HOW TO START A PROPERTY BUSINESS TODAY
Today I want to show you how to start a property business the correct way, so by the time you have finished reading this you’ll have a realistic expectation of what you can achieve.
DON’T get lured into thinking this is going to be easy…
I could have lured you into reading this by grabbing your attention with a headline such as “Make £10,000 from deal packaging in the next 30 days” but that wouldn’t be ethical, and it certainly wouldn’t be achievable for most of you – not in 30 days anyway.
OK, so that’s the harsh reality check done, now let’s get on with helping you start to build your very own sustainable and successful property business.
Where are you right now in terms of property investment experience and financial position?
I am going to make two assumptions about your current situation:
- That you have very little, to no, experience of property investment
- You have very little, to no, capital to invest in buying an investment property (right now)
I make these assumptions because, after training 100’s of people just like you, the majority start their journeys in a similar position ticking one, or both, of these boxes.
The good news is neither of these will stop you from becoming a successful property business owner.
What I hope it will do though is make you realise, as with anything you try out for the first time, it will have its challenges.
BUT if you follow these steps you’ll be giving yourself a MASSIVE head start over those who think this is going to be a walk in the park!
If you feel you are experienced and have money to buy a property but want to add another revenue stream to your property business packaging up surplus deals for a fee, then I’m sure you’ll also find this article useful.
Although it might be worth skimming the first part for a refresher!
DON’T try to take on too much too quickly…
One of the most common mistakes I see when people come into the world of deal packaging, is their chaotic approach to generating leads.
Whilst it might seem that a scattergun approach to generating leads for ALL strategies might bring you more business, it won’t and this certainly shouldn’t be how you start your property business!
Is there a strategy that interests you more out of all the available options?
If you’re still struggling to choose ONE strategy then here’s a little exercise for you. All you need to do is think about this…
If money was no object, which strategy would you be choosing to focus on to build your own property portfolio?
Got an answer?
Right, that’s the strategy you need to focus your attention on for the purposes of getting started with your property business.
There are all sorts of reasons for doing this but the main one is…
If you’re interested in the strategy yourself then it’s going to make it much easier to motivate yourself when things are tough.
It also means you’re building up your experience in your preferred strategy so, when the time comes to invest yourself, you will be an expert in your area with all the right contacts to move more quickly than those starting out on their journeys.
Same goes for your area…
That’s right, the same focus you have chosen for your strategy applies to choosing your area including asking yourself the same question if you don’t know which area you’re going to choose…
If money was no object, which area would you be choosing to focus on to build your own property portfolio?
Again, the same reasoning applies. You’ll know your area inside out, you will have the right contacts and you will be on the ground ready for those opportunities when they come up and the time’s right for you to buy a property for yourself.
You want a property business? You need to treat it like a proper business!
You are going to need a plan (a map) laying out your path ahead.
Your plan should, as a bare minimum, include:
- 1, 3 and 5 yr plan including goals you are going to achieve at the end of each time period
- Targets/Milestones you’re going to achieve on the way to achieving your goals
- Tasks/Activities you’re going to do in order to hit your targets and move towards your bigger plans
But I’ve got a job, how will I find the time to start a property business?
Guess what? You’re in the same boat as 85%+ of students I have worked with / am working with.
Is it possible to package deals when in employment? Absolutely, yes!
Is it going to be more difficult? Not if you manage your time properly and be disciplined in doing the work that’s needed of you!
Managing your time effectively, easy peasy (or is it)?
We’re all busy. Whether you’re working full/part time or you’re a stay at home parent, the chances are your day is already pretty jam packed with stuff you need to do.
I am confident in my assumption that you probably don’t manage your time as effectively as you can.
There will be periods in your day where you could be far more productive with your time. Don’t worry, we’re all guilty of this. The key is to acknowledge it and make a conscious effort to change.
Take a good look at your diary and work out times where you can focus your attention on your property business. Even just 30 mins a day will go a long way to moving you forward to achieving your goals.
Now onto business…
As with any business opportunity you are going to need to think about how you set yourself up and the impact the extra income is going to have on your personal financial situation.
