How to Become a Successful Deal Sourcer

What is Deal Packaging?

So, what exactly is deal packaging? On one side, you’ve got property owners looking to sell, and on the other side, you’ve got investors searching for their next big opportunity. Your job? Introduce these two parties to each other and get paid for it. It’s that simple.

Essentially, you act as a specialised estate agent representing the investor, not the property owner. And trust us, there’s a lot of money to be made here if you know the right process.

Why is Deal Sourcing So Popular?

Deal sourcing is a preferred strategy for many in the property industry due to its ability to generate cash flow quickly.

Unlike other property strategies that may take longer to yield returns, deal sourcing and trading can provide immediate financial benefits.

Moreover, building a property business requires a focus on cash flow from the outset, much like any other business. This approach allows you to grow steadily and move on to more significant ventures once you have a stable income stream.

Finding the Investor First

Most people make the mistake of finding a property first and then looking for an investor. That’s a recipe for inconsistency. Instead, focus on finding the investor first. When you know exactly what your investor is looking for, you can then find the perfect property to match their criteria.

You can build a sustainable and lucrative business by focusing on investors first and offering them exceptional service.

Deal Sourcing Done Right

1. Identify Your Strategy: What kind of opportunities are you going to find? Buy-to-lets? HMOs? Service accommodations?
2. Choose Your Location: Be specific. Don’t just say “London.” Narrow it down to particular areas.
3. Offer a Comprehensive Service: Decide if you’re only finding properties or if you’ll offer a hands-free service that includes everything from negotiation to property management.
4. Understand Your Unique Selling Points (USPs): What benefits can you offer investors? Know these inside out.
5. Create Compelling Marketing Materials: Utilise social media platforms or apps to share your knowledge and attract potential investors.
6. Have a Clear Call to Action: Encourage potential investors to reach out and learn more.

The Process of Deal Sourcing

The deal sourcing process involves several steps:

1. Finding Deals: Use Rightmove and other property portals to find potential deals. Conduct thorough due diligence on each property.
2. Advertising: Advertise your deals through various channels to attract interested investors.
3. Signing Agreements: Use a Sourced to Order agreement to ensure investors are committed to paying your sourcing fee upon purchasing the property.
4. Securing the Fee: Collect the sourcing fee upfront and place it in a client account. This method ensures you get paid once the deal goes through the exchange of contracts.
5. Facilitating the Purchase: Assist the investor throughout the purchase process, ensuring everything goes smoothly until the exchange of contracts.

Our Three-Tier Strategy

At Sourced, we advocate for a three-tier approach to property business growth:

1. Cash Flow: Focus on deal sourcing and trading to generate immediate cash flow.
2. Profit: Move on to making a profit through more extensive projects like flips or commercial conversions.
3. Portfolio Building: Finally, build a portfolio of properties to ensure long-term financial stability.

The Importance of Compliance

Before you start sourcing deals, it is crucial to ensure you are fully compliant with all regulations.

Compliance not only protects you from potential fines but also builds your credibility in the market. Here are the key compliance requirements:

• PRS/TPO Registration: Register with the Property Redress Scheme (PRS) or The Property Ombudsman (TPO) to handle any complaints against you.
• AML Registration: Register with HMRC for Anti-Money Laundering (AML) compliance, as you will need to conduct AML checks on your customers.
• Insurance: Obtain Public Liability (PL) and Professional Indemnity (PI) insurance to cover any potential risks.

Advertising Your Deals

You can use multiple channels to advertise your deals. Social media, property investment apps, and hosting networking events are effective ways to reach potential investors.

At Sourced, we allow our franchisees to leverage our Investment App to list their deals and tap into a network of thousands of investors. Find out more here.

Conclusion

Building a property sourcing business requires a strategic approach, strong compliance, and excellent relationship-building skills.

By focusing on cash flow, nurturing investor relationships, and following a structured process, you can achieve significant success in the property industry.

We hope this guide has provided valuable insights into starting and growing your property sourcing business. Download our prospectus to find out how we can help you on your journey.