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DEAL SOURCING - Coggle Diagram

- - - - Why? Estate agents so important to supply deals. Help them do their job, minimum fuss, maximum ease. So....
      - Only view properties you can buy, deal wise
      - Develop relationship based upon delivery, not ‘nice to have time together’
    - - Why?
      - Treat them as equals, hope they too can build a secure & wealthy future in property.
      - Helps them understand types and values of properties we're looking for.
      - Using examples of Below Market Deals, we teach them types of property deals we're looking for.
      - Allows them to ‘put themselves in our shoes’, see property buying from Investor’s point of view, not selling Estate Agent’s point of view.
    - - Solicitor details
      - Proof of funds
      - Weekly communication
    - - Nobody likes smarty arse!
      - Agents hold economic power
      - Agents more likely give great deal to someone they like / hope to help, than a smart arse.
      - Why?
    - - Why?
      - Experts on their patch, know every house for sale and sold within their 1/3 mile radius.
      - Closest to the market, experience market trends as they happen - key source for market research.
      - Listen to their view of market, current values & trends - acknowledge their expertise.
  - - - 1. Property Viewing Recorder (PVR) printed – ready to populate
      - 2. Estate Agent List (EAL) open – insert date and comment re call
      - 3. MousePrice or equivalent open – to see Land Registry Solds
      - 4. Calculator – to analyse yield and discount
      - 5. Diary for viewings
    - - 1. Pick up phone, working down list. Ask to speak to favourite person (you'll learn over time)
      - 2. Ask ‘Have you got something with margin’
        
        First deal - probably not a deal, but complete PVR pg1
        
        Third deal - (from their ‘mental filing cabinet’) usual a great deal, so keep them talking.
        
        Explain you are filling in a form (slow them down), and 'I would not want to waste your time'. Viewing a property that does not fit with the figures and the margin I am looking for, then ask if they have anything else.
        
        Rifle their mental filing cabinet - looking for discounted property about to go on market but not released yet. Scheduling a viewing and buying it reduces agents workload (and bag a bargain for self)
        
        Slow them down - allow time think of their stock, not book you on viewing unproductive for both.
        
        Remember your ratios – offer on 85% of properties viewed
        
        More desk & phone research = less viewing properties not fitting discount criteria
      - KEY TIPS
        
        Slow down the agent – allow their brain to catch up and to start thinking
        
        Ask for ‘something with margin’
        
        Likely to be the third deal they present – focus on vendor situation, ask them to sort through ‘their mental filing cabinet’
        
        To find a deal: Susannah 17 mins, Ash 10 mins
        
        Evaluate each deal on call – decide yes / no if you will book viewing on the spot
        
        Close viewing date on call - later that day, or at
        latest, next day
  - - - Solds in area (Land Registry Prices)
      - Properties on market or recently solds similar or SSTC
      - Above to discuss with agent – not aggressive / accusatory - as partners, shoulder-to-shoulder, interested in property market
    - - Property Viewing Recorder - pre filled in during call, with clipboard
      - Viewing Kit: Torch, Ladder, Damp monitor, Calculator, Camera phone - linked directly to that property folder on Dropbox / Google Drive
    - - Spend time with Agent:
        
        Get to know them
        
        Teach them how to invest in discounted properties themselves (show how they can become property investors)
        
        KEY HERE IS: investigate & understand Vendor situation and lowest offer acceptable to vendor – say:
        
        ‘I don’t want to waste your time, so it would be good to know the lowest range of what your buyer would accept, so I can see if we can offer when I get back to the office’.
      - Write up Property Viewing Recorder:
        
        Property condition & external (busy road, nearby schools, work needed, etc)
    - - Update Sourcing Offer System with Property address, offer you will submit (have data for next 90 days, should offer not be accepted straight away).
      - Long term, this SOS system will allow you to understand viewings needed to buy a deal (Susannah 1 in 5, Ash it is 1 in 9)
  - - - 3. Written Letter - again with information on your Legal Team and Proof of Funds
      - 2. Email – with information on your Legal Team and Proof of Funds
      - 1. Verbal
      - Why?
        
        You stand out.
        
        Allows agent to bring your contact details to weekly agent meetings.
        
        Proof of funds (yours or investor’s) - you will be talked about, may start to become ‘front of mind’ for whole team.
        
