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  • Property-a-holics

    So I thought I'd be property broker / sourcer

    Firstly, great forum, excellent resources and sound advice throughout. I've lurked on here on and off over the last few weeks trying to learn as much as possible. I used to be an estate agent for eight years working for both the corporates and independent agents, together with a little property management. I've been a branch manager and a lister/valuer. I've also previously rented out my own property and have therefore some experience in property, or I'd like to think I have! I've also have lots of experience in sales, both direct sales and FMCG.

    For the last five years following a messy and expensive divorce I've had absolutely nothing to do with estate agency or property and went off in a different direction completely, sadly it hasn't worked out and I am, not to be too blunt, flat broke with a rubbish credit rating where I'd doubt the bank would lend me a pen yet alone any money! So, I thought long and hard and digged about on the internet and thought, I know, I'll combine my property experience and my sales experience and get back into the property game for myself as a broker! I figured I'd find investment property for sale and pass the deal on for a fee, simple in theory. I built a website, placed some adverts, sorted a Linked In profile and a Twitter account in order to build my network. I've contacted all the big "property for cash" companies and sourced other investors all of whom said yes, they'd be delighted to work with me and pay me a fee for suitably introduced properties.

    I've had a good few enquiries but ultimately, whilst they all want to sell quickly they are not "motivated" to sell at a low enough price to be of any interest to my buyers! Now, to make matters worse I'm concerned that I'm probably trading outside of the correct legislative protocol! Having read all the threads on here about needing to be a member of the property ombudsman scheme and needing indemnity insurance etc. it has quite frankly scared me off the whole idea. I would happily join the scheme and take out insurance etc. but I am starting from ground zero, with zilch, no money and right now the fee for joining the ombudsman scheme would be better used paying bills! Once that first elusive deal came in then I'd gladly jump through all of the hoops as I could afford it. All I have right now is my own experience and skills. There are rucks of so called property mentors and trainers all willing to teach me but frankly the cost is way out of my reach at the moment and I'm not convinced they'd show me anything that I don't already know?

    I guess the question I am really asking is how do you start off in the property sourcing game from scratch? Should I just sell leads, would that keep me the right side of the law? If so, how much for? l think my website needs a complete makeover as although it's not intended to be misleading, it clearly generates enquiries, but not the sort that would interest investment buyers who all seem to be after the elusive 20-30% BMV deal! Lastly, I should point out that whilst it would be nice to think of getting rich and building up my own property portfolio, if I'm honest I'd be quite happy just making a nice decent living just passing the deals on, as I like the whole sales and marketing thing, that's just the way I am. I pretty sure there are lots of guys like me who'd love to do something with property but being either skint or the wrong side of 40 don't know where to begin. Advice and comments appreciated! :-)
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    (13-01-2014 01:47 PM)Steven Baxter Wrote:  Having read all the threads on here about needing to be a member of the property ombudsman scheme and needing indemnity insurance etc. it has quite frankly scared me off the whole idea. I would happily join the scheme and take out insurance etc. but I am starting from ground zero, with zilch, no money and right now the fee for joining the ombudsman scheme would be better used paying bills! Once that first elusive deal came in then I'd gladly jump through all of the hoops as I could afford it.

    With your experience, your probably going down a good path, so as you say don't look to waste money on mentoring as you've already done it having been an agent in the past.

    If the above quoted is your only issue, the cost is probably less than £1000.

    If it was me, I'd work nightshifts in a warehouse for a month, that should pay the ombudsman fee etc.

    Short term pain, long term gain, no shame being skint, I've certainly been there and did the warehouse job as suggested!

    Just food for thought, but a simple solution to your only obstacle!
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    How about buying some books from those that do it on the ground and see how they did it. They are inexpensive, a great way to learn if you're a reader.

    Next step, try a few property meetings and start to meet people. See who is willing to give advice, who's just pitching a product/service. Figure out a few people that you'd like to work with. After a few meets in your local area, you'll soon start to feel comfortable in the surroundings and the people.
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    As far as I am aware (& according to RICS) if you specialise in commercial property (that should include BTL) then this area is unregulated and should not require the high entrance costs of regulation.

