Last week I was giving you some Due Diligence tips… but there are some more things you need to think about.
This week I defend the honour of solicitors… it’s not all about divorce and getting sued for offending someone by telling the truth… lol… Solicitors have other uses as well…
…and when it comes to investing in property (regardless of what kind) – you need a good one on your team.
While you can already get a ton of valuable information for their memorandum, you’ll need to do a lot more work to see if a property is worth investing in.
For this reason, you’ll want to work closely with a town planner or a solicitor.
So what can a solicitor help you with?
In reality, this will depend on the type of development you’re getting into. In some cases, you’ll need a full town-planning search. This is the case when you’re dealing with a development site.
But if you’re just buying a property, a limited search might be good enough.
The search will give you some vital information, like confirmation of zoning and a list of applicable conditions. This gives you clarity on what you can do with the property and if there are restrictions that you should be aware of.
Other than the search, a solicitor will give you information about leases.
This is crucial because you’ll rent out the property to many tenants until the property builds up in value and gives you the capital gain you need.
A solicitor will let you know if the leases have the right format capable of enforcement. Of course, you’ll also want your own lawyer to take a look at this to ensure that everything’s in order.
Next, a solicitor can confirm the terms of the lease so that you can rest assured that the tenant can’t terminate it at an early date.
All of this lets you protect yourself and maximise the property’s potential. You can see how rent increases work and if you can secure higher returns that will boost your cash flow.
Next, a solicitor can help you see if there are valuable negotiation points that you might want to pay attention to.
What’s more, a solicitor can add a clause regarding the due diligence period. For example, you’ll have 30 days from the contract date to complete the due diligence. Nobody can buy the property during this timeframe, meaning that you can take your time and get all the information you need to make a good decision.
Plus, you can set timeframes for getting the information you need.
For example, you might have a request that certain documentation gets provided in three days. If the request was reasonable but not met, you have the right to back out of the deal.
There are all sorts of clauses that the solicitor can add. They can also give you some crucial pieces of information that you shouldn’t proceed without.
Because of this, you’ll want to work with a good solicitor that can help you complete due diligence as smoothly as possible.
Of course, there are many nuances that you need to be aware of. To learn more about them, go ahead and sign up for my webinar.