Locating and Initiating
Inspiration Group’s 6 step method for locating and initiating new projects:
1. We have created an extensive information network with institutions and individuals such as – banks, leading real estate firms, court houses and entrepreneurs – which enables us to identify the most attractive opportunities in the market.
2. Once a potential property is located, an analysis of the asset’s potential, according to a set of parameters commences: asset’s price, location, general condition of the property, rental rates, size and layout of apartments, and the legal status of the property.
3. Initial physical examination of the property: we visit the building accompanied by professionals such as architects or engineers, and real estate agents. The visit included an inspection of the apartments, the attic and the basement where the central heating, electrical and water systems are located.
4. Performance of market surveys, and estimation of apartment values in various conditions: prior to renovation, after completion of renovation, and selling price of the apartments – vacant or occupied with rent paying tenants.
At this stage we receive estimates of costs both for the renovation of public spaces in the building, and of individual apartments. In addition, a report is prepared concerning the structural condition of the edifice, and initial estimates of the extent and terms of loans are received from the financial institutions with which we conduct business.
5. Preparation of a detailed business plan, which includes the various existing sales options; the analysis of these options, and the formulation of the optimal strategy for the project.
6. Issue of LOI or official bid for purchasing the property while determining payment arrangements and the commitments of the seller.
7. Raising equity capital required to purchase the property.
8. Actual purchase.
Every week we examine dozens of new projects, most of which fail to pass the strict performance criteria we have set.
Once a project does pass the thorough examination process, we feel confident regarding its future performance, and the process of fundraising commences.