There’s an Italian saying that loosely translates to “A good beginning bodes well”. That’s exactly how it works with property deals. Getting a good deal makes everything else for an investor that much easier. In fact, your skill at property sourcing is what ultimately decides the fate of your investment strategy.
There are a lot of different ways to source property deals, and an estate agent is one of them. Now, for the newbies in the world of property investment, it’s common to think of agents as their first port of call. But if you’ve tried to buy a deal from an agent before, you probably know that it doesn’t always work.
Why should you think of bypassing estate agents?
Now, don’t get me wrong — almost 95% of vendors will head to the agents to sell their properties. So it’s not that they don’t have any good deals to offer. It’s just that most estate agents are often leery to work with investors. But if you’re willing to put in the time and hard work (which you should anyway) to establish a solid relationship with them, then you could get your hands on those “prized” off-market deals that agents are typically known to reserve for their best buyers.
But that’s not the only hurdle. When trying to source a deal from an estate agent, you’ll be up against a wider set of competitors, which also includes standard homebuyers. These buyers aren’t necessarily looking for a “below market value” property because they have no profits to gain from it. At least, that’s not their immediate intention. So obviously, they are often a bigger draw for estate agents.
Moreover, not all estate agents operate as letting agents. As such, they may not have the experience or the background to be able to assess the rental yield in an area as well as the overall return you can expect on the property. So if you’re a buy to let investor, taking an agent’s word for the rental potential of a property or location could turn out to be a recipe for disaster.
That said, it’s perfectly possible to source great deals without agents. There are many ways to do this. Plus, using more than one deal generation channel is something we always recommend to investors, so they don’t have all their eggs in one basket. In this article, I’m going to talk about some of those methods that don’t involve an estate agent.
1. Look into your inner circle of friends and family
Yes, there could be a deal sitting right under your nose. But most investors don’t realise this because they never think of a family member or friend as a source. Or maybe, you don’t discuss “business” with them.
But here’s the thing — there could be someone among your personal connections that may have a great deal up their sleeve, or knows someone else that does. You could even stand a chance to get hold of the property before it goes on the market.
Now, this may seem a bit tricky because if someone you know is selling a property in a hurry or at a price less than the market value, there’s often a personal or financial reason behind it. And, that reason may not be a pleasant one. But don’t be deterred by it. Remember — it would take the pressure off them to sell their property fast than seeing it languish on the market for months.
2. Property-related Facebook and LinkedIn groups
Social media is one of the top places these days where people post their requirement for anything — from a pet to a property. But it’s the groups and communities where you can catch most of the action. There are hundreds of property-related groups on Facebook and LinkedIn, where you can spot off-market properties, BMV deals, lease options, and other investment opportunities. You can also put up posts on these platforms looking for specific deals in specific areas. If you’re a cash-rich buyer, your posts are likely to elicit many interested responses.
But with this method, it’s crucial to be able to filter out the genuine deals from others. Get on the phone, ask questions, and arrange a meeting, if possible. Is it a direct-to-seller deal? Or, are there middlemen involved? Try finding answers to these questions before proceeding.
3. Direct mail campaigns
Postcards, flyers, or leaflets may sound outdated in this digital age. But the fact that they are still very popular with investors and agents proves that they work.
Now, this technique works best with motivated sellers. These are people who need to sell their property and are usually under pressure to sell within a specific time (maybe a few weeks or months). This could be due to financial reasons such as bankruptcy or personal reasons like divorce. It could be that the property has been left in probate. Or, maybe the seller wants to relocate for some reason.
Many such sellers get on the market via agents, but there are others who do it on their own, particularly to cut back time and attract a quick sale. These are the sellers you’d want to target.
Start by building your list. This could take some time, but once you’ve created a good list of sellers to approach, the next steps are going to be easy. There are a few different ways to build your list. Property portals, private ads, and ‘for sale’ signs are some ways to identify a potential seller. Also, keep your eyes on the houses that have been on the market for a long time — often, sellers get more motivated as more time passes. Alternatively, you could also buy mailing lists from third parties.
Direct mails can get expensive depending on how long is your mailing list and whether you’re purchasing the lists as opposed to creating your own.
4. Local property networking meetings
These are events where you can speak to sources. They are looking for investors too, so these events can serve as an excellent place to meet multiple sources face-to-face, which is, by far, the best way to build rapport. However, once you’ve got an offer, remember to spend time in relevant due diligence to make sure the deal is authentic.
5. Find a property deal packager
If all of the above sound like too much work to you, and you’d want to save time to focus on other aspects of your property business, a property deal packager may be an excellent option for you. It may sound like a bit of self-service because our company falls under this category. But think about it — you won’t have to spend hours and hours on property websites, looking for a needle in the haystack. A deal packager like us does all the homework and all the legwork for you. The deals are tailored to match your specific requirements. And, because we already have the contacts and relationships that would probably take you months to build, we can get you some seriously discounted property deals.
Again, property sourcing companies are going to charge a fee, so do factor that into your overall investment strategy. But eventually, it’s pretty worthwhile because you’ll have saved a lot of time (which is money) and your portfolio will grow a lot faster.
So there you have it — five different property sourcing strategies that won’t have you rely on estate agents. We’re hoping you’ll find some of these ideas helpful.