In the property investment sector, the goal of the ‘sourcing’ process is to find a property or land that matches an investors, investment criteria.
A property sourcing agent is a ‘go-between’, a person who finds a property or land that meets an investors investment criteria, packages the deal, and upon completion of the purchase receives a fee for that service.
There are two different ways to Property Source
- Find a deal, package and sell to an investor – Get a fee
- Find an investor, understand exactly what they want, source it, sell – Get a fee
It is easier and simpler to meet minimum standards required under certain regulations if you find an investor first.
The Four Stage Sourcing process
Stage One – Investor
- Find an investor to work with
- Understand the strategy that they are looking for
- Know your patch – Geographical area they want to invest in
- Secure the investor – Contract
- Complete Due Diligence – Manual and Electronic procedure
- Commence sourcing
Stage Two – Sourcing
- Generate seller, property or land deal leads
- Filter leads based on potential
- Arrange viewings
- Carry out viewing
- Complete due diligence on the seller, property or land
- Make offers
Stage Three – ‘Packaging’
- Create a professional report/brochure for a deal
- Include all key elements of the deal
- Send report/brochure to investor
- Secure agreement to purchase
Stage Four – ‘Deal Monitoring and Progression’
- Monitoring the purchase progress – Liaising with solicitors and other professionals involved in purchase process.
- Completing the purchase of any ‘deal’
- Ensuring sourcing fee paid
“Property sourcing when done legally, compliantly and ethically, can provide a lucrative source of income“
If you’re completely new to the property investment sector and don’t currently have enough cash to invest yourself, don’t worry – many before have used have used sourcing effectively as a route to build up a larger ‘cash pot’.
They’ve also gained valuable knowledge along the way and developed invaluable long-term relationships with experienced investors.
Our training partner, Property Sourcing Compliance (PSC) provides a short and insightful introduction course into Property Sourcing so you can assess whether this is the right route for you before investing time and money into a new venture.
We also have a Hub post on the cost of setting up your business – make sure to check it out here.