Bricksave's Due Diligence Process

Due Diligence Process

To date (March 2022) Bricksave has successfully funded more than 140 properties, generating investors average rental yields of 9.03%, paid monthly in USD.

Our track record lies in the strength of the thorough due diligence process every property must satisfy before being presented to our investors.   


Step 1 - Location Analysis

1. For every territory, Bricksave’s Real Estate team analyses the top 100 largest population centres to identify those generating the highest verified rental yields.

2. We analyse 26 datasets and over 3,000 data points from industry leading sources including Zillow, the U.S Bureau of Labour Statistics, the National Association of Realtors, Freddie Mac, the U.S Census and the U.S Federal Reserve:

CATEGORY

DETAIL

Macroeconomic Demographic Evolution, Population Growth, GDP, Employment, Cost of Living, Household & Personal Income
Real Estate Market House Prices, Home Values, Affordability, Homeownership, Vacancy Rates, Sold Prices, Value Forecasts
Rentals Market Vacancy Rates, Single Family Rental Rates, Multi Family Rental Rates
Sales Market For Sale Inventory, New Listings, Time to Sell, Price Listings, Sales Counts, Price Reductions, Absorption Rates
Building Activity Building Permits Granted, Construction Periods

3. Local markets are then scored according to their rankings in each category and then a liquidity analysis identifies those with the greatest potential supply and demand.

4. This process is repeated on a quarterly basis to identify markets with an upwards trend for further analysis.


Step 2 - Market Analysis  

1. We conduct a thorough study of over 3,000 data points, comparing neighbourhoods within the local market for:

* Sociodemographic composition

* Crime statistics (total crime, violent crime, property crime)

* Employment and income (individual and household)

* Education (school and college)

* Healthcare provision

* Infrastructure

* Homeownership

2. Analysis is conducted at the block level, allowing the Real Estate team to identify specific neighbourhoods with the strongest investment potential.


Step 3 - Rental Analysis (approx. 500 properties per week)

1. Rental potential is assessed for each location. Monthly rental data at the zip code level is used to calculate average rental rates per property type.

2. Modelling these average rental rates to all properties available to buy identifies those with the strongest potential rental yields.

3. Further assessment is made including the insight and opinions of Bricksave’s local real estate partners, based on current market knowledge.


Step 4 - Site Analysis (approx.. 10 properties per week)

1. Properties are visited by our local partners who produce a bespoke report assessing both the neighbourhood and the real estate.

2. Reports detail the condition of the property, its suitability for rental to identified target markets and a professional estimate of renovation required to bring the property to a suitable condition for rental.


Step 5 – Legal Due Diligence (approx.. 5 properties per week)

1. Based on the site analysis the financial appraisal of each property is assessed. Where the investment credentials remain strong, the Real Estate team make an offer on the property. 

2. Bricksave’s legal partners begin conducting all necessary searches on the property to ensure there are no legal complications. Included within legal searches are:

* Local Authority Searches

* Planning

* Water & drainage

* Environmental

* Land charges

* Flood risk

* Chancel repair


Step 6 - Structural Survey (approx.. 3 properties per week)

1. If an offer is accepted a structural report details the condition of the entire property, future maintenance issues and any recommended or critical renovations required to:

* Foundations (basement and floor structure)

* Windows, doors, walls and ceilings

* Individual rooms

* Utilities (gas, electrical, plumbing network, heating system, air conditioning)

* Kitchen fixtures and fittings

2. Bricksave’s Real Estate team will then take the decision to cancel the offer, renegotiate an appropriate price to compensate for repairs required, or purchase the property at the original offer (on average we purchase 1-2 properties per week from the original 500 analyses).

Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.