One of the questions we’ve been asked most is “What exactly does a property sourcer do?” or comments along the lines of “They must spend all of their time on ESPC/Rightmove/Zoopla”. So, is that true?
There are plenty of property sales that happen “off-market”. There are many reasons for this – it could be time, convenience, circumstances or a variety of other factors. In reality, off-market sales are the best way to get good value properties, as by the time a property has hit the ESPC or similar, it is likely that dozens of other people can see the value and you’re immediately caught up in the lottery of closing dates and sealed bids.
For clarity, my use of the word value does not mean “Below Market Value (BMV)”, which is a buzz phrase in the property industry. Value means totally different things to different people in different locations; value could be as simple as securing a property for a small percentage over the home report, or even paying a premium for a property because you have identified an opportunity to add value that others haven’t. A sourcer’s job is to find and leverage that value for investors.
Understanding the industry and how it works is key to being successful, so confidently navigating the “off-market” property sales industry is absolutely critical. There is no manual, process or silver bullet here; attending such and such networking event, or speaking to an individual is not going to suddenly unlock access to huge numbers of value deals. It’s about putting in the hard yards. Expanding your network, many, many coffee chats, speaking to other sourcers (think of them as your colleagues, not your competitors) trawling the internet – because there is value there – and even walking the streets looking for opportunities in person. My wife is convinced that one day I am going to crash the car because I get distracted by a for-sale sign, or an interesting building that I think has great potential to add value.
And finally, after trawling through many properties, deals, spreadsheets etc, you will find one that works. It might be that you have been lucky enough to get there first, you have spotted an opportunity that everyone else has missed or that you just happen to have an investor that is looking for exactly that deal. What next? Surely you just click on “forward”, send it you your mailing list and someone will respond straight away to take the deal off your hands? If only! Identifying a deal is only the first step. Then follow hours, days, weeks of due diligence to make sure the deal works for everybody concerned. I’d love to go into that in more detail now, but I suspect I’ve just found the subject for my next blog!