{"id":2102,"date":"2018-11-17T01:28:00","date_gmt":"2018-11-17T01:28:00","guid":{"rendered":"https:\/\/enrichedrealestate.com\/blog\/?p=2102"},"modified":"2018-11-17T01:28:00","modified_gmt":"2018-11-17T01:28:00","slug":"realestateacquisition","status":"publish","type":"post","link":"https:\/\/enrichedrealestate.com\/blog\/2018\/11\/17\/realestateacquisition\/","title":{"rendered":"The Most Difficult Aspects of Real Estate Acquisition"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Every day, thousands of real estate companies and private individuals with the help of estate agents are buying many different forms of real estate.\u00a0 But as common as real estate acquisition might be, there are lots of frustrating aspects that goes from the initial phases to closing the deal.<\/span><\/p>\n<p>.<\/p>\n<h3><strong>Deal Sourcing<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Deal sourcing continues to be a relationship-driven process that doesn\u2019t necessarily require any special method. However, networking and being active in the real estate industry tremendously helps in having a consistent deal flow.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, while it\u2019s rewarding for veterans, we found this a particularly difficult aspect for newcomers.<\/span><\/p>\n<ul>\n<li><b> Global market: <\/b><span style=\"font-weight: 400;\">The global marketplace is largely controlled by big brokers who often become the bridge between the company and the deals. They find a deal based on your profile and data and when they successfully find one, they\u2019d incentivize it with a market-rate fee.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">It does save you from the effort and time-consuming tasks of building relationships. But you won\u2019t be able to get the best out of the deal since you have to offer a piece of your pie.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That can be a sad news for newcomers. But there isn\u2019t any sign of times changing very soon. There are start-up companies trying to change the way of the system but there has been little traction.<\/span><\/p>\n<ul>\n<li><b>\u00a0Data-driven process: <\/b><span style=\"font-weight: 400;\">There are many groups that don\u2019t use data to come up with special and niche-oriented investment strategies. Instead, the industry focuses on finding mispriced opportunities in any market they might be familiar with.<\/span><\/li>\n<\/ul>\n<h3><\/h3>\n<h3><strong>Acquisition Process<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">The acquisition process might be the most challenging of all the phases. During this time, we are more prone to errors. There\u2019s also less clarity with various procedures such as debt sourcing which is very relationship-driven. The deal basically goes to the group that is most aggressive. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even PSA negotiations are rather unfair, especially with the opacity of \u201cmarket-rates.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But perhaps the most challenging procedure of all is property assessment. Almost every small step along the way is frustrating and there\u2019s the uncertainty of covering everything. Property assessment includes:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Due diligence<\/strong> &#8211; Due diligence requires reviewing every document from historical financials to property tax bills. Each document is often shared online but takes a lot of work to guarantee both sides were able to receive and read them.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong style=\"line-height: 17.6px;\">Third party and site visit<\/strong>\u00a0&#8211; Just one real estate acquisition company is not enough when it comes to assessing the property. There needs to be several for environmental assessment, property condition, appraisal, and more. Site visits also tend to be hectic especially when the property is fully occupied while being assessed.<\/span><\/li>\n<\/ul>\n<h3><\/h3>\n<h3><strong>Closing and Legalities<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Revisions are very common with the settlement statements. Wire cutoffs are also commonly missed, and signing every required paper can be tiring. There are also lots of rough patches during the closing phase and oftentimes, it can be expensive when you\u2019re working on finalizing the papers.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The industry can be chaotic and competitive, but it\u2019s also the place for opportunities. Understanding every process may not be enough to make things easier, but it does help. What you really need to focus on is knowing the nuances of the business and try going with the flow, instead of trying to change it.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every day, thousands of real estate companies and private individuals with the help of estate&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2914,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,11,14],"tags":[],"class_list":["post-2102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buy-sell","category-investors","category-real-estate"],"_links":{"self":[{"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/posts\/2102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/comments?post=2102"}],"version-history":[{"count":0,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/posts\/2102\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/media\/2914"}],"wp:attachment":[{"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/media?parent=2102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/categories?post=2102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enrichedrealestate.com\/blog\/wp-json\/wp\/v2\/tags?post=2102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}