DUE DILIGENCE – FOR THE SECOND PART IN OUR SERIES
In property circles we are all familiar with the phrase “due diligence” but it is often talked about in terms of “the deal” – the bricks, mortar, facts and figures of the deal. Equally as important but often overlooked is due diligence on the people you are working with. In this, the second part of our series on due diligence, we look at the people puzzle and talk about why checking out people, as well as property deals, is every bit as important.
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Google the individual and the company (if there is one)
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Check out both company and individual on Companies House
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Request details of their background, experience, and track record
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Ask to speak to past clients or people who have invested or worked with them
We have all seen the posts on social media, you know the ones, the ones which make those of us who have been in business a while cringe. They are asking for money or JV partners, and they usually talk of amazing deals which “just cannot be missed” and are “only available today”. Further, most of us have come across the self-styled “property gurus,” sharks and unscrupulous people, who are out to con the unsuspecting of their hard-earned cash.
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Search for them on social media and online forums
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Talk to people in your network – ask about the individual and the company
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Do all the usual due diligence on the deal itself – does it stack?
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Does their body language match their spoken language – what’s your “sense of them?”
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Do you feel comfortable with them?
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When things go wrong, as they often will, do you get a sense that they will be solution focused and working side by side with you or will they be finger pointing?
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Are they excessively flattering or overly charming?
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When you’ve spent time with them (over coffee etc.) how do they treat others?
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Are you compromised? More on this on the next page.
What is interesting though, is that when we hear the stories, we always think “this would never happen to me… I would never fall for this” and yet people do and, it’s often not just the newbie investors who fall for the patter and the stories, it’s the experienced ones too. In this article we are going to look at the practical things we should be doing to check out the people in the deal, whilst also looking at some of the psychological principles too. The practical checks and questions you should ask yourself: 20