It’s going to take a little bit of time to gather momentum and start earning an income from deal packaging but I would recommend you speak with an accountant and run through your individual circumstances now, so you have a plan for when those property sourcing fees start rolling in.
Another serious consideration when starting a property business in deal packaging is the legislation surrounding what we do.
These are the rules and they must be obeyed!
In the eyes of the law we are in the same circles as Estate Agents which means we are governed by very similar legislation and regulations.
Whilst the rules and regulations are a really important part of running your property business, I don’t want to go into the detail here but I will list the minimum requirements so you know:
- Membership of a property ombudsman (there are two you can choose from; The Property Redress Scheme (www.theprs.co.uk) or The Property Ombudsman (www.tpos.co.uk))
- Registration with HMRC for anti-money laundering regulations (AMLR)
- Registration with ICO for Data Protection regulations
- Insurances – As a minimum, Professional Indemnity (PI) insurance
Remember, membership/registration to the relevant bodies come with their own requirements that you must adhere to including policies and procedures.
You must ensure you are fully aware of what’s expected of you before ‘trading’ to avoid fines and even criminal proceedings!
Leads, Leads, Leads
So, hopefully now you are clear on which strategy and area you are going to focus on.
By now you’ll have a fantastic, detailed business plan setting out what you’re going to achieve, when you’re going to achieve it by and the key milestones along the way.
You have also set the compliance wheels in motion to ensure your property business is going to be professional and most importantly legal!
You’ll now want to go out and start generating some property leads.
We’ll come onto finding investors for the deals you find in a bit, but for now you can get out and start viewing properties that are on the market with agents in line with the strategy you chose earlier.
Depending on your chosen strategy, you will either be viewing properties currently on the market for sale or you’ll be looking at properties to rent (or potentially even both).
Agents are the obvious place to start as the properties are already on the market and you can ‘practise’ analysing them by arranging viewings, performing due diligence and honing your skills.
Are you wasting the agent’s time? Not really. If the property ticks all your boxes, then you’ll be making an offer. If it doesn’t, you’ll be moving onto the next one.
This is what deal packaging property is all about!
Wait, wait, wait…what if I don’t have an investor for the deal?
Another common worry I encounter from newbie deal packagers is the fear of not having an investor lined up if an offer is accepted.
There are two ways you can handle this situation:
- Have your investors lined up before the deal is agreed
This is more straightforward than you might think and goes hand in hand with what I said at the beginning regarding your focus and business plan.
If you follow my advice you’ll find it’s much easier to get investors aligned with the deals you are looking for rather than being led by what they are looking for.
- Ensure the deal is so good, investors will be jumping over each other to be one who takes it off your hands!
I’ve never understood social media posts where deal packagers have a deal but are struggling to find an investor for it.
If the deal is good enough there will be an investor out there ready to take it off your hands.
Common issues I see however include;
- Property sourcing fees which are way too high for the deal
- Poor levels of due diligence which can include incorrect current market value, underestimated refurbishment costs, high estimated rental income etc.
- Lack of customer service when it comes to handling enquiries and progressing leads to firm deals
It’s not just about the quality of the deal, although this does make up 85-90%.
It’s all about how you present the deal, how you managed the investor when speaking with them and the level of due diligence you carry out before proceeding with them as a buyer for your packaged property deal.
People work with people they get on with. This has been the case since the dawn of time and it’s no different in deal packaging!
The ideal scenario is you will work with investors who are able to buy multiple deals from you and potentially become joint venture partners in the future which becomes very exciting!
Staying in line…
At Goliath we are huge advocates of the concept of staying in line which means avoiding distractions, focusing on your strategy and area and staying consistent.
I am warning you now, there will be distractions!
There will be ‘shiny pennies’ ready to distract you from what you are doing!
There will be times when it feels like nothing’s working and you just want to give up!
But you can avoid all these distractions by having a clear focus on strategy and area.
A detailed plan of where you’re going and how you’re going to get there and the grit and determination that all us property business owners need to be successful sourcing property deals!
So there you have it, how to start a property business today.
Happy Sourcing ?
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