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Most Legacy clients are seasoned investors in a variety of asset classes, including but not limited to commercial real estate. However, some come to us after years in the residential or multifamily real estate sector, ready for a change. While residential and commercial markets have some similarities, the commercial sector’s acquisition process is much more dynamic and often unpredictable. 

At Legacy, our clients typically follow this six-step process for the acquisition of new properties or businesses: 

Step 1. Clarify your investment strategy

This is a conversation you should have with your financial advisor as well as the syndicate or other investors you’ll be working with. By narrowing down your investment strategy, ideal price point, and long-term goals, you can find suitable properties that work in favor of these objectives. 

Step 2. Preliminary Due Diligence and Underwriting

Both you and your financial institution will conduct thorough due diligence to ensure the property in question meets your financial goals. The due diligence process will include extensive market analysis, property history, a review of financial projections, and more. 

Step 3. Making Your Offer

Once you’ve determined the right property for both your goals and market conditions, you can make the first offer for the property by submitting a Letter of Intent (LOI). This includes the preliminary proposal and intent to purchase the proper with verified funds and will position you against other potential buyers when negotiations begin. 

Step 4. Formal Due Diligence

Just as you perform a home inspection before purchasing residential real estate, you should formally inspect your commercial investments with a fine-toothed comb. After you’ve provided a letter of intent and have vetted the property for market viability, you can take a closer look to better understand the property and find potential pitfalls that can better shape your offer. You should survey for zoning compliance, physical wear and tear, and operational issues that may not have come up in the preliminary due diligence stage. 

Step 5. Pre-Closing

Once other buyers drop out, you’ll be formally interviewed along with the remaining buying candidates in order to reach final negotiations. You’ll submit your best and final offer on the property during this time. If chosen, you’ll receive a purchase and sales agreement (PSA), which provides all the information about the deal before closing.

Step 6. Closing

Once the PSA is accepted, you’ll go through the formal closing process with your financial and legal team. Now, you officially own the property and can begin working with your asset management team and tenants to produce cash flow for your new investment property. 

Legacy is there with you every step of the way in the acquisition process. Our team of experienced investors, asset managers, and advisors can help you choose suitable properties for your goals and ensure the acquisition process is as stress-free as possible. To learn more about current sales and leasing opportunities, contact us today.