        Over long run you ‘climb’ ladder, become preferred buyer, someone they call first.
- - - - 1. Map out streets - then walk looking for tell tale signs - paint peeling, old & dirty curtains, poorly looked after properties
      - 2. Enter address data - via smart phone direct to spreadsheet on Drive/Dropbox
    - - 3. Print off 12 months of letters - in advance & store ready to send each month / quarter, for each property.
      - 4. Post off Batches - pre-prepared, on a monthly basis.
      - TGPC aim to post 1,000 letters / month, to buy properties directly from owners who could do with a new start.
    - - Not in the market to sell immediately, response rate low
    - - Seasons of houses; Winter before Spring, inevitable season change in the life of a house
      - Long term information, not gone tomorrow •
      - Cheap and automatic once set up. Do it once a year!
      - You show consistency which will deliver results
  - - - • Goldmine – a seam of properties, not just 1
      - • Long term information, not gone tomorrow
      - • Can be done by remote VAs (E-Lance, People Per Hour)
      - • Cheap & automated 3 in months advance
    - - • Takes longer, not in the market to sell immediately
      - • SOS system really needed – 30/60/90 days plus
      - • Why? They are weighing up benefits of sale versus hold, and at times, only decide to sell once gotten in pickle tenants.
      - • May have angry, non looked after tenants to deal with (deposits not been protected, other minor legal difficulties)
  - - - 1. Rent a number - voiphone.co.uk
      - Benefits: a local number
      - Benefits: record vendor's message (can listen prior to returning their call - have a good idea in advance), because answer service separate to phone number, can change if quality drops - don't have to re-record messages.
      - 2. Rent an answering service - answer.co.uk
    - - Keep leaflets in house for longer - one side useful info (calendar, local numbers, school holidays, etc) with small square in bottom right hand corner ‘We buy Houses, PTO” and keep it low key.
- - - - One: Desk Research: Solds:
        
        Tool: Land Registry Sold Prices https://landregistry.data.gov.uk/app/ppd
        
        Portal: Mouse price or others https://www.rightmove.co.uk/house-prices.html
        
        Method: List address, type of property, date sold and selling price into spreadsheet
        
        Valuation: Average value of data collected
        
        Task: Identify 20 comparable solds, within a very tight and physically, economically and socially similar area, within the last 2 years.
      - Two: Desk Research: Currently on the Market:
        
        Task: Identify 20 comparable current properties, on the market or sold STC, within a very tight and physically, economically and socially similar area, within the last 6 months.
        
        Method: List address, type of property, date sold and selling price into spreadsheet, with picture
        
        Valuation: Average value of data collected
        
        Tool: Rightmove https://www.rightmove.co.uk/ , Zoopla https://www.zoopla.co.uk/, OnTheMarket https://www.onthemarket.com/ others...
      - Three: Phone Interview: Experts:
        
        Task: Identify market value as perceived by the experts in the market place: estate agents, of a particular property, rather than an average
        
        Tool: Telephone
        
        Method: Call 5 local agents, who are not selling the property, ask for their done up valuation range, (cream walls, beige carpets, nothing fancy) and what you would get if you sold it now, done up, what market is doing
        
        Valuation: Average value of data collected
  - - - Equity Created – goes onto your Balance Sheet! But remember, can’t eat it!
      - ROCE (Return on Capital Employed) or ROI (Return on Investment)
      - Gross Yield and Gross Yield After Refurb Costs
      - Monthly Rent - can I improve this over time?
      - Money Left In – what is the payback time in months? A negative number here indicates infinite return – i.e. no money left in, which is great.
      - Gross Monthly Profit
    - - BUY TO SELL RULES
        
        Profit Margin +20% - after all costs (purchase price, refurb, finance interest costs, council tax, utilities, cleaners, gardeners, staging company, estate agent, removal company, handy man to put up furniture, etc). Healthy margin allows for mishaps.
        
