Due diligence is the process of double checking everything before finalizing a purchase. Proper due diligence is an absolutely crucial part of every profitable investor's success. In this article, we will talk about the best ways to do your due diligence for Hawaii Kai Hawaii real estate.
Due diligence should start with the proper verification of the books. You should check all the rental agreements and double check all rental histories. Review at least the last two year's financial statements and see if there's anything unusual that raises a red flag. Also double check the file for repair receipts and work orders, etc.
Double check the actual rental income with the amount of rental income the building should be receiving based on the lease agreements. These numbers will often not match up. As the building's future owner, you should know why.
Check all the utility bills. Make sure there are receipts for every payment. If there isn't one, contact the city or the utility company to get a copy of the receipt.
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