COMPLETE A-Z GUIDE TO DEAL SOURCING

Introduction

This tutorial serves as a comprehensive guide to sourcing and selling your first property deal, drawing insights from the Fontaine Brothers' complete A-Z guide. Whether you are new to property sourcing or looking to refine your skills, this step-by-step approach will equip you with the necessary knowledge to successfully navigate the deal sourcing process.

Step 1: Set Up Your Company and Ensure Compliance

1. Choose a Business Structure

   • Register your company through the government website or use a third-party service like Companies Made Simple.
   • If privacy is a concern, consider using a third-party company's address for registration.

2. Open a Business Bank Account

   • Select a bank that suits your business needs.

3. Establish an Online Presence

   • Purchase a domain name for professional emails.
   • Consider creating a simple website; however, don't spend excessive time or resources on branding elements like logos initially.

4. Ensure Compliance

   • Obtain necessary insurances:
     • Public Liability Insurance
     • Professional Indemnity Insurance
   • Register with the Information Commissioner’s Office (ICO).
   • Join a property redress scheme (e.g., TPO or PRS).
   • Register with HMRC for anti-money laundering compliance.

Step 2: Identify Your Area and Strategy

1. Select Your Target Area

   • Choose an area you are familiar with to leverage your local knowledge.
   • Identify the characteristics of the area to determine suitable investment strategies.

2. Avoid Problematic Areas

   • Stay clear of neighborhoods that show signs of neglect or crime.
   • Look for areas that are not overly affluent, as high-end properties may not provide good investment returns.

3. Define Your Investment Strategy

   • Focus on a specific strategy (e.g., buy-refurbish-refinance, rent-to-rent) that aligns with your area’s characteristics.
   • Avoid being a generalist; specialize to become the go-to person for your chosen strategy.

Step 3: Find and Analyze Property Deals

1. Use Online Tools

   • Utilize platforms like Rightmove and Property Log to find potential deals.
   • Filter properties based on your target criteria (e.g., price, number of bedrooms).

2. Conduct Comparative Market Analysis

   • Identify at least three comparable properties (comps) that have recently sold in the area to gauge the property's potential value.
   • Consider factors such as size, location, and condition.

3. Estimate Refurbishment Costs

   • Get a builder to provide a quote for the necessary renovations.
   • You can also develop a relationship with builders to improve your efficiency in sourcing quotes.

4. Utilize a Deal Analyzer

   • Input all gathered data (purchase price, refurb costs, rental value) into a deal analyzer to assess the viability of the deal.

Step 4: Secure the Deal and Find Investors

1. Make Offers Strategically

   • Instead of making a direct offer, use a technique called "offering without offering" to gauge the seller's openness to negotiation.
   • Phrase your inquiries to avoid offending the seller while still investigating potential price reductions.

2. Build Your Investor List

   • Use social media to promote your services and connect with potential investors.
   • Consider creating a WhatsApp group for real-time communication about available deals.

3. Market Your Deals

   • Send out teasers and detailed information about the deal to your investor list.
   • Engage with interested investors quickly and answer any queries they may have.

Step 5: Navigate the Sale Process

1. Prepare for Closing

   • Once a deal is secured, send a reservation form to the investor and collect a portion of the sourcing fee upfront.
   • Conduct necessary anti-money laundering checks and gather required documentation.

2. Manage the Conveyancing Process

   • Maintain communication with solicitors to monitor the progress of the sale.
   • Ensure that both parties' solicitors are connected and working collaboratively.

3. Final Steps

   • Once the deal is officially completed, invoice the investor for the remaining sourcing fee.
   • Celebrate your success and use this experience to enhance your reputation and expand your investor network.

Conclusion

Sourcing and selling property deals can be a lucrative venture if approached methodically. By setting up your business correctly, focusing on a specific area and strategy, thoroughly analyzing deals, and effectively marketing to investors, you can successfully navigate the complexities of property sourcing. As you gain experience, consider leveraging partnerships and community support to enhance your capabilities and growth in the field.