Project Due Diligence

Property investment has long been one of the most sought-after ways to build wealth. Traditionally, high entry costs meant only a privileged few could access this market. That's changed dramatically. Thanks to crowdfunding and peer-to-peer lending platforms like Simple Crowdfunding, anyone can now invest in UK property from as little as £100.  It's a genuine democratisation of property investment. But accessible doesn't mean simple. Whether you're taking your first steps as an investor or you're a seasoned property portfolio holder, thorough due diligence is important.

This blog breaks down exactly what you need to evaluate before committing your money to any property investment opportunity. We've organised this article into six key areas: The Company, The Team, The Project, Communication, Risk, and The Platform.

Let's dive into each one.

Before We Begin: How Simple Crowdfunding Supports Your Research

We know you can't ask questions about things you don't know to ask about. That's why Simple Crowdfunding provides two crucial layers of defence:

1. Comprehensive review – We evaluate every opportunity before it appears on our platform
2. Open Q&A forums – For each investment opportunity, there's a dedicated space where you can question developers directly. Every registered approved community member can view these conversations whilst the opportunity is open for funding. Once closed, the forum becomes private to investors only.

Now, let's look at what due diligence you should be examining yourself.

The Company

Start with the basics. Head to Companies House and dig into the fundamentals:

• How long has the company been trading?
• What's their track record with similar projects?
• What does their financial position look like?
• Who are the company directors, and what's their individual track record?

Don't stop at the company itself. Research the directors' other business ventures.   A quick Google search of their names can be surprisingly revealing. 

Take a good look at their company website. Does it feel professional and established, or does it look hastily thrown together?  Check that the registered address matches what's shown on Companies House.  Look for case studies or evidence of previous successful projects. Finally, check their social media presence – both company accounts and personal profiles of key individuals. What are they sharing? Does their online presence give you confidence?

The Team

Who's actually delivering this project? Look beyond job titles and examine real experience:

• What specific expertise are they bringing to this project?
• Have they successfully completed similar developments before?
• If multiple companies are involved, how do they relate to the fundraising company?
• Have these teams worked together previously, and how did that go?

The strength of the team behind a project is often your best indicator of likely success.

The Project (Including Financials)

This is where you need to roll up your sleeves and really scrutinise the details.

Experience and Track Record
Is this the developer's first project of this type, or are they experienced? If they've done this before, how did those projects perform? Note that a company might be new to crowdfunding whilst having years of successful development experience – that's perfectly legitimate.

Timelines and Contingencies
Do the projected timelines make sense, or do they feel overly optimistic? What contingency has been built in for delays or unexpected issues?

Location and Valuations
Research the area thoroughly. Are the projected property values realistic compared to similar properties nearby? Use resources like Streetcheck.co.uk, Rightmove, Zoopla, and online estate agents to verify valuations.

Financial Structure
Understand how the deal is structured:

• What does the complete finance stack look like?
• How much is the fundraising company investing themselves? (Significant personal investment is usually a good sign)
• Is this equity or debt?
• Is there a charge over an asset? If so, what exactly is secured?

Exit Strategy
How and when will you get your money back? More importantly, what are the backup plans if the primary exit strategy doesn't work out?

Communication

How will you stay informed throughout your investment?

• What's the communication plan? How frequent will updates be?
• How will updates be delivered – email, video, webinars?
• Are there opportunities for site visits or investor open days?
• Does the project offer any educational content for investors?

Good communication builds trust and helps you spot potential issues early.

Risk

Let's be direct: all investments carry risk, including the possibility of losing your capital and having your money tied up for extended periods. When evaluating any opportunity, ask yourself honestly whether you're comfortable with the risk profile. Here's a quick overview of the two main investment types:

Equity Investments
Generally viewed as higher risk, higher potential return. You become a shareholder in the company and receive returns through dividends (often from rental income) and capital growth (typically when the property is sold or refinanced). Your returns are directly tied to the company's performance – if it thrives, so does your investment. If it underperforms, your share value decreases.

Peer-to-Peer Lending
Generally considered lower risk, lower return. You're essentially acting as a lender, providing money for a fixed term at a fixed interest rate. Interest is paid either periodically or at the end of the loan term. These loans are typically secured against the property itself, usually on a first charge basis (meaning you're first in line for repayment if things go wrong).

You can explore the differences in more detail here: equity-vs-debt The real advantage of crowdfunding and peer-to-peer lending? You can spread your risk across multiple projects rather than putting all your eggs in one basket.

The Investment Platform

Not all platforms are created equal. In the UK, equity crowdfunding and peer-to-peer lending are regulated activities. Make sure any platform you use is legitimate and authorised. Check the Financial Conduct Authority register at FCA Register. Authorised platforms will display their Firm Reference Number (FRN) on their website.

Final Thoughts

Crowdfunding and peer-to-peer lending have transformed property investment over the past decade. They've opened doors that were previously closed to many people, making it possible to build a property portfolio at your own pace and investment level. The key to success? Do your homework. Use this guide as your starting point, ask questions, and never invest more than you can afford to lose.   

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