        Return on Capital Employed - to compare with other projects
      - BUY TO KEEP RULES
        
        Return on Capital Employed +20% - on any cash left in
        
        Net yield +10% - Annual rent (- bills)/(purchase price plus refurb cost x 100 if shared house
    - - End Value ÷ 1.2 – refurb costs – all other costs = Top Offer Price. For example:
      - £240,000 (end value) ÷ 1.2 = £200,000
      - £200,000 - £13,500 (refurb costs) = £186,500
      - £186,500 - £6,500 (other costs) = £180,000
      - Top Offer Price = £180,000
- - - - Start conveyancing!
    - - SOS system improves your efficiency and opens conversation with agents which you record in Estate Agent List
      - Never decrease your offer; likely to ‘fall out of bed’ even if offer is initially accepted (their nose will be out of joint, they'll try hard to sell it from under you as you conveyance.
      - Come back (to this property) in 30, 60, 90 days to re-offer
      - Add deal details to Sourcing Offer System, go source another
  - - - Methodolgy: Schedule texts to landlords (e.g. to invite them to sell their properties) up to 3 months in advance. Only need schedule texts 4x per year - pretty efficient.
      - Tools: Use automatic text system** (e.g. https://www.textmagic.com/ 4p/text)
    - - Methodology: Outsource someone to ‘scrape’ landlord contact details from all usual online advertising portals – Gumtree, EasyRoomMate, SpareRoom.
      - Tools: Outsourcing site like Elance, People Per
        Hour
      - Benefit: Price can be great. Ensures work gets done on weekly basis. All repeatable systemised work can be outsourced this way.
- - - - Susannah Technique:
        
        • Identify minimum of 4 properties I could buy, but usually 7 or 8 - don’t get carried away bidding on any one property, always another coming along
        
        • Get written report from your solicitor on Legal Pack.
        
        • Do desk research to evaluate deal values
        
        • Write down top price and stick to it
        
        • Reduce down bidding increments (e.g. auctioneer goes up in £10ks, you offer £5ks), with grace!
      - Arrival:
        
        • It is nerve wracking, people try to intimidate positioning. Ignore. Not going to change your buying strategy because of bunch egos
        
        • Read legal packs, top to bottom,
        
        • Check nothing new been put in pack
        
        • Listen to auctioneer announcements, for last minute changes
        
        • Chill, this is fun!
        
        • Reserve price – not sold if not reached
        
        • Slow down bidding
        
        • Strategy – early, middle, end? Don’t play games with bidding, just go to top price then move onto next property...
      - Bought it?
        
        That Night....
        
        • Fill out buyer form immediately
        
        • Write a cheque for 10% deposit
        
        • Insure Property
        
        • Stay till end
        
        • Sign contract
        
        Next Day
        
        • Lawyer
        
        • Funding
        
        • Conveyancing – hard. Daily. 28 Days turnaround
        
        • Risk to deposit if you cannot fulfill obligation
    - - What Didn’t Sell?
        
        • Identify vendor - often in room - make contact
        
        • Identify solicitor - often in room sitting on panel
        
        • Make an offer there & then
        
        • Next Day – make an offer with proof of funds and email
    - - Expect
        
        • The Pack to be late
        
        • Incomplete
        
        • Unable to be downloaded
        
        • If downloadable, unable to be sent to your solicitor due to their firewall
        
        • Changed at last minute
        
        • To have to go direct to solicitor to get missing parts
        
        • Almost zero responses from vendor solicitor to yours
      - Pre Auction Legal Pack
        The Auction House will publish a legal pack, consisting of:
        
        • Auction House Terms and Conditions
        
        • Contract
        
        • Title Register
        
        • Title Plan
        
        • Bidding Form (Proxy)
        
        • EPC
        
        • Searches – drainage / environment / Local Authority / Coal mining...
        
        • If applicable, Leasehold information
      - Auction Recommendations
        Always:
        
        • Instruct solicitor to review legal pack - instruct on 4 minimum for each sale (never get emotionally involved in one house).
        
        • Get written report from them in advance of sale
        
        • Query anything you don’t understand in report
        
        • Ensure you can get indemnity policy to cover any shortfall in legal status of property
        
        • Ensure you can insure property from exchange – likely at 9pm at night, if buying at auction
        
        • Ensure you can call your solicitor’s mobile on night of auction to ask for guidance if are any last minute changes to legal pack (which do happen)
      - Pre Auction Buying Stages
        
        • Find out which properties are available for pre auction offers
        
        • Put in pre action offer, with proof of funds and solicitor details
        
        • Conveyance on a daily basis
        
        • Exchange very fast
        
        • Complete within 28 Days