In this blog, I'm going to share with you how you can make money by passing on great property deals that you don't want to other investors. Typically you can make £3,000 to £5,000 pounds per deal. I'll explain exactly how you can do that in this training blog.
Once you get good at finding deals in your area, I believe you'll probably find more than you can do yourself. Now, of course, you're going to keep the best deals for yourself. The ones that you don't want as long as they're a good deal, you can sell them on to other people.
How can you get paid for deals that you don't want? They've got to be good deals, if you're going to pass something on and get paid a fee for it, typically £3,000 to £5,000, it's got to be a good deal. You've got to have some value in it. So you're buying at a discount, or maybe it's a creative finance structure such as a purchase lease option, or maybe it's a deal with a very high return on investment, such as a house of multiple occupation. If you're passing on a good deal to someone else, there are other investors who don't have the knowledge, or the time, or the inclination to go and find great deals for themselves. I believe that learning how to find great deals is probably the most important skill that you need to learn as a property investor.
You might think, "Well, surely I've got to learn "how to raise money." Here's the reality. Finding deals is definitely the hardest thing to do. There's loads of money out there. There are people who've got cash, and they want to get into property, but they don't know how to find great deals. So if you can master finding really good deals, that is absolutely the best thing for you to do. If you want to be investing yourself, why on earth, wouldn't you want to learn how to find the very best deals? But as I said earlier, when you get good at finding deals, you'll probably find more than you can possibly do yourself.
You might find ones that are outside of your area or ones that don't meet your strategy, or deals that are too big for you, or too small for you. What most amateur investors do, they'll just walk away from those. They're just focusing on the ones that work for them. But my point here is if they are great deals, you can monetize those by selling to other people.
Why Should You Consider Selling Deals?
Why should you do that? Well, if you're looking for deals anyway, and by the way, that can be done very much part-time, when you've got the right systems and processes in place. You should not be spending hours and hours each day, looking at Zoopla and Rightmove for deals. You can find them online by the way, but it only takes a few minutes when you know how. You should be working with estate agents, but in the correct way.
You should be looking off the market for properties that are not listed on the internet for sale. This is where a seller wants to sell, but most people don't even know about that. So it's about finding these deals, and you could do that very much part-time. One of the questions we had was about, do I need a lot of time to find great deals? When you know what to do, you can do this very much part-time.
Another question we had was, well, is it going to cost me a lot of money to do landlord letters or set up these marketing campaigns? There are some things you can do that do require money, but there are many strategies you can use to find motivated sellers, to find great deals in your area that really do not require any money at all. They are completely free. To find great deals, you do not need to have a lot of money.
To actually do a deal, you might think, "Well, I need to have a deposit to be able to buy the property," but here's the point. You could work with other people. Other people who've got money, but they don't have the time, or knowledge, or energy to find deals, you go and find a great deal, they put the money in and you do a joint venture. So I believe if you find really good deals that have got enough profit in them, so that you can make some money and you've got enough profit to pay someone else, you can do all the deals you want. Another really important distinction for you here is a lot of people will often look for a certain size deal that they think they can afford. They're just thinking about their personal resources. I want you to think much bigger and realise that if you find a good deal and if you've networked and met other people, then there are ways of getting those people to come and fund deals for you.
“What you could make part time selling deals to other people could very easily, quickly surpass what you earn as a full-time job.”
Look for 'Great Property Deals'
Rather than just thinking about doing smaller deals, go looking for great deals. If they're a great deal and you take the necessary steps, there's always ways of funding those great deals. Here's another interesting point. If you're looking for bigger deals, there's not as much competition. Because most people don't look for big deals, because most people are just thinking about their own personal resources.
They're thinking, "Well, I have to have a certain amount of money." They're then looking at smaller deals. Actually a lack of money is not a lack of resource, but it's a lack of resourcefulness. If you go to property network meetings, if you go to property training events, there are people who go to those events, who've got money, who want to learn how to find great deals.They realise they've got to put a bit of time and effort in, and you do have to put some time in, this is not a get rich quick thing. But once you do that, then you can find some great deals, and there are people at those events who might want to work with you.
People say, "Look, can I do this if I'm completely new?" In fact, finding deals is a great way to start because it's a great skill for you to develop anyway. As you find really good deals, you're going to keep the best ones yourself, but deals that may be are not quite good enough for you, just because they don't work for you, doesn't mean they won't work for someone else. We all have different criteria as to what's a good deal for us. So I want to open your mind and your thinking, that as long as it is a good deal, there might be someone else who can buy that off you.
Just imagine that you're looking for deals anyway, and let's say you are selling an average fee of maybe, £4,000 for a deal, typically between £3,000 to £5,000 is a normal deal, but let's say £4,000 average. If you sold just one deal a month, to another investor, that's £4,000 a month, that would be £48,000 a year. You could make that very much part time, by selling deals to other people. If you were to sell two deals a month, that would be £96,000 pounds a year that you could get part-time while you're looking for deals anyway, for yourself. This is why it's so important to understand to pass those. Now you might say that, I just want to look for myself, I don't want to sell this, I know, that's fine, you don't have to do that. But you've got to learn how to find great deals in the first place, it's really, really important.
Becoming A Compliant Deal Sourcer
If you do want to sell deals to other people, you do need to become what's called a compliant deal sourcer. If you're just looking for deals for yourself, you don't need to do that. But if you do, you need to become compliant. Register with one of the property ombudsman like the TPO or the PRS. You need to get professional indemnity insurance, in case you make a mistake, you need to engage with the information officer, also, you need to engage with HMRC. This costs about a thousand pounds for all of those things, but if you're selling a deal at £4,000 pound each, you'll cover that more, more than enough in just your first deal.
So it's something to think about. If you're out there looking for great deals, I think you should really think about deals that don't work for you, can you pass them onto other people? Now, something else that people ask me, they say, "Okay, well, so what are you saying, Simon? It doesn't take a lot of time, "once you know what you're doing "and you put some good systems in, that's correct, "you're saying it doesn't take a lot of money. "You know, is this something I could do as a complete beginner?" We have many clients who become a deal sourcer because they want to learn how to find good deals, and because they're selling all the deals they're finding, that actually gives them the deposit money for the properties they eventually want to buy.
Here's another idea for you, when you're selling deals to people, you might have a deal that's really good, you don't want to sell. Some of the people you've sold to in the past, you could approach them to see if they want to joint venture when selling.
Do You Need Loads of People to Sell Deals To?
Another question people ask is, “do you need to have hundreds of people you're selling deals to?”. No you don't. If someone's got money to invest, they want to build a portfolio. They might want to buy a couple of properties a year. So you could just have a handful of people, maybe five or six people, that you're working with and you sell them two deals a year, one deal per month. That's going to give you your £48,000. So actually when you understand the numbers, it doesn't take a lot for you to actually make a huge amount of money deal sourcing. What you could make part time selling deals to other people could very easily, quickly surpass what you earn as a full-time job.
I'm pretty sure if you're doing a full-time job working eight hours a day, five days a week, or maybe longer than that, you're not going to be putting as much time and effort into your deal sourcing. Once you know how to do it in the right way. But you do need to educate yourself on how to do that.
As ever, I encourage you to invest with knowledge, invest with skill.
6th Revised and Updated Edition
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