“Debt” versus “Equity” Style Property Condition Assessments

A property condition assessment can be tailored in scope of work to either an investor-buyer or investor-lender report format. The investor-buyer format, also known as “Equity” style, is thought of to be focused on protecting the buyer’s financial interests. Alternatively, your investor-lender format, known at the “Debt” style report, will typically be written to protect the lender’s financial interests. In either scenario, a good case can be made which assumes protecting the lender’s equity is by nature protecting the buyer’s stake in the project. However, an equity type property condition assessment is typically thought to be more granular with an emphasis on the current state of the building wheres a debt style property condition assessment would be presented more as a forecast of future anticipated building investments over the life of the loan. In summary, a property condition assessment is a general overview of the buildings condition and then can be formatted to accommodate the different potential audiences.

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