Sourcing is a huge topic, so let’s start by defining it. We are going to look at sourcing property opportunities and the type of property opportunities where we are looking for straight forward flips. That’s our aim, so let’s look at how we think about sourcing that kind of deal and how it’s done.
Firstly, why have we chosen to look at flips? The answer is simple and is all about your exit. If you’re sourcing flip projects, your first stop should be to look for property that is in a poor state, as this stock should benefit from a decent capital uplift once it has been refurbished. The way in which you can take advantage of the capital uplift is quite varied, which means you’re looking at many different structures at the same time. For example, if you are sourcing a HMO, you are sourcing one specific exit, which means your sourcing is specific, meaning you have cut down your potential market. If you’re sourcing a flip, then you are sourcing opportunity and assessing how you convert that opportunity is yet to be established – therefore you have a much better chance of finding the opportunity than you have of finding a specific exit. A flip could be sold to an investor as an opportunity, it could be converted by yourself, you could work with a JV partner, it could be title split, you could build on the land, you could convert into a HMO and many more.
Now the strategy is sorted, we need to develop the most efficient way possible of getting these opportunities to come our way. My first destination is always going to be Rightmove – let me explain why. Some people will go to agents first, however in my experience estate agents are far more open and communicative if you make contact with them to talk about a property they have listed. If you head in to have the ‘I’m an investor’ conversation, you will blend into the background of 20 other investors who they have that conversation with that day. If you talk about a property and you have solutions worked out to take that property from them, then you have elevated yourself into a serious prospect.
So, now we’re on Rightmove, what do we do? A flip opportunity could be any size and shape of property, so I would leave all the filters open. Obviously focus on your goldmine area, but the real specific trick is what you put into the keywords. Rightmove allows you 3 keywords which all work together. For sourcing flips, the most effective keywords we use are ‘modernisation’, ‘improve’ and ‘refurbishment’. Rightmove takes these 3 keywords and searches through all the property ads. Any ad that contains all 3 keywords is ranked at the top, then any ad that contains 2 of the keywords, then 1 and finally the ads that don’t contain any. Obviously, an ad that has the keywords we listed above has a far higher chance of being a property in poor condition, and therefore is a really good opportunity for a flip.
I would then use the properties I find on Rightmove and start to have conversations with the agents listing the properties. My intention now is to use this ‘ice breaker’ as a way of continuing the conversation with the agent and building a relationship.
For me this is the most organic, natural and effective way of building relationships with agents as well as finding great opportunities, but this only covers online sourcing – what else can you do and where else can you generate property leads for yourself?
If you’re sourcing offline (and we’re including agents in online) your strategy is going to be sourcing, which means your tactic should be to attract the attention of property owners. Property owners are everyone and everywhere so the more you spread the word about yourself and your business the better. Here are just a few examples of places you could leave business cards or leaflets, drop contact details or meet new people;
Networking meetings, sports clubs, bad condition properties you pass on the street, doctor’s surgeries, solicitors, funeral directors, your existing network, local magazine adverts – literally anywhere you can think of that has a regular footfall of people.