As you plan to expand your real estate portfolio, it can be difficult to know where to begin. One of the most important steps to buying new real estate is to thoroughly prepare. A great way to do that is to create a pre-acquisition plan.
What is a pre-acquisition plan?
A pre-acquisition plan is essentially what it sounds like: a plan that you as a buyer make for property that you are going to acquire. This is often a written document that includes a timeframe for different parts of the buying process. It may include:
- Background of the acquisition
- Goals for the purchase
- Conditions like any updates that will need to be made to the property
- Initial cost and other potential expenses
- How the acquisition fills a need or applies to the business
- Potential losses and risks
- Budgeting
- Priorities
- Plan of action
While there are many other considerations that can be included in your pre-acquisition plan, these are a few that will provide a solid beginning.
What are the benefits?
Though creating a pre-acquisition plan is time-consuming, it comes with many benefits. It’s safe to say that this type of deep dive into a potential acquisition is always a good idea.
It can help you spot hidden issues and ensure important details that could otherwise create big problems in the future. You can get a good look at and plan your acquisition’s financing, contracts and site preparation. A pre-acquisition plan gives you a platform to thoroughly weigh the risks and benefits of the transaction.