When it comes to making investment decisions, conducting proper due diligence is crucial. However, time constraints and the “buyer beware” principle in real estate can make it challenging for investors, especially in cases of a 1031 exchange. That’s where we come in.
At Cornerstone, we prioritize your best interests and act as your representatives. We take on the responsibility of conducting thorough due diligence on your behalf, ensuring that our offerings have undergone rigorous examination and independent testing at every stage of your investment journey.
Our exceptional offering due diligence and structural analysis have earned us a sterling reputation among industry sponsors. We work closely with the due diligence department of our broker-dealer to delve deep into the underwriting of every approved offering. This meticulous process ensures that our offering listing may not be the largest, but it is the most comprehensive.
There are several reasons why we may decline certain offerings and not have some offerings that others may provide. We carefully consider concerns about the sponsor’s previous performance or management background disclosures. We scrutinize financial projections that rely on financial engineering or aggressive assumptions that could harm future cash flows. We assess offering load and expenses to ensure they add value reasonably. We also identify hidden initial or deferred taxable 1031 exchange boot and analyze loan provisions that may be detrimental.
It is important to be cautious of a concerning trend where some sponsors directly sell their offerings to the public. This practice exempts the offering from independent examination, which can be alarming. Without an extensive and diagnostic due diligence process, crucial aspects of the property may go unchecked. Over the hold period, the property may face economic and environmental challenges that could impact its performance and your investment.
We understand the importance of a property performing well, generating consistent and reliable monthly cash flow, and ultimately achieving a profitable exit sale. That’s why we go above and beyond to ensure that our offerings are thoroughly vetted and meet our stringent criteria.
With Cornerstone, you can have peace of mind knowing that your investments have undergone comprehensive due diligence and are backed by our commitment to your financial prosperity.