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benefits of due diligence for multifamily real estate investing

The Benefits of Due Diligence in Multifamily Real Estate Investing

Multifamily investors may finally have something to look forward to. For much of the past year, the multifamily investment market has been in flux. Following the post-pandemic boom in 2021-22, investment activity plummeted, with sales volume dropping 74% at the end of Q1 2023 compared to the same period in 2022, according to the Wall Street Journal

However, the new year is offering signs of hope for the multifamily real estate market. Market experts anticipate increased transaction volume thanks to stabilizing interest rates, among other factors, according to a recent article from GlobeSt.

What does this mean for you? If you’re looking at investing in multifamily real estate, one of your first priorities will be conducting your due diligence. If you’re unfamiliar with due diligence, we’ve broken it down for you below, along with reviewing some of the key benefits of Leonardo247’s Due Diligence platform.

What is Due Diligence in Multifamily Real Estate?

Before purchasing a multifamily property, you need to do your homework. In the multifamily industry, this is referred to as due diligence. It is the process of an investor verifying the information given by a seller in regards to the asset being purchased. It typically involves a financial inspection, rent-roll analysis, unit inspections, and a lease file audit among other factors.

Avoid Due Diligence Disasters

Anyone who has been through the process of acquiring a new property knows it can be a harried affair. You’re trying to collect as much information about a property in a short amount of time.

You have to perform unit inspections, which requires giving the residents proper notice. If something goes wrong and you want to get back into a unit to complete a further inspection, the seller does not have to give you the opportunity.

After you’ve collected the information, you need to organize it in a way that is easy to understand. Traditional methods, such as entering everything into an Excel spreadsheet, is not the most efficient use of your time, and can be fraught with errors.

Benefits of Due Diligence for Multifamily Real Estate Investors

Proper due diligence execution is critical. Here are the benefits of the Leonardo247 Due Diligence platform.

Rent-roll auto recognition – Capable of identifying various rent roll formats from popular property management systems, the system processes data upon upload to create standardized reports. This ensures detailed insights into rent by unit, occupant, and unit size, among other relevant factors.

Efficient Inspections – Expedite unit inspections and property walks on the go. The straightforward form setup, along with pre-populated defaults, reduces the data entry burden. Additionally, the app allows for easy capture of inspection photos and annotations, saving both time and effort.

Lease file audits & analysis – Conduct speedy comparisons between paper lease file data and electronic records. Generate instant exception reports and extract crucial demographic and financial insights. The system also enables swift correction and re-upload of report data for meticulous and accurate final reports.

Comprehensive metrics dashboard – Keep tabs on inspection progress from anywhere, thanks to completion metrics detailing units, tasks, and inspector velocity. This feature allows for agile resource allocation where needed most.

Intuitive and self-serve experience – Whether using the mobile app or web app, the user-friendly interface ensures a seamless experience with the system.

Ever feel like your due diligence processes are a complicated mess? Leonardo247 Due Diligence helps you get the deal done faster and more accurately than ever before. Request a demo today.

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