Due Diligence Attack Plan Example

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II. Create a list of questions for our client; Before I began a Due Diligence attack plan, I want to know background information about our client, the Purchaser. Some questions would be: is Purchaser a larger company with a parent company or if this a one time commercial transaction, what is background of the Agreement, was this Agreement a long drawn out agreement or relatively easily agreed upon with the Seller, and what is the Purchaser’s tolerance for risk. Further, how did Purchaser find this property, why does Purchaser want this property and not another available property, what is the property to be used for after purchase. Since no facts state otherwise, I will assume this will remain a commercial transaction and Purchaser does …show more content…
First hand sight surveillance of the premise allows me to get a better picture of the applicable laws I will need to look into such as managing tenants, secured transactions, insurance needs, warranties, environmental laws and if there needs to be a disposal of items located in/on the premise.
A. Property In the Real Estate Purchase Agreement (“Agreement”), it says the real property consists of “land and building(s).” I would first like to know how many, if more than one, buildings are located on the permanent parcel property. Then I would like to know the size of the buildings, if there is more than one building. As previously stated, if the Seller has any clients tied to the piece of land. This would require background info into what FJR Properties conducts themselves as.
B. Purchase Price I would like to know where the $800,000 figure came from and what was used to determine this price, was this price agreed upon after numerous other prices were denied. Further, how should the purchase price be paid upon closing, whether this is a cash purchase or a mix of cash and credit to held in escrow, etc...

C. Sale
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Ideally Seller would hold most of these documents such as utility bills and maintenance agreements, so obtaining them wouldn’t require experts, rather time. The use of experts would not be required to look into any municipal or state violations, citations or orders noticed against the Property.

D. Financial and Tax Matters of the Property
Financial Statements I would like to see current rent collections, past income and expense statements and past operating statements. Ideally, this information would come from the Seller’s accountants. This may take at least a week for the accounting firm to prepare a report.
Tax matters Statements These include copies of all federal, state, and local, income and franchise tax returns filed by Property in recent years. Hopefully either Seller or Seller’s accountants would be able to provide these documents. If not, no experts would likely be needed because I look up this information. Looking up this information by myself would take at least a day, and trying to gain them from Seller or Seller’s accountant could take up to a week, if the documents are able to be located. Further, I would ask to see copies of real estate and assessment tax bills for recent

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