Property deal sourcing involves searching for, and negotiating, a deal for a property. This is then sold on to a buyer, who has either asked for such a property deal or who may be interested when approached.
Sourcing the property, in the first place, involves identifying a good location, checking current market rates, local amenities, potential regeneration opportunities and the neighbourhood in general. The sourcer will be paid for their efforts by receiving a percentage of the deal sold to the buyer and which he or she will be fully aware of.
Having an individual carry out property deal sourcing saves the time-poor or international buyer (investor) the trouble of having to find the property themselves and deal with solicitors etc. This is why investors are happy to pay a fee to the property sourcer for his or her trouble.
Property deal packaging
The sourcer may also have found potential tenants for the property so that all the investor has to do at this stage is provide the financing and go on to receive rental income at a later stage. This further process is referred to as deal sourcing packaging. It is extremely popular amongst investors, who appreciate that property can often provide much better returns than stocks and shares.
Difference between a sourcer and estate agent
An estate agent doesn’t have to find properties, since most sellers will come to him or her and ask for their help in finding a buyer. Right from the start then, this means that the estate agent is working for the sellers. This means they aren’t going to be particularly keen to find a good deal for a sourcer, unless it’s a run-down property they have been unable to shift for some time. In this instance, it’s the sourcer that is helping the estate agent.
The sourcer is always looking for the best property package deals for a buyer. In addition, he or she will not only find the property, but also the tenants to rent it and often go on to sort out the tenancy agreement too.
Ways of deal packaging in the UK
One of the best ways to find deals is by networking. Meeting up with, and solidifying, working relationships between estate agents, investors, planning officials, local solicitors and conveyancers, are excellent ways of getting to hear about properties on the grapevine. Getting an initial lead before a property goes to market is often where the good bargains can be found.
Other property deal sourcers are also an excellent way of finding out about property deals. It could be that a sourcer just doesn’t have the time to follow-up on a lead they have been tipped off about. Then again, it’s perhaps too far out of their location. As such, it’s not unusual for deal packaging sourcers to pass on potential property tips between themselves. Here at Sourced we have more than 160 property deal sourcing franchisees.
Another good way to learn about deals these days is online. Check out social media channels (for which you can use paid ads) and town location pages, as well as property portals such as Rightmove and Zoopla.
Getting started with Sourced
At Sourced we run various training courses on sourcing and deal packaging. You’ll be joining lots of property investors who enjoy property deal sourcing as a means of boosting their existing portfolio income. And if you’re just starting out, sourcing is a great way to get a cash flow up and running to purchase your own properties. Find out more by downloading our Sourced Franchise prospectus today.