Question

In: Operations Management

Why would a developer do a phase one environmental study in the due diligence phase before...

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?

Solutions

Expert Solution

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


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