Due diligence

Davie Kaplan has developed due diligence procedures specifically designed to address the problems often associated with equity financed residential and commercial developments. Regardless of the extensive efforts put forth by a financial partner and developer in drafting a definitive operating agreement, there are almost always disagreements as to what costs are considered to be allowable project costs.

The procedures offered by Davie Kaplan focus on the project costs that are often the most ambiguous. Our procedures can be modified to accommodate specific project concerns, however, they generally include the following:

• Verification that all developer allocated costs such as insurance and payroll, have been allocated consistent with the operating agreement
• Determination that costs are properly categorized
• Review of project trial balance for unusual balances or transactions
• Recalculation preferred returns
• Review of Estimate To Complete
• Review of all related party transactions

At the conclusion of our Agreed-Upon Procedure engagement, we provide a report which includes a description of our procedures and related findings, a budget to actual analysis, a summary of adjustments as a result of the procedures, and a final accounting of the project which includes how the final proceeds are to be distributed.

For more information, contact David C. Pitcher