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July 18, 2023

The property sourcing business is a fast-paced and vibrant industry that is steeped in relationship building, negotiation, and market analysis.

It’s a sociable business, one where the interpersonal skills of communication and negotiation play a significant role. Whether you are an established property investor or new to the industry, the dynamics of property sourcing can significantly impact your investment portfolio’s returns.

What is Property Sourcing?

If you are new to the UK property market, the concept of property sourcing might sound foreign. In essence, property sourcing refers to the art of finding, analysing, and negotiating property deals for personal use or for selling them to investors. It’s an intricate process that entails understanding the local property market, demographics, local amenities, transportation, and average rental rates. All these factors and more inform the decision-making process, ensuring that a sourced property offers value and aligns with the investor’s objectives.

Property Sourcing Business

The Sociable Aspect of Property Sourcing

At its heart, property sourcing is a sociable business that involves networking and building relationships with various parties including homeowners, estate agents, and property investors. The process of sourcing requires understanding the needs of these different parties, translating them into actionable property deals. A property sourcer acts as a ‘go-between’, finding properties or lands that match an investor’s investment criteria and packaging the deal to suit the investor’s needs.

Property Sourcing Strategies

Property sourcing can take two different paths. The first strategy involves finding a deal, packaging it, and then selling it to an investor for a fee. The second approach begins by understanding the exact needs of the investor, sourcing a suitable property, and then selling the deal to the investor for a fee. Both strategies require a deep understanding of the property market and the specific needs of the investor, but the latter approach is often more straightforward to meet minimum standards required under certain regulations.

The Four-Stage Sourcing Process

The property sourcing business involves a four-stage sourcing process:

1. Investor Stage:

Here, the sourcer identifies an investor to work with, understands their investment strategy, and learns about the geographical areas they are interested in. This stage also involves securing a contract with the investor and conducting due diligence.

2. Sourcing Stage:

This stage involves generating seller, property, or land deal leads. The sourcer filters these leads based on their potential, arranges viewings, conducts due diligence, and makes offers.

3. Packaging Stage:

Once a property has been identified, the sourcer creates a professional report or brochure that includes all key elements of the deal. This report is sent to the investor, who then decides whether to proceed with the purchase.

4. Deal Monitoring and Progression Stage:

This final stage involves monitoring the purchase progress, liaising with solicitors and other professionals involved in the purchase process, ensuring the completion of the deal, and receiving the sourcing fee.

This structured approach provides a systematic way for property sourcers to operate in the industry, ensuring that each stage of the process is carefully managed and executed.

Why Property Sourcing?

Property sourcing, when done legally, compliantly, and ethically, can provide a lucrative source of income. It’s a fascinating area of the property investment sector that not only offers financial rewards but also opportunities for professional development and networking. With each successful deal, a property sourcer builds their reputation, gains more clientele, and makes more connections within the city, reinforcing their position within the industry.

If you’re entirely new to the property investment sector and don’t currently have enough cash to invest yourself, don’t worry. Many individuals have effectively used property sourcing as a route to build up a larger ‘cash pot’. In the process, they gain valuable knowledge and develop invaluable long-term relationships with experienced investors.

The Future of Property Sourcing Business

As the property market continues to evolve, so does the art of property sourcing. It’s a dynamic field that requires individuals to stay informed about market trends, regulatory changes, and the changing needs of property investors. And with the growing complexity and competitiveness of the UK property market, the demand for professional property sourcers is only set to increase.

There’s no question, that if you like people, this will be easier.  Property sourcing is a sociable business that presents numerous opportunities for those willing to invest the time and effort into understanding the industry. With a keen eye for detail, robust networking skills, and a knack for negotiation, you can make a successful career in the property sourcing business.

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Property Sourcing Business

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