The Kay Properties Due Diligence Process 101

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The Kay Properties & Investments Team of Due Diligence Experts

The Kay Properties team takes due diligence very seriously. We encourage you to take some time to enjoy this video, which provides investors with a closer look into our proprietary due diligence process.

For nearly 20 years, Kay Properties has helped more than 4,000 1031 exchange investors nationwide successfully complete over 10,000 DST and 721 UPREIT transactions. Our online marketplace at www.kpi1031.com showcases 20–40 DST and 721 offerings from over 25 nationally recognized real estate sponsor firms—spanning multiple loan-to-value options, geographic markets, and asset classes.

Key Areas of Due Diligence Covered in the Video

  • Appraisal & Valuation – Reviewing sales comps, submarket data, and acquisition price vs. appraised value
  • Environmental Reports – Phase I and Phase II assessments for recognized environmental conditions
  • Property Condition Report – Identifying immediate and long-term repairs and comparing them to reserves
  • Loan Document Analysis – Cash trap provisions, prepayment penalties, interest-only vs. amortizing loans, and default triggers
  • Sponsor Assumptions – Rental growth, vacancy rates, expense projections, and fee structures
  • Third-Party Market Data – CoStar and Placer AI reports on rent comps, absorption, and visitor traffic
  • Replacement Reserves – Ensuring adequate reserves for future capital needs (critical since DSTs cannot accept new capital)
  • 721 UPREIT Review – SEC filings, debt structure, dividend sustainability, and adjustable-rate mortgage risks