How To Become a Property Sourcer
There is a continuous ‘boom’ in the property market with “property sourcers” but being a property sourcer is so much more than just finding a BMV property and selling it to an investor and taking a finder’s fee. In this guide we will break down exactly what a property sourcer does and the essential information you need for becoming one.
What Is a Property Sourcer?
A property sourcer is essentially the middle person in a property deal “much like an estate agent”. Through whatever method you have used to acquire a property, which you feel an investor is willing buy, you then sell the deal to the investor. However, there are ways which we will discuss to actually make this a legitimate and sustainable business.
Being a property sourcer is usually the most common way that people try to start in the property investment world. It makes a lot of sense especially when all the people selling property courses have the same story about that is the way they started, and you can do it without any money. However, even though it is true it is a good way to get started in property for what is a very low cost in the property world it is definitely a strategy which is easier said than done.
Property Investing With No Money Or None Of Your Own Money
Yes, in a perfect and ideal scenario someone comes to you wanting to sell their property for 40% BMV (which is what property gurus need for it to be a good deal btw) and you have an investor who completely trusts you and isn’t bothered about how credible you are, then yes you will not need money to do that. But if you are actually planning on having a sustainable business with property sourcing then you need to consider various factors before you can even get started.
- Built a credible reputation with your investors
- Be compliant with laws
- Have good relationship with your team (solicitors, broker, accountant, investors etc…)
- Investor welcome pack prepared
- Property presentation pack prepared
- A registered business
Considering these points, yes to everyone’s complete surprise, property deal sourcing and trading is not free to do. To just briefly cover these areas, we provide more detail in the What property experts don’t tell you blog, and we provide everything you need in the essential documents pack eBook, the most important part is the compliance. There are four essential qualifications you must have including:
- Registration with the property redress scheme
- Professional indemnity insurance
- Anti-money Laundering (AML) registration
- Data-protection supervision
The total cost of compliance typically falls between £1,500–£2,000. While this isn’t an extreme amount in the context of running a business, for someone just starting out and unsure of how quickly they’ll see success, it can feel like a significant upfront investment. On top of that, marketing costs, although essential for growth later down the line, will initially be an expense rather than an immediate return. It’s important to be prepared for these early costs and factor them into your planning when starting your property sourcing journey.
What Skills You Need To Be a Property Sourcer
Like most jobs you will need to have, or quickly gain, specific skills to give you the best chance at having success. For property sourcing these skills are:
Negotiation skills- Negotiation is essential in all aspects of property, you will first need to negotiate the best price possible, that meets your criteria and is suitable for the seller, when securing the property deal. You will also need to negotiate with builders regarding the fees you add on to the costs for renovations. However, something that you should not negotiate on is your fees with the investor they are your set prices if they are not willing to pay that then they are no longer one of your investors. NEVER lower your price.
Market knowledge- An important part of working in property is knowing the areas where you are working, both for when you are understanding the prices that you can pay and still make money when adding value and for being able to educate your investors on as having confidence in your knowledge, they will feel comfortable investing with you.
Networking skills- As much as it pains us to actually agree with the property gurus on something, the saying “your network is your net worth” is actually true. Like any business, it is not what you know it is who you know, the more people you know the better access you will have. Although more importantly, the more people that know YOU, the more opportunities you will have without having to put any of the hard work in.
Marketing skills- Similarly to having networking skills, you need to have marketing skills to make sure that people know who you are. You will be really surprised how many opportunities you will be presented with just by people knowing what you do.
Due diligence skills- Following having knowledge of the market, you also need to know all the numbers involved in the whole deal from the refurb to legal fees to confidently ensure your investor that you actually have a good deal.