BOSTON-Not all communities around the country are worried about a possible multifamily overbuild. In fact, Boston Mayor Thomas Menino has just called for 30,000 new housing units to go up in his city by 2020.

Given the push, and the expectation that national development is on the verge of picking up in virtually all commercial real estate sectors, Tom Guidi is concerned. Guidi, who is senior real estate partner at the locally based law firm of Hemenway & Barnes, thinks that investors, especially first-time investors, need to keep certain due-diligence basics in mind.

Actually, given the leap-before-you-look mentality that pervaded the CRE market in the run-up to the Great Downturn, even seasoned pros might be well-served to heed the lawyer's advice. Based on what he is seeing cross his desk, “there is a frenzy of projects,” Guidi notes.

That need prompted the law firm to produce a white paper on the subject, in which Guidi notes that, “Following a developer's lead through negotiations can be tempting, however investors must be certain they know what to ask for when structuring a deal to ensure a balanced transaction. As activity heats up, both parties should avoid rushing into an agreement; laying out the necessary protections will help keep the relationship–and the project–in good standing.”

And while “frenzy” might vary market to market, the trend is clear. With that in mind, in an exclusive interview, GlobeSt.com asked Guidi to give us his five basic rules of due diligence.

1) Real Estate Is Still Location. “Investors need to know if the property is in a good location,” Guidi says. But location is more than address. What other developments are happening locally and what do they mean for the area's potential growth and your potential competition? What are the area's demographic trends?

2) It's About Time. Guidi says potential investors need to know where we are in any economic cycle and polish off the crystal ball to project where will be when the project wraps. “You don't want to be the last one into an area that is filled out with projects,” he says. Also figure on delays in getting approvals. “It could be a great project and zoning delays could hold you up for years.”

3) Money Talks or Walks. Interest rates are great now, as is pricing, but again, time impacts money. So do hidden costs. Have you checked out your property's infrastructure needs? Remember, banks these days are looking for roughly 60% of a project's construction costs put up by the partners. That means you.

4) Past Dictates Future. Who are you getting involved with? Does the developer have a track record in this sort of project? “You could have major issues if this is someone's first attempt at a development,” says Guidi, “or even if it's an experienced developer with no experience in this type of project.”

5) Who Are You, Anyway? Do you know all the players in the game? Who are they? What are their roles and how much are they putting up?

“Sophisticated investors may already have a system in place for due diligence and will be able to efficiently assess the project and participants,” says the white paper. “For those embarking on their first real estate development venture, deploying a team to gather information about the developer, partners and the project itself should be key to the decision-making process.”