We just got a new project under contract, a multi-family project, and as part of kind of documenting the process here on what happens on a multi-family acquisition, I just want to explain a little bit about what happens day one here. We’ve engaged our property management company. This is much earlier on for due diligence and some things to walk through the property, but now that we’re actually under contract, a couple of teams come into play.
First is the attorney. The attorney’s going to draw up the private placement memorandum that we use to raise funds. They’re also going to take care of two LLCs, two entities that we’re going to form for this new project. They’re also going to handle any kind of title objections or things that come up with the contract that you want to have an attorney on our team for. We went ahead and paid the retainer for that, and we have that attorney on board now. Fortunately, with this specific attorney, we’re paying the retainer, and then we’re paying the balance of the roughly $15,000 of legal costs at closing out of the closing costs, so that helps out a little bit on a sponsor’s pocket not to have to pay all of that out of pocket up front.
Second is the due diligence. We’re going to inspect every single unit of the property. We’re going to scope the plumbing lines. We’re going to have a complete property assessment, physical condition inspection, so we’ve engaged that company, and they’re going to go out next week to do a complete physical inspection.
Now we’ve also engaged the property management company. They’re going to do a complete lease audit and financial inspection, so we’re going to inspect bank records, make sure those match up, make sure that people are living where the leases say they are. A complete and full lease audit is part of our due diligence.
Typically, or in this case, we’ve got a 30-day due diligence period to do all of our homework, and so we’ve got our property management company engaged, we’ve got our attorney engaged, and we’ve got the inspection company engaged. Plenty of other things happening behind the scenes, but those are the big three that are helping us to get this project kicked off and get our numbers and everything wrangled in as quickly as possible after we go under contract.