3 Reasons Why You Should Start Deal Sourcing

There seem to be plenty of beginner-friendly suggestions online. The problem? How do you separate the fakes and liars from the rest? Here's a suggestion: If someone guarantees you financial freedom through their strategy within a few months, you should probably take your spreadsheets and run in the opposite direction. The property industry is littered with such people, so here's a blog to bring some clarity. Here you'll see why you should start deal sourcing if you've just started in property.

DISCLAIMER: You CAN become financially free using this strategy, but it will probably take you more than just a few months, and it will be harder than you think.

There are plenty of benefits starting with this method. To save you time, I’m just going to list my 3 favourite benefits of starting with this strategy above any other. If you want to learn more, be sure to have a look into my ebook on the topic: Deal packaging ebook. I’m also assuming here that you know what deal sourcing is. If you don’t, I’ve written a blog just for you.

You can find it here: The Best Way To Start Property Investing In 2022.

So without any further hold-ups, here are the 3 main benefits of being a deal sourcer.

First of all, don't let anyone fool you into thinking that you can do deal sourcing for free. Despite what you've heard at the latest property dance seminar, you will ALWAYS need some capital to get started in property. Now, that capital may not be your own capital. You could borrow from friends or other investors, but that's a different story.

Still, you need relatively little capital to get started. Here's what you should factor into your initial costs:

Compliance and insurance. This may cost you anywhere from £500-£2000 depending on how watertight you want your compliance and policies to be.

Business overheads such as website costs, sourcing software, LinkedIn premium, direct to vendor marketing etc.

Fuel. Who did you think was going to pay for all that traveling to and from property viewings?

That being said. If you're serious about getting into property you'll either have to pay these costs or start paying for deposits, legal fees, and refurbs to do another strategy. You do the maths on what the cheapest alternative is. Here’s a guide to help you:

Deal sourcing is clearly much cheaper to get into than any other property strategy.

If you're considering deal sourcing right now, then this benefit should appeal to you.

The truth is: When sourcing deals for other investors, YOU are the one doing the majority of the work. Think about it, you have to:

Spend hours looking for deals online Spend hours building relationships with estate agents

Spend hours on marketing campaigns to find investment opportunities directly from vendors

Spend hours finding the right investors and vetting them

Spend hours analysing deals and viewing properties

And if you're managing the refurb as well, you'll have to spend hours doing that too.

Besides, some people forget that you actually have to package up the deal as well. You can't just throw some figures on a curled-up piece of paper and go Bob's your uncle? No, that doesn't work here. To have any of your deals sold, you need to spend some hours presenting the deals to investors as well. Remember, you operate similar to a glorified estate agent. Here’s my deal packaging ebook that explains the process: Ebook.

Those are a lot of hours. If this sounds daunting, you should know that it does get easier over time. As with any business, you can outsource all of these tasks and run a reasonably hands-off operation after some time.

See my Youtube video to see if you’ve got the skills to run a deal sourcing business:

The good thing is that all of these hours mean an incredible amount of learning. You'll learn more doing this than through any other strategy because you can be involved with so many of the property aspects. Quite frankly, you will need to learn, because oftentimes, you as the sourcer will be the expert, rather than the investor.

And please don’t get me started on agents. Most have very limited knowledge on property investing!

Imagine the following scenario. 

You've run your sourcing company for 6-9 months. You've been through the trenches; hours of viewings, rejections, frustration, and difficult conversations with investors. But then you look at what you've built and you see that over this period of time you've replaced the income from your job (by quite a margin), you've learned property inside and out, agents are now coming to you with more deals than you know what to do with, and investors are queuing up to buy property deals from you.

This is the reality for deal sourcers who do their job well. Your business starts running itself because of the reputation you've built. 

Now imagine what would happen when you have the capital to build your own property portfolio. You will bypass many of the struggles other investors go through because you've already built a reputation. Agents trust you and you've probably found a few investors willing to lend you money or potential joint venture partners. You'll now have access to many more opportunities than you would have otherwise. 

Not to mention all the systems you build up. If you want a head start you can get some of the systems I personally use in my own property business: Get my systems to skip the boring admin work.

With all the benefits, you're bound to get some negatives too. Let's be honest. Deal sourcing isn't for everyone. It requires a lot of stress and hard work. So I'll say it now: If you're too lazy, you better turn the other way and jog on. If you're willing to put in the work, then great. But make sure you know what you're doing first. Get educated, by reading books and consuming any information you can find online. Here’s a resource that helps you get started with only one property investment book.

Deal sourcing is becoming more regulated and if you are responsible for selling bad deals to investors, you will be held accountable. Make sure you have the right compliance in place. There are potential fines for being non-compliant, that far exceed what you would pay for your first property investment. So if you receive one of these, it defeats the purpose of starting deal sourcing in the first place.

I have linked to my book above, where you will understand everything you need to know about analysing and finding the right deals. If you want to learn more about how to set up your deal sourcing business I recommend my deal packaging ebook, which you can get here: https://www.tej-talks.com/ebooks

The reason I recommend this method is that it has such a low barrier to entry. Pretty much anyone with a few thousand quid and the right mentality can get started with deal sourcing. The longer you are in it, the more you learn and the more you can apply this knowledge to scale your own property portfolio.

Deal sourcing allows you to get a solid understanding of property while replacing your day job at the same time. Yes, there are costs involved with deal sourcing, but if done correctly, they are minimal and will pay off in the long run.

It also gives you an opportunity to be hands-on with your market and to spot new opportunities before everyone else. Once you have built your sourcing business and have enough capital to buy your own properties, you could keep the best deals for yourself while sourcing out the rest to your network of investors.

Done right, sourcing can bring you a consistent cash flow every single month. Done poorly, you may very well be red-listed and left with a constant uphill battle.

So make sure you do it right!

Make sure to read my book on Amazon to learn exactly how you can start finding these deals yourself here: Guide To Property Investing.

Then join the property event to find loads of investors just dying to invest with a fantastic deal sourcer here: The Property Event.