Put it under contract THEN do you due diligence

[Dean Julie]

I have heard this tactic/strategy/philosophy/(BS) taught and suggested by many. The theory is, if the property turns out to really suck, you just renig on the contract (with some contingency) and you're on your merry way. However, when I've went back to these people that said it and offer them deals, all of a sudden, they want to do miles and miles of due diligence before they even get close to considering putting properties under contract.
So, those that really do do real-estate, what do you do? Do you do your due diligence first? Or do you put it under contract first?

Dean

[Timothy W.]

I've done it when lenders have backed out, but it's not good practice in general. Soon enough your offers get cylindrically filed by realtors and asset managers who think you're wasting their time.

The bigger issue is to really pin down what kind of properties you want and know your market well enough to know if they're a yes or no. All I need is purchase price, property taxes and a walk through to know anymore so my due diligence is about 20-30 minutes per property then await my title insurance policy paid for by the bank. Now I buy REOs where the title is clean before I get it so my due diligence is probably less hairy than others but the real trick I've found with this is to simplify it big time and just do a DD on your entire market so when a property pops up at a certain price in a certain area you already know to buy it.

Tim