What Qualifies as a Quality Property Sourcing Deal?

Sky Rise buildings in Manchester. Represents a quality property sourcing deal

How do you put together a quality property deal for your investors when you’re sourcing property and real estate? The answer is that you only choose properties where you have a full picture of the market in which you’re sourcing and you seek to match like with like, as per the requirements of the niche, property investor you’ll be looking to attract… one that’s happy to pay you more for the services you’ve provided.

[0.25] What qualifies as a quality deal when sourcing properties?
[0.50] Understanding the property sourcing market
[1.10] Understanding your investor’s requirements
[1.30] The importance of niching down
[2.20] Discounts are important
[3.05] Putting it all together
[3.25] The fully packaged deal
[3.50] VIP property training course overview
[4.13] Join our FREE property training today

Video Transcript

Welcome to Property Investments UK. Today we’re going to be covering a question from one of our clients regarding property sourcing and the fees that you can charge for quality deals. This is following on from the questions that Frank Hamilton has put to us over the last couple of weeks.

So the question is…

“Hi, Rob. What would you qualify as a quality deal in order for me to receive a finders’ fee from property sourcing and what do I need to do to achieve maximum results? Finally, do you have a course for this and if so how much are you charging?”

Yes, we do offer a property training course which covers property sourcing along with a number of other strategies as well. I can talk about that at the end and what we’ll do first is just answer your original question.

1. Understanding the Market

With property sourcing, each property that you find is likely to attract a slightly different fee. It will be dependent on rental yield, the discounts that may be included in the property, the type of property it is, the condition it’s in and the location as well. These are all factors that will influence the fee that you can charge as a property sourcer.

Property Investment Tips In 2016

Rob Jones Answers Your Questions About Investing In Property

  1. Should I Use My Deposit to Buy One House or Two?
  2. Do Estate Agents Have Any Secrets?
  3. What Kind of Contracts do Property Sourcers Need to Use?
  4. Property Sourcing | What Should My Finder Fee Be?
  5. What Qualifies as a Quality Property Sourcing Deal?
  6. What Is The Best Way To Work Out Rental Demand?
  7. How Do I Go About Raising Property Investment Finance?
  8. There Are Lots Of Properties On The Market – Is This Good Or Bad?
  9. Is Investing in Property with only £20,000 Realistic?
  10. What Are The Property Growth Areas Of Manchester?
  11. How Do I Find Repossessed Property To Buy in London?
  12. Should I Invest In South Manchester Or The City Centre?
  13. How Do I Evict A Tenant? (Section 8 Notice to Quit)
  14. How Can I Buy a House Without a Mortgage?
  15. What Exactly Is Property Due Diligence?

2. Knowing your Investor

There are standard fees in property sourcing industry that range from about one to five thousand pounds but you need to understand the requirements of your investor. So if you’re new to property sourcing the first step is to try to understand the type of investor you’re going to find properties for.

3. Finding Your Niche

find your niche in to provide a quality property sourcing deal

So you have to choose your focus. Maybe it’s buy-to-let properties, maybe HMOs (houses of multiple occupation), or maybe it’s social housing, flat conversions, developments, whatever it might be. Pick a niche and then focus on that when you are sourcing properties. Different deals will give you different levels of payment. So, you may be able to charge slightly more for development properties, if there’s more profit to be made in that deal for an incoming investor, than you could if it was a straight-forward vanilla, buy-to-let, with only a small discount and an average rental yield.

As well as thinking in terms of your fee you should also be considering the requirements that you are looking to fulfil on your property deals. So, maybe having a particular type of rental yield that you are looking for. Let’s take for example vanilla buy-to-let’s, which as I’ve said is a fairly weak niche for sourcing clients – they carry around eight percent plus, rental yields.

4. Think Discounts

You must consider discounts. Most properties that we source for our clients have around ten to fifteen percent discount included in the deal. Some are slightly more, some slightly less depending on the type of property.

For example, say you have a ready to go house of multiple occupation with a very high rental yield. Or, let’s say you have a social housing type of property where it’s got five-year lease agreements with guaranteed rents. No void periods, no arrears, no maintenance… again, a good return. These properties will probably have less discount attached as they’re better value properties and there’s potential for growth over time. The location is also a factor in all of this. To find the right property you need to be sourcing in the right location.

5. Putting It All Together Into a Quality Property Sourcing Deal

As a property sourcer, it’s good to have criteria to follow when you source properties and craft the deal. This will help you match the clients with what you’ve put together. Hopefully, that gives you an indication as to what makes up a quality deal… the type of deal, the location, the yield, the discount, the elements we’ve discussed. In terms of the level of work you put in, that’s up to you. If you want you can simply provide property investors with a lead, an inquiry, some access to a potential homeowner.

But there are very few investors who’d want that…

Usually, property investors will prefer a fully packaged deal. So, in terms of the quality of your work, you might be in a better position, in terms of your fee as a property sourcer, if you did a lot more legwork on those deals when you get them agreed. Get them agreed under contract when you’re dealing directly with the seller and make sure you’ve an offer agreed with an estate agent if you’re dealing with estate agents. Then look to sell those deals to investors as more progressed deals. It’s by doing this you’ll be able to adjust your finder’s fee as a property sourcer.

6. Our VIP Property Training

Yes, we offer in depth property training that includes a lot of information about property sourcing bundled in with about seven or eight other property investment strategies that we cover. You can try our content for just £9.99 for one week’s access to see if our course is right for you.

7. Join Our FREE Online Property Investment Training Today

Thank you for watching this video. If you like this content and would like to join our free online property training course we’ve got a link for it on this page. In there we cover a range of different property strategies to help you get started on building a long-term property portfolio or creating a cash flowing property business. We also look at ways to increase your return on investment with any of the properties you may be considering and we also have a couple of cheat sheets and downloadable documents. Simply click on the image below to join the free training course today.

You can also visit our Facebook page or there’s our YouTube Channel where we’re posting weekly property investment tips.

If you have any questions or want to share your own property sourcing strategies then please post your thoughts in the comments section. We’d love to hear from you so why not get in touch..?

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