In this series of articles I want to share the benefits of the most popular creative property strategies. For balance I will also share the potential issues and who the strategy is suited to. So let's dive into the world of 'Property Sourcing'.
Property Sourcing is essentially you finding a property for another person (investor). The property and area are analysed and if it ticks all the boxes and stacks up as a viable investment opportunity you may have a 'deal' to sell.
The property is usually exclusive and not available on the open market. If the investor purchases the property, you generate a fee, known as a sourcing fee or finders fee.
So Why Is Sourcing So Attractive?
The fee generated from sourcing can be substantial, especially when you do multiple deals per month, or per year. On average you could expect to earn between £3,000 and £5,000 per property you source, package and sell.
Sourcing fees are typically 2% of the purchase price as a rough guide so work out what that might be on houses where you live to give you an idea.
Do You Want to Invest In Property But Don't Yet Have The Funds?
A lot of people have an interest in property and love watching property tv programmes like 'Homes Under The Hammer' and 'Location Location Location'.
But not everybody has the money to get involved in property themselves.
That's where property sourcing could be a good fit. But I'm not just talking about the obvious financial benefits of sourcing. I want to talk about the skills you will learn.
A huge part of sourcing and packaging a property deal is about working out if a property is a good investment or not.
Can you add value? Is it a good location? What sort of return would an investor get? Do the numbers work?
All this analysis and homework you do when sourcing is massively useful to you!
Let's fast forward a little... So you have sourced and sold a few deals and now you finally have some money to invest in a property or project of your own.
All those skills you learned sourcing for others will now come into use. You now know how to find the properties, how to crunch the numbers, how to look at all the property data and work out what is and what is not a potential property investment.
So I always advise people looking to get involved in property to consider 'property sourcing' as a way to get started on their own path in property.
OK I Get The Benefits What Else Should I Know?
Well I am a big advocate of transparency, I don't want to just share all the positives. So here we go...
Some people watch YouTube videos and get sucked into the whole becoming financially free message that a lot of these 'property guru types' talk about.
The big issue is - a lot of these videos and seminars and webinars these guru types put out there make property strategies sound so easy.
They give you the highlights and the income and they focus on the benefits only. So some people assume that certain property strategies (sourcing is just one of them) are really quite easy.
They assume that money will also be easy to generate and that they will be financially free in a short spell of time. This is the message that most guru types regurgitate. The sad thing is it attracts the wrong type of person who is always looking for a shiny penny and quick route to riches.
This type of content online is mostly misleading in my opinion and gives people the wrong impression, a false impression that only really serves the guru types in their quest to sell courses at silly prices.
So Is Sourcing Something Anybody Can Do?
Again I want to be completely honest with you? No it's not for everyone.
Property Sourcing is a skill that can be learned for sure. However, Not everybody is suited to being a sourcer. So who is it for? Who does it suit?
Anybody who can learn and is willing to be pro-active and most of all be consistent with their efforts... these types of people are the ones that are successful. I bet your not shocked!
Newsflash there is no secret to success - it's boring but it's a simple case of being active and consistent and doing the right things.
You should also be a good communicator and be organised as a rule.
If you approach sourcing as a business opportunity that you can start in your spare time and scale it up over time, to eventually lead you to a better position. Then that's much better than assuming it's a get rich quick kind of a business.
My advice is see it as a real opportunity to get started in property, to build a pot of money that will open up other doors such as; investing yourself and getting involved in your own projects.
How Much Can I Really Earn Sourcing?
If we averaged it out to £3,000 per property you source and trade then it's a numbers game. How many can you source and sell in a year?
5 deals would give you £15,000
10 deals would give you £30,000
15 deals would give you £45,000
The next question is what is achievable?
Ultimately it can take time for newbies to property to learn the process and skills and to confidently take action. Some people do learn quicker, some slower but on average, in terms of what is do-able... I would say between 5 and 10 in your first 12 months is achievable for most people.
Some will do more, some less but I'm trying to give you an idea of what the income could look like without being unrealistic.
Gurus will say on YouTube you can generate 6 figures and this is true, but not in year one.
I want to be more realistic and accept there is a period where you will be learning, a period of finding your feet and then you will hit your stride making contacts and generating business and income.
I Want to Start Sourcing What Can I Do?
We put together some free training that will give you the full process and some free PDF's too which might be useful for you.
You can find that here: https://psnproperty.com/optin1615984250597
Or you can check out our online store for affordable property training. We offer online courses that you can do in your own time and our sourcing course comes with all the contracts and step by step knowledge you will need to start your sourcing business.