Episode Description
In this episode of Building Passive Income, CREI Collin breaks down third-party reports and how they impact your real estate investment.
Third-party reports provide independent analysis of a property’s condition, value, and risk. These reports help verify assumptions and identify issues before closing.
Learn which third-party reports matter most, what they include, and how they affect your underwriting and decision-making.
What You’ll Learn
Why third-party reports matter in real estate
The most important third-party reports to review
What an appraisal includes and how it is used
What a Property Condition Assessment reveals
The difference between Phase I and Phase II environmental reports
What surveys show and why they matter
When to order roof and HVAC inspections
How market studies support rent assumptions
Which reports are required by lenders
How third-party reports impact underwriting
Key Takeaways
What Are Third-Party Reports in Real Estate?
Third-party reports are independent evaluations prepared by licensed professionals.
They provide objective analysis of a property’s value, condition, and potential risks based on industry standards.
The Most Important Third-Party Reports
Appraisal
Property Condition Assessment (PCA)
Phase I Environmental Site Assessment
Phase II Environmental Site Assessment
Survey
Roof and HVAC inspections
Market study
Each report focuses on a different aspect of the investment and helps validate your assumptions.
Why Third-Party Reports Matter
Third-party reports help confirm the accuracy of the information provided by the seller.
They identify risks that may not be visible during initial underwriting and provide a clearer picture of the asset.
At CREI Partners, third-party reports are used to verify data, not assume it.
Lender Requirements
Most lenders require certain third-party reports before approving financing.
These often include:
Appraisal
Property Condition Assessment
Phase I Environmental report
Survey
Additional reports may be required depending on the asset and market.
How Third-Party Reports Impact Your Investment
Third-party reports directly affect:
Valuation and purchase price
Capital expenditure planning
Financing terms
Risk identification
Underwriting assumptions
They help ensure that the deal aligns with real-world conditions.
Best Practices for Managing Reports
Order reports early in the due diligence process
Work with experienced third-party providers
Review findings carefully and compare across reports
Use findings to adjust underwriting or renegotiate terms
Episode Highlights
[00:00] Why third-party reports matter
[01:00] Overview of key reports
[02:00] Appraisal and valuation
[03:15] Property Condition Assessment
[04:30] Environmental reports
[06:15] Survey and physical verification
[07:00] Additional inspections
[07:45] Market studies
[08:30] Required vs optional reports
[09:15] Managing reports effectively
[10:15] Impact on underwriting
Resources Mentioned
Appraisals and valuation methods
Property Condition Assessments
Phase I and Phase II Environmental Reports
ALTA surveys
Roof and HVAC inspections
Market studies and rent surveys
Zoning reports and zoning letters
Let’s Talk
If you are evaluating a deal and want help reviewing third-party reports or understanding risk, let’s talk.
Schedule a call with our team:
https://calendly.com/shelbi-creipartners/30min
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Next Episode
Episode 63: When to Move Forward or Walk Away from a Deal
Disclaimer
This podcast is for informational purposes only and should not be considered legal, tax, or investment advice. Always consult with qualified professionals before making investment decisions.
Keywords
third-party reports real estate, real estate due diligence reports, property condition assessment, appraisal real estate, environmental site assessment, ALTA survey, real estate underwriting, due diligence checklist real estate
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