    In any-case, it's easier to ask forgiveness than it is to get permission.
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    How much is the cost for regulation of EAs/Sourcers out of interest?
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    PI Insurance can vary so best speak with a broker on that score.

    TPO - Property Ombudsman Membership is under £200

    Data Protection Licence is £35 per branch

    I'm not sure why these costs should be a barrier to entry for anyone considering sourcing as a full time career. Your ongoing marketing is a far bigger cost than start up

    You may have to decide on your 'entity' to operate ie. sole trader, ltd. co. so there may be a cost there
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    Just out of interest How much would your start up costs be , in your opinion that is?.

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    Thanks Mark,

    Thought it was a nominal amount like that.

    Can't see any reason people would avoid for the sake of a few hundred quid.

    As that's confirmed, Steven - my original advice stands, a few warehouse shifts from a temp agency would cover that minimal cost, then you can crack on and start the real work...
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    no worries

    Think your advice might be the best there.

    We overpay for our PI Insurance but, John Cox (host of the Bucks Meet) runs Insurance Desk Services - you'll get it cheaper from him than we pay
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    Hi Steven,

    Welcome to PT and well done for your attitude and desire to "do the right thing".

    First of all, anyone who introduces another party to a property deal is deemed an introducer and should be a member of a Property Ombudsman scheme. (There are two to choose from).

    In a largely unregulated arena, this is a massive plus to have this as it shows you are committed to professional standards and also that your clients have a route of redress if something goes wrong.

    To my mind that is a small price to pay to differentiate yourself from the sharks!

    You may also get some value from this thread:

    Deal sourcing fees

    Mark Ianson wrote a post on how to become an expert on your property patch.

    Mark's book "Dominate your Ground" is also well regarded although I have not read it myself.

    Hope these links help fill in the picture?

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    Thanks for all of the sound advice. The warehouse work tip duly noted :-) I do have another "day" job and do envisage being able to sort the fees for the required ombudsman scheme at some point. I'm still unsure as to what to do with the "leads" as I get them however and what the "correct" procedure is?

    Presently my site generates enquiries and I call the enquirer back and establish the type of property, outstanding mortgage and if there are any other secured loans on the property, how long/or if they are presently on the market, whether they are contracted to an agent etc. If necessary I'll make an appointment to see them and explain how the service I offer works. I am totally transparent and explain I am acting as a broker or middleman and that I will offer their property to my client buyers for consideration. I explain also, that my fee comes from the buyer if a sale results and not them.

    Once I have all of the required information I'll email my investor/property buying contacts and if they are interested I'll pass on the address in order that they can carry out their own due diligence on the property. I don't get them to sign anything at this stage and planned on getting them to sign an agreement that basically states I have introduced them to the property and that my fee is 1% or a minimum of £1000 (whichever is greater) once we were agreed in principal. Am I being realistic here? I'm clearly reliant on trust and work on the principal that if a buyer were to circumvent me that I would simply have to take it on the chin and never introduce anything to them again. Simple karma really.

    Is 1% excessive or not enough? As it stands right now my site seems to generate enquiries but as I previously mentioned they all seem to be conventional sellers? I realise that my site is probably giving out the wrong message and therefore needs a bit of a re-work, but it seems such a shame that these leads are of no use? I wonder if there are buyers who are not investors but maybe conventional buyers looking for a bargain, maybe not a massive one but discounted never the less. Could I charge these buyers a fee, albeit a reduced one? Sorry, lot's of questions!

    With regards to books on the subject of property sourcing, I've read a few online e-books but struggled to find any titles on the subject in mainstream book shops. Where can I find books on this subject? Lastly, I'm more than happy to attend networking meetings but don't know how to find them? I'm aware of the "get rich type, buy a house for pound" style meetings, but that's not my scene to be honest. Anybody know of any good networking/property meets in Gloucestershire? Thanks in advance Smile
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