ATC Designers Due Diligence Process

ATC Designers performs a comprehensive due diligence so that you know exactly what you are buying. We ensure that all facts and numbers are uncovered and you get a good idea of what your property entails. Whether residential or commercial, we carry out physical inspections, review titles and documents, make environmental assessments, study zoning requirements and more to leave no stones unturned.

Our due diligence process depends begins by understanding your purchasing objectives. Your investment goals for acquiring the property will create the foundation for our due diligence. For example, if you want to purchase a rental apartment, then we will verify the existing tenant leases and rental payment history to determine the feasibility of your investment.

On the other hand, if you are going for a commercial property for business, then we will verify if its suitable for the intended use.

The due diligence process varies from project to project, but there are some common aspects and items that are assessed. Here’s a brief look at some of the items we evaluate and the process we adopt.

Title Review

A title review is a must to determine your rights and what you are purchasing, and to find out the rights of others. The title refers to the transferrable rights of the seller and it is necessary to check whether he has the required rights. The title review also uncovers any claims against the property through a title search.

The title review provides important information such as past and current ownership, and existence of claims, liens, easements and encumbrances. After we have verified the factors, we conduct a professional survey of your property to ensure everything is in order. We will confirm all property modifications and improvements, lot size, soil condition, access ways, rights of ways, boundary lines and more.

We can also contract with a title insurance company so that you can save yourself from unexpected financial losses as a result of title discrepancies.

Property Codes and Zoning

We will verify if the property you plan to purchase meets the current zoning regulations. We can arrange zoning certificates from the local planning office to ensure the current and anticipated use of the property is in compliance with land use classifications and zoning requirement.

For new buildings, we analyze the certificate of occupancy to find out if the property complies with applicable codes. We also verify tax certificates to assess the accurate valuation of the property to help you negotiate the deal. The verification also uncovers any pending tax payments you need to attend to.

Our zoning experts will help you determine if the property is compliant to codes and zoning so that you can take an informed decision. We also make you aware of zoning implications in case you plan further development, alteration or expansion. Our team will keep you abreast of the zoning requirements and relay any changes that might impact your property for the time you want to hold it.

Environmental Assessments

The environmental condition of a property is an important consideration whether you are purchasing a residential or commercial property. According to federal laws, you can be held liable for any environmental concern related to your property even if you didn’t create the problem. You may also face difficulties getting loans for commercial or residential properties with environmental problems. So it’s always prudent to carry out environmental assessments before you make the final payment.

Commercial properties need to perform a Phase I environmental site assessment (ESA) for identifying existing environmental issues. We are licensed to carry out ESA and provide a detailed report which-

• Identifies any environmental concern at the property
• Determines the severity of each problem
• Provides financial implications of the problems
• Outlines the necessity for cleanup or reclamation

If the Phase I ESA discovers environmental problems, we will follow it up with a Phase II ESA which presents the means of remedial actions and the cost. The ESA is mandatory according to federal laws and forms a part of the normal commercial property purchase transaction.

Residential properties don’t need Phase I and Phase II assessments, but it’s wise to do a pre-purchase environmental assessment to make sure you can use your property to the fullest.

Property Appraisals

Real estate appraisals play a crucial role in determining the value of a property and form an important part of the purchasing process. The appraisal determines the selling price and also decides the amount of loan you can get on your property.

We assess the physical building or plant, geo-demographic information, zoning regulations and comps to appraise your property. Our appraisal will help you determine whether the one done by the seller is appropriate so that you can negotiate effectively.

For residential properties, we adopt different appraisal approach to determine the value such as sales comparison approach, cost approach or income approach.

Income and Expense Analysis

You need to have an idea about the income and expenses of your property to ensure profitability. Our due diligence process helps you maintain the income that the property has generated historically.

We evaluate the operating statement to assess the verifiable costs and determine the monthly expenses that the building incurs. You can also get an idea about the major capital expenditures such as floor or roof replacements that you may need to carry out in the future. Our analysis ensures that the listed income can be collected by you and all costs are inclusive and accurate.

We will help you recreate the operating statement accurately so that you can corroborate it with the buyer’s statement for maximum transparency.