, meanwhile, speaks about the crucial role of doing due diligence, what its purpose is, and when revaluation or re-trading might be appropriate. Click the play button now and learn more about due diligence!
Key Points From This Episode:
- The due diligence process and how Dax’s company helps out in this regard.
- The layout and format of the reports that his company creates for customers.
- Things to look out for and photograph when doing your own walkthrough.
- Matt shares what to consider when looking to hire a due diligence team.
- Why is due diligence necessary and how it changes as you get into larger multifamily units?
- When might it be advisable to reevaluate or re-trade the property?
- The games that some buyers play in the due diligence process and why it’s a bad idea.
- A checklist for the process that Matt uses and the documentation they ask for.
“We’re very knowledgeable, but we’re not experts on every aspect of this deal.” — Dan Ferguson
“If there’s some damage that we found thru due diligence, we recommend a company to give an assessment on it.” — Dan Ferguson
“The younger guys really know how technology works.” — Dan Ferguson
“My interpretation of what we do in due diligence is to validate — to validate the things are what I thought they were.” — Matt Faircloth
“The purpose of due diligence is really to take the whole picture of the property. The purpose of due diligence is really not to re-trade, it’s not really to get a better deal. Some people view it that way.” — Matt Faircloth
Links Mentioned in Today’s Episode:
About Dax Ferguson
Dax Ferguson is the owner of Heritage Construction & Consulting Services, a full-service construction, remodel, and restoration contractor. Dax is the father of 9 boys, with over 20 years of experience in the construction business. What Dax likes best about his job isn’t solitude; it’s solidarity. He loves meeting with clients, especially working alongside those in need of restoration after a disaster. Along with that, Dax has also been active in Multifamily real estate since 2008.
About Matt Faircloth
Matt, originally from Baltimore, Maryland, graduated from Virginia Tech with a degree in Engineering. After playing Robert Kiyosaki’s Cash Flow Game, Matt decided to quit his safe and secure job working as an engineer in a Fortune 500 company to become a full-time real estate investor.
Under Matt’s leadership, DeRosa has completed over 30 million in real estate transactions involving private capital including fix and flips, single-family home rentals, mixed-use buildings, apartment buildings, office buildings, and tax lien investments. Matt has extensive expertise in connecting passive investors to lucrative investment opportunities through syndications, private loans, and joint ventures.
Matt Faircloth is an active contributor to BiggerPockets.com through Facebook Live, teaching webinars, and blogging.
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