Property deal sourcing is becoming increasingly popular in the UK right now, and for good reason.
Over the past years alone, properties across all key UK regions have seen a healthy rate of capital appreciation, with some areas seeing as much as 50% increases in value. Coupled with average UK buy-to-let rental yields of between 5 and 8%, now’s a prime time to venture into property investment.
Whether you’re looking to build your own portfolio or you’d like to act on behalf of others (clients), this guide will explain how to get started with property deal sourcing.
What is property deal sourcing?
Property deal sourcing is the strategic process of finding potentially lucrative investments that you usually won’t see listed in the open market.
The best property sourcers can connect with potential investments that are not only hidden from the open market, but are also below market value.
The main goal of property deal sourcing is to find properties with potential and leverage these investments to create a healthy profit.
Here’s how you can make a profit as a property deal sourcer:
Renovate a property and flip it for a profit
Become a buy-to-let landlord and rent your property to reliable tenants
Set your property up and a house of multiple occupancy (HMO) Let your property to commercial tenants
Deal sourcers hunt for properties that suit their investment goals, needs or budget. They’re creative and have methods for uncovering investment properties that are undervalued and less visible on third-party platforms.
Read: Alternatives to Right Move Plus for property investors
PROPERTY DEAL SOURCING: WHAT YOU NEED TO KNOW TO GET STARTED
You don’t need formal qualifications to start sourcing property deals, but you do need a working knowledge of the property market.
To get started as a deal sourcer, here are the key areas you should focus on:
Get to grips with the UK property market
Keeping up with the latest UK property trends and market news will help you get ahead when sourcing potential deals.
Taking the time to understand the property investment process and the available investment options will also give your property sourcing efforts direction, helping you connect with the best deals for your needs as a result.
Learn the fundamentals of property investment, stay in the loop by reading relevant publications or following trusted industry professionals – and you’ll increase your chances of success.
Network regularly to expand your deal sourcing potential
Sharpening your network skills will help you sprint out of the blocks faster as a property deal sourcer.
Take the time to attend virtual and in-person networking events, join relevant online networking groups or forums, and chat with other property specialists or investors.
Doing so will accelerate your learning and lead you to off-market deals with high-profit potential.
Arrange your finances and know your options
If you’re sourcing deals for yourself, acquiring enough capital to start sourcing and security investments is essential.
I recommend achieving or acquiring a starting budget of £50,000 as this will give you the capital to pay a mortgage deposit (of up to 20%) on your first property deal while covering associated costs, including stamp duty and legal costs.
You should also understand which mortgage deals best suit your needs and understand concepts, including bridge financing, to accelerate the growth of your portfolio.
Tip: If you’re ready to start sourcing property deals, discover our choice of off-market investment opportunities, many of which are available for 15 to 20% below market value.
