WANTED: Due Diligence Check List - Posted by Jon

Posted by Ronald * Starr(in No CA) on July 17, 2002 at 22:18:04:

Jon-------------

If you purchase through a title company, escrow company, or a real estate attorney you should not have to worry about these types of things. Since you mention Mello-Roos, I assume you are in CA. Then the title or escrow company should be able to tell you whether there is a Mello-Roos type bond on a property. You can also call the county treasurer’s office and, giving them the assessor’s parcel number for the property, they will tell you about any bonds on the property. If you go to the assessor’s office or the tax collector’s office, there will be a list of all assessments for a particular property which are collected by the county tax collector. You can find this by determining what the “Tax Rate Area” number is for that property–it is usually readily available, but ignored by most of us most of the time. Then there will be a book which shows all the different taxing entities and their assessmerts for properties within the tax rate area. You’ll see things like school districts, community college districts, mosquito abatement districts, ambulance districts, and so on. Whatever taxes are being collected for the property.

As far as the rest of the liens, judgments, and other obligations, you can see what is against the property owners in the recorders office records. But, you usually should not have to worry about that. The escrow holder will handle them. If you buy without an escrow, you will probably want to learn how to read the records for yourself. I few hours of learnoing should do the trick for you to be able to handle most of the situations you will run into. You might practice by running your name and those of some people you know well.

Good InvestingRon Starr*******

WANTED: Due Diligence Check List - Posted by Jon

Posted by Jon on July 17, 2002 at 11:07:55:

How do I know if I’ve completed my due diligence on a property? Is there a check list that any one here uses? I’m not only concerned with the shape that a property is in, but more importantly, what liens and other outstanding bills are on it. In other words from the Recorders and Assessors offices to checking the sinks and smoke alarms. Checklist anyone?

Also, when inspecting a Tax Lien property that I cannot physically enter, what should look for?

Thanks

Commercial Check List is Under Your Nose! - Posted by Terry Vaughan

Posted by Terry Vaughan on July 17, 2002 at 15:11:52:

Try this link for bigger deals:

Re: WANTED: Due Diligence Check List - Posted by Jon

Posted by Jon on July 17, 2002 at 13:18:40:

Ronald,
Thanks for the reply. I’m really concerned about monetary problems left on the house. Such as liens, mello-roos and what else? How can I assure myself that I’ve covered all bases on this aspect of due diligence?

Re: WANTED: Due Diligence Check List - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 17, 2002 at 12:43:28:

Jon-----------

I don’t have checklist. I know that John T. Reed has a book on buying office buildings and another, I think, on buying apartment buildings. One of them has a very extensive checklist. Try his website at johntreed.com .

I buy properties at tax sales. I look and see as much as I can. Is it new/old electricity service? If it is not a breaker box, it could cost $500-900 to switch over. Are the electric lines hooked up? If not, there may be hassles and expense of having them hooked up. Are manholes in the street for a sewer system? House might not be hooked up, but it may be too. Is there a gas meter? Is there even gas hookup?

How is the roof? Will it need replacement soon. Does it look bad enough that there probably has been leaking into the house? Does the roofline sag, suggesting inadequate rafters? How is the siding? Any work needed to fix or replace windows. If it is vacant, are there floors? Don’t laugh, some don’t have them. What can you see inside that gives you an idea of what work will be required to fix it up?

How many truckloads of trash are in the yard which will have to be removed? How many truckloads inside the house?

Can you see the foundation? Does it have cement or is it just resting on the dirt? What condition does the foundation seem to be in? What about the steps and porch(es)? Condition? Repair needed?

Typically the condition on the outside of the house gives you some notion of the condition on the inside.

If you can see inside through the windows or holes in the walls, take a peek.

Good InvestingRon Starr******