How to carry out due diligence on a real estate firm
I am George CEO Optiven Real Estate, I once lost Ksh.5 million shillings on a land transaction and it was one year of pain and stress. During that period, these are the lessons that I learnt that I would like to share with most of us who want to keep investing in real estate in a safe manner.
- Check whether the company is registered to conduct real estate business - Feel free to ask for a registration certificate, as it's your right.
- Check how long the company has operated and whether it has been in business for a while - It's always advisable to trust companies that have been in business for over 5 years. Research shows that 75% of startups fail within 3 to 5 years. Be very keen on startups that promise to deals that appear too good to be true. As they say, when the deal is too good, think twice.
- Check who the directors of the business are and whether they are real and or alive - Look into their past records and carry out due diligence on them. You can know directors by asking for a copy of CR12. You can also Google the Directors to get more info on them.
- Ask the firm if they have a successful project and let them give proof of the same - Visit that project to ascertain the facts.
- Ask the competitors if they are aware of the real estate firm offering you a deal - Remember that hearing adverts from mainstream media does not mean that the company is authentic. Testimonials are not 100% proof of authenticity, nor isthe use of models or media personalities in the same.
- Check if they have a registered office, with staff and visit the office - This is not 100% proof but it helps.
- Insist on visiting the project site before committing your funds - If in the Diaspora, send your representative or a lawyer.
- Always obey your gut feeling - Once again, obey your GUT feeling.
- Ask for the company profile and check the company structure.
Let's invest wisely and carefully.