Deal Sourcing for Beginners

This blog is all about deal sourcing for beginners. So what is deal sourcing? Well very simply, it’s about finding great property deals, either for yourself, or to sell onto another investor for a fee. I am going share exactly what makes a great deal in this deal sourcing beginners guide.

One of the most important things you need to learn to be a successful investor, is how to find good property deals. So first of all, you need to know what makes a good property deal. Here are some criteria I want you to think about when looking for property deals.

Equity On Day One

It is great if you can get equity in the property on day one, the day you buy it, instead of just having to wait for the market to go up in value. This is done by purchasing from motivated sellers.

Let’s say you find a property that is worth £200k, but if you buy if from a motivated seller who needs speed and certainty, you could save tens of thousands of pounds off the purchase price. So, if we buy at a discount, you could buy a £200k property for say £170k, which means the day we buy, we get £30,000 of instant equity.

Just to be clear here I am not saying that you should always buy at a discount. Sometimes we will pay for full market price, I’ll explain why we might do that later on. But buying with equity on day one is always a good thing.

Buy In An Area of Strong Rental Demand

The next thing is, we want to make sure we buy a property in an area of strong rental demand. We want to be able to quickly and easily rent it out to new tenants if the current tenants move on.

“We only ever buy properties that have positive cash flow, if there is no cash flow then it is not a good deal.”

Buy Property With Strong Cash Flow

Linking to strong rental demand, we want to make sure we get cash flow from any property that we buy. What that means is, when we take the rental income each month and we pay all of the costs including; the mortgage, insurance, management fees, anything else, there must be some profit leftover. That’s what we call positive cash flow. We only ever buy properties that have positive cash flow, if there is no cash flow then it is not a good deal.

Buying A Property Where You Can Add Value

The next thing in terms of how to do deal sourcing, it’s great if we can buy a property where we can add value. If you buy a brand-new property, you can’t really add any value to that. If we buy an older property, then we can do things to increase the value. Maybe we can renovate it, we can put a new kitchen in, new bathroom, new carpets, and we can paint it. After this, what was a tired house suddenly becomes a desirable property again. Maybe we can extend it. Do a side extension, convert the garage into a room. Maybe we can extend the back, go into the attic. In some areas like in London it can be worth digging down into the basement, because space is at a real premium.

So what can we do to add value to the property? Sometimes, we might actually buy a property at full market price. Maybe it’s worth £200k and by spending £30k on it, the total cost to you would be£230k in total. But the value might be as high as£300k. So if we can add value to a property, there’s maybe a good reason why you might be happy to buy at the full market price. 

“Return on Investment is a comparison of how much does it generate for us every single year, compared to how much we have to put in to get that cash generating asset.”

Minimise How Much You Put In & Maximise The Return On Investment

The next thing you want to do is where possible, minimise the amount of money you have to put into the deal. That’s always good, because that means you can buy more deals.

Return on Investment is a comparison of how much it generates for us every single year, compared to how much we have to put in to get that cash generating asset. It’s a percentage. So we take the annual profit, divide by the initial investment, multiply that by 100 to give us a percentage. The higher the percentage, the better the deal is for us.I have written another blog on ‘How to Calculate Return On Investment if you want to find out more.

Does Your Deal Meet The Criteria?

When you are looking for great deals, you need to look for as many of the criteria as  you possibly can. You probably won’t get all of these criteria in one deal, but if you don’t find one which meets all of these criteria, you need to move really quickly. Because if it’s a great deal, and if you don’t buy it quickly, someone else who’s quicker will come in and snap it up. By educating yourself, learning what makes a great deal and moving quickly when you know you’ve got a great deal, then you’re going to be a more successful investor.

You should to pick an area sometimes called a ‘gold mine area’ you want to focus on. Typically, it should be close to where you live or where you work, because you’re going have a better understanding of which are the good areas, which are the not-so-good areas. But, if you have a local power team of professionals who can help you, then maybe you can infest further afield.

“By educating yourself, learning what makes a great deal and moving quickly when you know you’ve got a great deal, then you’re going to be a more successful investor.”

Most people starting to invest, should firstly look where they live or work. If the deals don’t stack up where you live, try looking in an area up to 45 minutes from where you live. Somewhere within that radius there’s going to be an area where deals stack up better.That’s the area to focus on.

I hope this blog on how to deal source properties has been useful. Please feel free to share it if you think it has helped you.

Join the UK’s Leading Property Investment Community

Want to stay ahead in the world of property investing? Get expert insights, tips, and updates delivered straight to your inbox. Be part of a thriving network of investors and take action towards your goals today!




Should You Sell in the 2025 UK Housing Market?
Should You Sell in the 2025 UK Housing Market?

I’m often asked by investors and homeowners alike, should you sell property UK 2025? With all the uncertainty in the UK property market 2025 and questions around house prices 2025 UK, it’s no surprise people are wondering is now a good time to sell property UK. In...

The Biggest Property Investing Mistake That Could Cost You Millions
The Biggest Property Investing Mistake That Could Cost You Millions

Over the past three decades, I’ve seen thousands of people start their property journey. Many of them share the same challenges, and most fall into the same traps. One of the most common property investing mistakes is looking only at the price of a property, without...

The Biggest Opportunity in the UK Property Market in the Last 30 Years
The Biggest Opportunity in the UK Property Market in the Last 30 Years

Right now, we are facing some of the most exciting UK property market opportunities 2025 has to offer, in fact, they may be the biggest I’ve seen in my 30 years of investing. Yet, despite the scale of this opportunity, most investors are going to completely miss it....

Property Market Crash: How to Profit When Others Lose
Property Market Crash: How to Profit When Others Lose

If you’ve been following the news lately, you’ve probably seen headlines warning about falling house prices, rising interest rates, and predictions of a looming UK property market crash. For many, that sounds like bad news. If you’re an investor or thinking of...

UK Housing Market 2025: What You’re Not Being Told
UK Housing Market 2025: What You’re Not Being Told

If you’ve been watching the news, scrolling through social media, or chatting with friends, you’ve probably heard the big question: “Is the UK housing market about to crash in 2025?” For some, the idea sparks panic. For others, it signals opportunity. In this blog,...

Why Property Investors Fail: 4 Mistakes That Cost Beginners in the UK
Why Property Investors Fail: 4 Mistakes That Cost Beginners in the UK

Property investing is one of the most powerful ways to build long-term wealth but many beginners still fail before they ever complete a deal. And no, it's not because of interest rates or house prices. After mentoring thousands of UK investors over the last two...

Should You Buy a Property That’s Vacant or Tenanted?
Should You Buy a Property That’s Vacant or Tenanted?

If you're looking to buy an investment property, you may come across listings described as “sold with a tenant in situ” or “vacant possession upon completion.” On the surface, buying a tenanted property might seem like a no-brainer. After all, there’s already a tenant...