How to Become a Property Sourcer
So, you want to become a property sourcer? In this piece, we will go over the 4 steps that you need to take to become a property sourcer.
These steps can be broken down into registration, starting a business and finding investors. To become a property sourcer you should be aware that many clients,investors and just general customers want to work with property sourcers that have a background in the property industry.
If you can, gain as much knowledge and experience as you can working in property before becoming a property sourcer.
This may help you gain a better understanding of the industry and may help you in the long term. If you are unable to get practical experience, start by researching the investment market. Become familiar with the terms used and how the market works.
This may give you the chance to get a little ahead of the game, if the competitive gene runs in your DNA.
If you are not keen on doing research then consider your educational background and think how your previous experiences could be useful.
However, On that note….
Having experience is not compulsory as anyone can become a property sourcer, but having experience may give you a nice foundation.
Without further ado let’s get started.
What is a property sourcer?
Before we look at what you need to do. Let’s take a look at its meaning. A property sourcer is someone who scouts locations to find the best property deals to sell to an investor.
The sourcer and the investor will then agree on a contract. But the sourcer is the one that typically finds the properties in the first place.
You can search for the properties online or visit real locations.
The role of a property sourcer will always be concerned about finding the property that is best suited to the investor, that’s your game plan and top tip.
However, one of your primary goals is to find properties.
This will be your top tip when working as a property sourcer. All of your findings have to be aligned with the investor’s strategy.
1. Registering as a property sourcer
You will first need to register with a property ombudsman scheme. There are three types and you have to register with at least one of them. The other two include Ombudsman services and the property redress scheme.
The property Ombudsman scheme allows a customer to raise a complaint about your service.
On a side note, If you want to start a property sourcing business, then you will have to read the requirements under the Estate Agents Act.
However, registering with at least one of the schemes mentioned above is important because it is the minimum legal requirement when working in property.. Other areas to consider are the following;
- Being registered with the HM revenue and customs.
- Information commissions officer. You will have to register with them because when securing deals you will be holding personal customer information. It puts you in charge over your customers’ information.
- National Residential Landlords Association. Although, this is not a legal requirement. It may help. It provides access to several departments that all deal in property. I recommend this step in terms of building connections.
- Apply to the Financial Conduct Authority. This service aims to regulate all financial activities between you and the consumer. You can register online.
- Data protection. This determines how your personal information is used by other organisations. This also includes businesses and the government. You want to know that your information is in good hands, so this is a highly recommended step to take when becoming a property sourcer.
All of these documents are necessities and you will be able to fill out each form online on their site.
Work through each document carefully and read the terms of agreement. This is the part that you really don’t want to get wrong.
And you may have to devote some time over this, but you will get there. One sip of coffee and a biscuit to help you along the way will do the trick. Trust me, I have experience.
2.Setting up a business in property sourcing
The next part of becoming a property sourcer is identifying how you want to work. Whatever one you go for, it’s important to note that this role requires full time hours.
This position isn’t well suited for a part time hustle. So, you might have to say goodbye to your job at Starbucks or wherever you might be.
You can now have a think about starting your business or joining an established property sourcing business.
Before starting out, all newcomers should ask themselves the following questions: do you want to start a property sourcing business or do you want to source properties yourself?
You can source properties yourself with your own funds. Or start or join a business.
Naturally, there will be less risk when joining a property sourcing business.
However, there is still a difference between the two. Lets just say, you want to start a property sourcing business.
Once you have registered in the HM revenue and customs department, you need to first know what type of business structure you want to form. Here is a recap of some of the business terminology that you will need to know:
- public liability
If you studied business at school or college, you may have heard of these terms before. But Just in case if you didnt study them or perhaps you just weren’t paying attention, then do a little research.
All of these have their benefits and drawbacks, there is no right or wrong answer. However, the more popular option has been to run as a limited liability company in property sourcing.
But still make sure to do some research on this and find an option that best suits you and your structure.
Property sourcers will choose a structure that best compliments how they work. The more control you feel you have, the better.
The next part of the business is to find an area or a specific quality to properties that you may want to focus on.
Some property sourcing companies may focus all of their attention on properties in a specific location. This is known as building your niche and it can give you a solid identity on the competitive web.
It can also make your work efforts more tailored and may save you a lot of time from focusing on several different locations.
You now would need to think about marketing your business. This next step (step 3) is going to help you with that.
3.Finding Investors in property sourcing
Once the paperwork and business structure has been sorted. Your attention should be shifted towards actually finding investors.
You can spend hours on finding the right properties, but you need investors to start and secure the whole deal. Luckily, you will be able to find investors online.
This part can be overwhelming, which is why several start by searching for social media pages and forum groups.
The two websites that property sourcers use to find investors are Facebook and Linkedin. Once you land on these sites, search in the forum section.
Here, you will be able to make contacts and start conversations. This is the beginning process of building your network and developing your reputation as a business.
These channels will also allow you to market your business by getting more conversations going which hopefully results in more leads.
An even better scenario would be to attend local networking events. Although, you can get good clients through online messaging, nothing beats the real thing.
4. Negotiating as a Property sourcer
Don’t you just love it when a plan comes together, well me too.
We all want to be the best negotiator and as a property sourcer, it will become a daily practice that you will hopefully get comfortable with.
Once you start getting a bit of confidence in communicating with people. The next part is all about learning what goes into a good negotiation, as this will be the building blocks to securing your deal.
This stage can take a little more intelligence. It’s a skill that can be hard to practice everyday. Some of the basic requirements of effective negotiating include, understanding the value of your chosen property and marketing it accordingly.
Both of these steps take time to plan thoroughly, but time is on your side. Don’t rush this part.
Grab a pen and paper, and maybe make a list of the properties key assets. Remember, with negotiating, you want to approach the discussion with as much confidence and security as possible.
Planning out the pre-production of this is going to be valuable. One of the next stages to negotiating, is getting the price right.
This is also to do with the reputation you want to build with your network. You really don’t want to rip people off.
When you have read the 4 steps, these short tips below will help guide you.
- Consider doing your research about the role and the investment market.
- Consider how you want to work. Whether that be as a business owner or joining a company.
- As a business owner, choose the right structure and business plan.
- Get registered with one of the schemes.
- Start building your investors network. Get comfortable with negotiating.
- Start searching for properties.
Good luck and remember, take your time with each step.