All aspects of Property Investment require thorough Due Diligence.
In-Depth Due Diligence is especially essential when Buying at Auction because Auctions are where you are most at risk of buying a Lemon, not the Bargain that you thought you had found.
Without a System and Template to gather and record all the Data you need, thorough Due Diligence takes a lot of time and it’s easy to miss an important piece.
Even with a System & Template, thorough Due Diligence still takes time which with Auctions is limited to the period between Catalogue Publication & Auction Day, about 3 to 4 weeks.
Take a look at the Analysers & Templates that I use for gathering & number-crunching the data that is part of Property Investment Due Diligence.
Location Due Diligence Template (Word) in which to record all Relevant Location Data to help make Strategic Decisions.
The Structure of the Location Template splits a Location into 5 Neighbourhoods, each with a radius of ½ mile around a central Postcode subject to natural boundaries, such as major roads, railway lines & rivers.
The reason for Neighbourhoods is that people identify with Neighbourhoods, not Locations, after all, we all live in a Neighbourhood with Neighbours, not a Location with Locationers.
Even if your Investment and Home Locations are the same, still complete this Template. You will be surprised at the knowledge you will gain particularly at Neighbourhood Level.
I once found an Ex-Local Estate about ½ a mile from my home at the time in Oxford, which I did not know existed before completing the Template. It then transpired that the estate was rundown and one of the cheapest in Oxford sitting in the upmarket North Oxford Location.
At Neighbourhood Level data is gathered & recorded about a range of information, mostly available online, that is relevant to the viability of your Investment Strategy including:
- Viable Investment Strategies
- Tenant Sources, including Major Employers
- Education, from Nurseries to Colleges
- Financials & Statistics for Postcode & Local authority
Having completed your Location Template, you will only need to update it once or twice a year and it will also prove to be a valuable giveaway to your Tenant/Buyer Customers
To help you complete, the Template includes explanatory details about each section and there is an Online Tutorial.
For further information on the Location Due Diligence Template email David@MasterPropertyOnline.com
Single Lot Due Diligence Analyser (SLDD). Next on the list is the Single Lot Analyser for compiling Due Diligence Data, again found mostly Online, split under the following headings:
- Auctioneer, Venue, Date & Time, Buyer Costs & Fees
- Property & Lot No Details including Google Street View
- EPC Details including Assessor Contact
- History & Comps
- Location & Neighbourhood Housing Stock
- Seller/Flip Costs
- List of Possible Legal Pack Docs
- Maximum Bid Calculations
- Having completed the Analyser, all you need to do is:
- View the Property.
- Read the Legal Pack Docs listed in the Analyser
- Adjust Seller & Fixup Costs (post Viewing)
- Calculate your Max Bid.
- Make sure that you are Fit to Bid, Legals, Finance.
The 6 Stages of Single Lot Due Diligence Analyser
- Gathering Data Online. I visit over 12 Websites to complete my Single Lot Analyser.
- Speed Viewing. Having gathered the Online Data first, only Speed View the property if all your boxes are ticked. Generally, 15 min is allowed for Block Viewing along with other potential buyers.
- Work Specification & Costing. When Speed Viewing, complete the Works Specification Form and enter details into the Auction Deal & Fix-Up Analyser to cost required works on return to Office/Home.
- Confirm Source & Terms of Purchase Funds. 10% of Bid is payable on Auction Day, the 90% Completion Balance payable 14-28 days later. Failure to pay Balance when Due would be a Breach of Contract with Heavy Penalties. Competitive Tried & Tested Bridging Finance Brokers Available.
- Legal Pack Check. Legal Packs are published shortly before the Auction. Check immediately on release paying close attention to the Special Conditions which lists Seller costs to be recovered from the Buyer. Legal Packs can be amended up to the Auction Day.
- Arrange for a Fit-for-Purpose Solicitor to be on Standby to check any Contentious Issues arising out of the Legal Pack and Special Conditions.
Generally, there are between 21 & 28 Days from Catalogue Publication & Auction Day to complete your Due Diligence and calculate your Maximum Bid.
Maximum Bid: The calculation is relatively simple, the detail less so.
- Deduct from the Fixed-Up/Market Value
- Cost of Fixup
- Cost of Buying the Property (Including Legal, Auction, Seller, SDLT Costs, etc)
- Any Profit or BMV %.
- Result = Your Maximum Bid.
A Simple Calculation provided you have all the Numbers and can understand the Legal Pack Docs.
SLDD Analyser Costs & Terms
You can either Buy the Analyser Template for DIY Completion & Re-Use @ £ 45.00
You can instruct us to complete it in Stages as often as you like before going DIY:
- Stage 1 @ £75
- Stages 1 & 3 @ £100
- Stages 1,3 & 4 @ £125
- Stages 1, 3, 4 & 5 @ £150
For Each SLDD Analyser we will:
- Find & Load all the relevant Stage 1 Data into the Analyser.
- Upload Stage 2 Viewing Data into Stage 3 Auction Deal & Fix-Up Analyser if purchased.
- If Auction Deal & Fix-Up Analyser is not purchased, Fees for Stages 4 & 5 reduced by £25.
- Liaise with Stage 4 Funding Sources
- Inspect & List all the Stage 5 Documents that are in the Legal Pack.
- (We are not qualified to advise on Legal Pack Docs, but can recommend a Fit-for-Purpose Conveyancer.)
Complete & Deliver Analyser Timetable (Weekends & Public Holidays excepted)
- Stage 1 within 48 hours of Ordering
- Stages 2,3 & 4, within 24 hours of Data Supplied
- Stage 5 within 24 hours of Legal Pack release.
Single Lot Due Diligence Analyser (SLDDA)
The Analyser is developed in Excel.
With the exception of:
- Google Street View
- 2 Click-To-View Cells
- EPC Assessor’s Email
- Maximum Bid Calcs
All Cells are Locked
Introductory Offer Today for a completed Stage 1, Single Lot DD Analyser, Normally £75, Today £ 48
This sum is payable In Advance by Bank Transfer or Pay-pal when a SLDD Analyser is purchased
If the Analyser is bought shortly after the Catalogue is released, the Analyser is unlikely to include a completed Legal Pack section or Seller Costs, which are in the Legal Pack, as both are generally released shortly before Auction Day.
As soon as the Legal Pack is released your SLDD Analyser is updated and sent to you by email.
You will also be advised of any last-minute Amendments to the Legal Pack subject to us being notified by the Auctioneers.
The Details we need from you in respect of any SLDD Analyser are:
- Auctioneer, Venue & Auction Date
- Lot No, Street Address & Postcode
The 1st Stage Completed Analyser (Pre-Legal Pack release) will be emailed to you within 48 hours of receipt, Weekends & Bank Holidays excepted.
Following Legal Pack being published online, your Analyser will be update & emailed within 24 Hours.
We are available to discuss any aspect of the DD on a Consultancy basis using an Online Recorded Meeting Facility at the pre-paid rate of £20 per 15 minutes or part thereof. This includes Unqualified Observations on Legal Packs
For Further Information, Email David@MasterPropertyOnline.com