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  • Landlord Resources

    PT TV: Due diligence guide and tips from industry professionals

    In property, due diligence is paramount.

    It should be undertaken on:

    Property purchases
    Property viewings
    Deal sourcers
    JV partners
    Networking and education events
    Mentors
    Mortgage products
    Suppliers, products, and services
    Lettings agents
    Tenants
    Strategies

    .... in fact, anyone you might end up undertaking a commercial transaction with.

    At the Property Investor Show, we asked industry professionals to share their views on due diligence and also tips of how to avoid making costly mistakes.

    In property, none of us can afford the cost of ignorance so every property investor and landlord needs to become a practitioner and expert at due diligence and research and learn that you must NEVER take anyone's word for anything!

    DYOR - do your own research is the way to avoid the pitfalls, risks, and the sharks.







    Please add any other due diligence tips of your own to build up the knowledge base!

    Further information on due diligence
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    I was at the Local Landlord Show in London today.

    One of the panellists, Ying Tan, M.D. of The BTL Business, made an interesting due diligence comment.

    He said that, before he purchased his first property, he viewed 100 properties in his area to fully understand the market place.

    Property expert, Kate Faulkner, also echoed Paul Shamplina's comment in the video, saying that landlords should only ever let through an accredited agent with client money protection.

    Anyone got any other due diligence tips?
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    Fabulous video from genuinely experienced property people.
    Anyone starting out in property should watch this video everyday as a due dil mantra to reinforce the message.
    Trust no-one except yourself and get as much information as you can from these kind of property experts who have nothing to gain from providing this kind of information.
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    Thanks so much Mike.

    I do think this video gives tremendous value ... so much good advice shared. I am grateful to all the people who took part.

    I loved the way Richard Bowser said words to the effect that, if you invest in due diligence at the beginning, you can save money and heartache later down the line. It gives new meaning to that old chestnut "You make money on property when you buy it, not when you sell it". That saying is usually about building in equity, but it could also mean that you've built in low risks through DD.

    Due diligence is often mostly associated with property purchases and understanding deals, but it extends to every aspect of your property and the people and companies that you associate with it.

    So all landlords need to become due diligence experts and understand how to research every aspect of property investment and landlordism.
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    As a Landlord there are many 'hats' you need to wear - and being diligent with all of them is so very important.

    As some of the peeps in the video alluded to, due diligence covers many facets from a deal to a person or company you wish to work with.

    The good news is that being diligent now-a-days is being made easier by the advent of the web and the various apps that are available.

    This topic is very interesting and, given the interest in it, over the next few weeks a whole lot more will come out about 'best practise' on the subject.

    N
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    [Image: 4995468760_6be86655d4_t.jpg]
    general operations director, site owner and moderator - propertytribes.com

    Coincidentally, today's Property Podcast was all about researching a potential property investment: we ran through over 40 separate factors, and still only scratched the surface.

    I think (although I could be wrong) it was Vanessa who I first heard say "a lot of people spend more time researching a holiday than a property investment", and that's true a scary amount of the time.

    The tricky part, I think, is being able to research everything to death without getting stuck in "analysis paralysis": finding that balance where you can confidently take action once enough research has been done.
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    Great solid vid .
    Full of the experienced views of some of the industry giants.

    Its ok to have OCD about DD.
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    Jonathan Clarke. http://www.buytoletmk.com

    Excellent video, definitely a `must watch`.

    Richard Bowser`s "It`s not like buying a can of baked beans from a supermarket" is a classic.
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    Thanks for the positive comments.

    @Rob

    I think it was Nick who said "most people spend more time researching a mobile phone than a property deal"!
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    I put on a post on tribes very recently which said you should never buy a house from a property sourcer without viewing it.

    Somebody phone me from the forum and asked my why! I was quite stunned really.

    You don't buy a car without going to a car showroom and doing test drive - and you can do lots of online reviews on a car. Yet, some people are happy to buy houses unseen and on the back of some sales speal from a sourcing company.

    Lot's of Southern investors get burned this way, because they think Northern properties are cheap and high yield.
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    (19-10-2013 05:34 PM)Glenn Ackroyd Wrote:  I put on a post on tribes very recently which said you should never buy a house from a property sourcer without viewing it.

    Somebody phone me from the forum and asked my why! I was quite stunned really.

    You don't buy a car without going to a car showroom and doing test drive - and you can do lots of online reviews on a car. Yet, some people are happy to buy houses unseen and on the back of some sales speal from a sourcing company.

    Lot's of Southern investors get burned this way, because they think Northern properties are cheap and high yield.

    In an ideal world I agree Glenn you would want to see the product before you buy. But thousands of products are bought everyday without seeing them and with limited DD. A property is just a more expensive example of such an item. Many people fork out 5K on a decent holiday and hotel without seeing the product first

    The phrase `` sales speal`` you use has rather negative connotations but if that was substituted with ``comprehensive data anaylsis`` then that along with a high degree of trust in the sourcer could quite comfortably give rise to confidence I feel in the investor buying blind.

    In fact a newbie investor might miss a dozen potential issues with a property on viewing that might cost them 1000`s whereas a professional sourcer who views on their behalf may in fact save them 1000`s due to his or hers experience and knowledge

    Several UK based and overseas investors have brought blind through me and do not regret the choice they made. They have made money on the back of me Buying blind can be more to do with their attitude to risk and to minimise that risk, all they have done is transferred their DD from the property to the property sourcer.
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    Jonathan Clarke. http://www.buytoletmk.com