In: Operations Management
Why would a developer do a phase one environmental study in the due diligence phase before closing on a property?
From the checklist for buying land, why is it important to do a title search?
What is meant by the term "developer's equity" and why is it important to construction lenders?
When considering a development construction loan, would you be better off contacting a commercial bank or a life insurance company and why?
Answer=A number of federal and state laws are formulated that impose significant restrictions on the private parties and the government organizations and operators of the properties to prevent any type of environmental contamination. There are serious consequences of the environmental issues on the business and financial issues. Thus it is important to conduct the Phase I Environmental Site Assessment, to find out the current and historical property use while performing commercial real estate buying.
Answer= It is important to perform the title search as it will
ensure that the title of the property is not in dispute and at the
same time the company or the agent selling the property has the
right and title to sell the property
Answer= Developer’s equity can be defined as the amount of the
developer’s fee that hs to be paid by the lessor in the every
constriction budget that is equal to 5% of the total cost of the
property for a certain property
Answer = it is better to go for the commercial banks as they have
greater expertise in dealing with the property loans and they have
better and well-drafted loan granting processes. The commercial
banks are more reliable as they have been working in this from a
very long time