Due Diligence - Seven Step Check List - Part One

How to use seven steps to make sure your Letter of Intent process is complete. What if you discovered a simple list that you can use to follow the progress of a completed Letter of Intent? Here is a seven step check list to follow:

Letter of Intent

1.    Reviewed and signed off by you

2.    Reviewed and signed off by legal

3.    DD can expire without obligation by buyer

4.    Deposit release requires affirmative written action

5.    Sufficient time for due diligence

6.    Sufficient Time for Financing

7.    Deposit goes hard on:

Step 1: Reviewed and signed off by you: You can easily use this reminder that you have reviewed the letter of intent and approved it. Just sign or check this step and make note of the date. Here is legal reminder to follow.

Step 2. Reviewed and signed off by legal: Use this reminder that you have reviewed the letter of intent and approved it once it returns from your lawyer. Just sign or check this step and make note of the date. Here is the DD time line reminder, next.

Step 3. DD can expire without obligation by buyer: You can easily use this reminder that your due diligence timeline ends without financial consequences to you as the buyer.

Step 4. Deposit release requires affirmative written action: Reminder that your hard money deposit will only be returned by written agreement. Make sure your letter of intent has this clause to protect you if you decide to walk away from the deal. Check this and make sure your lawyer includes this clause.

Step 5:Sufficient time for due diligence: Check the amount of time you asked to complete due diligence. Then check again, allow a sufficient number of days with a built in extension if time lines are not met by the seller.

Step 6. Sufficient Time for Financing: In today's investment market,  financing takes longer, negotiate sufficient time, then ask for more than you need.

Step 7. Deposit Goes Hard On: When do you need deposit money on the table? Agree to a date and do not deviate.

You want to issue a letter of intent to get an investment tied up and you agree on the stated terms within the letter. The letter of intent is basically a statement that the seller is looking to sell and that you are looking to buy.  The letter allows for an inspection period and a financing period that is called due diligence . But that is not all .  .  .

Source by Richard Sorrentino