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Transcript

THE DEAL

CLINIC

With Lindsay Hopkins

WHAT IS TDC?

OVERVIEW

The Deal Clinic is a tool you can utilise to ensure you've thought about everything before you pull the trigger on a deal.

Do the numbers really add up?

Have I accounted for...?

CLEAR ON

DEMAND?

Are you certain the demand is there, and do you have evidence to back this up?

CLEAR ON

DEMAND?

EVIDENCE

EXAMPLES OF EVIDENCE

Have you tested demand through a dummy ad online?

Maybe you already have properties in the area and know your stuff? Can you provide evidence similar to the property you're looking to buy?

LOCATION

LOCATION

Are you certain this is the right location for you, and it hasn't been chosen at random or based on other's findings?

Do you know your area like the back of your hand? Which side of the street is more desirable than the other?

Is it within a manageable distance from your base location, or could you or your team get there fast in case of an emergency?

ARE YOUR NUMBERS CLEAR?

Have you stress-tested your numbers, demonstrating affordability?

Have you accounted for all costs?

CLEAR ON

NUMBERS?

LETTING

Have you accounted for:

- Purchase Price + Stamp Duty

- Legal Fees

- Refurb Costs

- Management Expenses (10% +VAT p/m)

- Monthly Operating Expenses (10% p/m)

e.g. Boiler breaks down, carpet, leaks...

- Desired Cashflow (e.g. £120 p/m)

FLIPPING

Have you accounted for:

- Purchase Price + Stamp Duty

- Legal Fees

- Refurb Costs

...

WAY OUT

Do you have a back-up plan in place, in case your primary strategy falls through?

Can the property be flipped if all else fails, rented or converted?

EXIT

STRATEGY?

CLEAR ON

REFURB £?

ARE YOU CLEAR ON

REFURB COSTS?

HAVE YOU GOT MORE THAN 1 QUOTE?

HAVE YOU GIVEN YOURSELF

ENOUGH

TIME?

MONTH 1

MONTH 3

MONTH 2

NOW

ARE YOU

ORGANISED?

HAVE YOU PLANNED FOR UNEXPECTED

EXPENSES?

WHERE IS THE MONEY COMING FROM?

CLEAR ON

PURCHASE

FINANCE?

Is the money from savings, or will you be borrowing?

ANGELS?

WILL YOU BE USING ANGEL FINANCE?

An Angel is someone with the financial capability to privately loan you money, usually in exchange for 4-12% interest over an agreed amount of time. This can be paid off monthly or as a lump sum at the end of the agreed period.

Angel Finance is a win-win, as you will be able to offer a higher return than the banks. Banks could be offering no more than 1% interest for example, and you could be offering 6%. That's 6x greater than what they're getting now! This of course depends on if your deal really is a deal.

MORTGAGE/BRIDGE?

LENDING

Will you be getting a 75% Loan to Value (LTV) Mortgage?

Or perhaps a Bridge loan? (usually around 65%)

How will you be funding the 25-35% (or more) remaining on the purchase fee?

Note: 100% lending is frowned upon by lenders, you should always have some of your own money in the deal, even if acquired through an Angel.

ARE YOU CLEAR ON

RE-FINANCE?

CLEAR ON

RE-FINANCE?

Are you aware of the 6-month rule?

Have you got a quality broker at hand?

Will you be leaving any money in the deal?

CLEAR ON RE-SALE

CLEAR ON

RE-SALE?

Are you selling through an agent?

Are you looking for a quick sale, and do you have a strategy for this?

Have you researched the estimated market value correctly? Will it be MIMO?

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