For the selection and acquisition of properties, we follow a very selective internal process that conducts a thorough financial analysis of the property and also full due diligence on all potential risks and legal requirements. Our aim is to combine low risk with solid returns, both from rental income and potential for appreciation. In this process, we closely work together with our local real estate advisors.
Let’s break this down and take a look at all the steps we go through when acquiring new investment opportunities.
1. Property sourcing - we usually get properties sent to us from our real estate network and we also source ourselves through various channels.
2. First high-level review - we go through an initial high-level review focussed on estimated valuation, rental yield, location and rental compliance (WWS points). This allows us to discard, relatively quickly, ~80% of opportunities for not meeting our standards.
3. Second deep-dive review - in this stage, we request and review additional property information and documentation such as permits, rental agreements, VvE information, etc., and perform more extensive financial modelling and valuation to get a strong sense of market value and return projections for next years.
4. First negotiation - once properties have successfully passed the second review, we approach the seller with a fair offer and terms. Here we negotiate with the seller to come to a preliminary agreement on price and terms, on the condition of a final due diligence with external experts. Less than 5% of opportunities make it to this stage.
5. Third external review - now that we have a preliminary agreement with the seller, we involve external experts to do a thorough inspection. The goal is to uncover every detail about the property, allowing us to make a confident decision on the investment potential, fair value and potential risks. These reviews include:
6. Second negotiation - depending on the outcome of the final due diligence, the original negotiated price and terms are either finalised, in some cases further negotiated, or we decide to pass on the opportunity because the property does not meet the criteria.
7. Complete sell agreement - this is the step where the notary comes into play. We work with various trusted notaries so that we can move as fast as needed.
8. Launching the property - prepare the property to meet all AFM approval requirements, ready all investment information and documents, set up property on our app, issue notes on the property, etc.
Now, the property is finally ready for you to invest in!