The Look on the Investor's Face Said it All!
In the world of property investing and deal sourcing, we often rely on a network of trust, information, and a little bit of faith.
But in 2017, I learned a hard lesson that has shaped our property sourcing practices ever since.
It’s a story about a deal in Carlisle, a misinformed seller, and the critical importance of seeing a property with your own eyes before bringing investors into the picture.
It's a mistake I only ever made once.
A Promising Deal from a Distance
It all started when a seller contacted us directly - a classic scenario in property sourcing.
They owned a block of flats in Carlisle and needed to sell them quickly. The owner had purchased the block just a few months prior with the intention of using it for serviced accommodation, but a sudden change in their circumstances forced a rapid sale.
For anyone experienced in property investing or especially deal sourcing, this kind of urgent opportunity can seem ideal - if the facts check out.
We were based a long way from Carlisle, which presented a logistical challenge for our property sourcing efforts.
However, the seller was very reassuring. They insisted the flats were in the same excellent condition as shown in the original sales brochure they provided.
The photos looked great, and the numbers made sense.
Based on this information, we reached out to an investor we knew who had expressed interest in this type of property investing opportunity.
After reviewing the details we sent over, they were keen to take a look. We made the arrangements for a viewing.
The plan was simple. Our buyers were traveling up from London, a significant journey for any property investing opportunity.
We would meet the seller just before the viewing, sign an option agreement to secure the deal, and then proceed to the property together. It felt efficient and straightforward, reflecting the best practices we strived for in our property sourcing business.
The Moment Everything Unraveled
On the day of the viewing, my partner Tony and I arrived at the meeting point, ready to put our property sourcing skills into practice.
We met the seller, shared a coffee, and signed the agreement as planned.
Everything was moving along smoothly. With the paperwork sorted, we all made our way to the property to meet our buyers, still confident in the information we had gathered.
Tony and I arrived first, and as I got out of the car and looked at the building, my jaw dropped.
From the perspective of someone deeply involved in sourcing and experienced property investing, it was immediately clear that something was wrong.
The property was nothing like the brochure - a stark reminder of the necessity for thorough research for any deal you source.
The photos we had been shown couldn't have been more misleading; they must have been at least a year old, if not more. The building was in a clear state of disrepair.
Just then, the owner pulled up beside us. They got out, walked straight to the front door, and went inside.
A minute later, they emerged, and their face was ashen. I genuinely thought they were going to collapse right there on the pavement.
We walked over, and they admitted the truth: they had never actually visited the site before buying it themselves and had no idea about its poor condition.
A classic pitfall in property investing and a stark reminder of why diligent property sourcing is crucial before any deal completes.
My heart sank. I felt sick to my stomach. Our investors, with whom we had built a strong and trusted relationship through years of dedicated property sourcing and property investing, were minutes away from arriving after a long drive from London.
We had described a property to them that simply did not exist - a major failure in our usual property sourcing standards.
The professional embarrassment was overwhelming.
Facing the Fallout
As if on cue, two cars pulled up, and our buyers got out, ready to assess this property investing opportunity.
The lead investor looked directly at me, and I knew instantly from the expression on his face that he was not pleased.
From years of experience in property sourcing, I could see he understood the situation immediately, even without stepping inside.
I felt deeply ashamed for having wasted their time and dragging them all that way for nothing - a harsh reminder of how critical thorough property sourcing and diligence are to successful deal and client relationship.
To their credit, they were polite and still conducted a viewing. However, it was painfully obvious that this was not what they were looking for - another costly lesson.
The level of renovation required was far beyond the scope of what we had presented, and certainly did not meet the expectations set during our deal sourcing process.
They confirmed it was a complete waste of their time, got back into their cars, and began the long drive back to London.
After they left, the shell-shocked owner turned to me and asked, "I suppose that sale is out of the window now then?"
In that moment, the reality of just how critical proper due diligence and research truly are hit me hard. You can only imagine my response.
The Lesson That Changed Everything
That day taught me one of the most valuable lessons of my career in property sourcing.
In this industry, you can never take someone’s word for the condition of a building - no matter how convincing the photos are or how trustworthy the seller seems, there is simply no substitute for conducting your own thorough and personal inspection.
By taking a shortcut in our property sourcing process, I had not only wasted my own time but, more importantly, damaged my credibility with a valued investor.
In the realm of property investing, trust is everything - and I had jeopardised a relationship that had taken years of solid deal sourcing to build. That feeling of letting them down was far worse than losing the deal itself.
From that day forward, our property sourcing process changed fundamentally.
We have never, ever arranged for an investor to view a property before we have seen it with our own eyes - no exceptions.
No matter how far away the site or how straightforward the deal may seem, thorough research is non-negotiable. Due diligence starts on-site.
That experience in Carlisle was a painful but necessary turning point that has made us better, more reliable partners for our investors, and has shaped the strict standards we now hold for property sourcing and every aspect of our business.
Want to avoid making the same mistake?
NAPSA's training has been created based not only on national compliance standards, but also experiences from actual property sourcing agents. We equip agents with the skills, knowledge and tools to avoid mistakes just like the one we made.
Find out more of how we can help your business by downloading our Free Compliance Checklist Guide or take a look at how our training programme and membership can help keep your business on the right track!