Many of our investors ask us about how we come across the properties that we list on the platform. The truth is, a lot goes on behind the scenes between introduction and launch, and we wanted to give you an insight into the steps we take to bring you our product.
Step 1. Analysis
When a potential property lands on the Investment Team’s desk, it is subjected to a stringent analysis of the financials. The Team will likely tell you that they spend a great deal of time modelling, however this is on Excel rather than in a glossy magazine! The fundamentals are approached from many angles and carefully stress tested to see whether the property is suitable for our investor base. We recently worked out that we have over 60 individual points to hit before we are satisfied with our due diligence on a property.
Step 2. Viewing
Should the numbers check out, the property is then viewed by one or more of the team. In this process, we are looking at a number of factors to determine whether the asset represents a good quality investment:
- Good standard of furnishing
- Modern appliances
- Robust internal heating
- Natural light
- Solid ownership history
- Favourable residential surroundings
- Relevant planning permissions
- Historically-performing rental covenants
Step 3. Presentation to the Investment Committee
The Team will then gather up all of the collected data and put it into an extensive pack for review by Yielders’ Investment Committee, comprising C-Suite members with decades of Real Estate, Legal and Accountancy experience between them. This is an important step as it allows points to be raised about the fundamentals of the property which may have been missed, aligning with our core ethos of prioritising responsibility to investors. At this point, the proposition will can be approved, rejected, or the Team will need to find more information.
Step 4. Offer and Acquisition
Should the Property pass Step 3, an offer will then be made based on the financial analysis undertaken throughout the process. A careful analysis of costs throughout the investment lifecycle is forecast, which then determines the offer that can be made and drives the projected returns that users then see on the platform. For example, maintenance funds need to be accrued in case the boiler breaks down or a pipe happens to spring a leak midway through the investment term.
Step 5. Structuring and Marketing
If the offer is accepted, then work begins on structuring a limited company (or Special Purpose Vehicle, for those in the know!). We do this as it then allows us to issue shares in the asset through our online platform, each one representing direct proportional and legal ownership on the asset. The Team also takes numerous photos which feed into an investor pack, which is then sent out to our network of High Net Worth investors. Typically, two or three of them will pool their funds together to acquire the asset, in return for which they are offered 1-3 months’ worth of rental income. This is known as Prefunding, which allows us to keep all of our opportunities free from debt and leverage.
Step 6. Launch
Once the prefunding period has concluded, we are able to launch the opportunity on our website. Since it has already been acquired, it is already generating rent, meaning that investors don’t need to wait for the funding to reach 100% before they are eligible to start earning rent. We send out an email to all users* as standard as soon as an opportunity is live. For registered users, keep an eye out on your inbox over the next couple of weeks! For those who are not yet users, why not sign up today? The process takes just 10 minutes, and there is no fee to have an account with us!
*so long as they have opted-in to our marketing preferences! If you have not opted in please get in touch with the Team (firstname.lastname@example.org) if you decide you would like to receive new asset emails.
Yielders does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Investments in property and unlisted shares carry risk and you may not receive the anticipated returns and your capital may be at risk.