How To Become a Property Deal Sourcer in the UK (9 Steps)

If you want to become a property deal sourcer in the UK and get higher ROI, this guide is for you.

As one of the leading property investment firms in the UK for over 10 years, we have the experience, knowledge, and success stories to guide you on this journey.

What is property sourcing?

Property sourcing is the process of finding, analysing, and acquiring residential and commercial properties to generate higher revenue and profits. 

Property sourcing aims to find undervalued properties, purchase them at lower prices, and then refurbish and resell them at higher prices. 

Who is a Property Deal Sourcer?

A property deal sourcer is a professional who puts property deals together by analysing, finding, and negotiating top properties in the best locations. They act as a middleman in the transaction between landlords and property investors. 

They conduct thorough market research to identify high-potential investment opportunities and negotiate purchase prices, terms, and contracts for closing favourable deals. Sourcing agents also ensure all deals comply with legal and regulatory requirements, and provide detailed reports and recommendations to investors about the pros and cons of potential deals.

How to become a property deal sourcer in the UK?

Here is step-by-step guidance on how to become a property deal sourcer in the UK.

Step 1: Have a clear strategy to start with

As a property deal sourcer, you need to have a strategy on how to operate your business, such as, whether you would earn through property rental income, by property flipping, or through a mixture of both (like BRRRR property investments). Property flipping is the process of buying an undervalued property, refurbishing it, and reselling it. 

Another essential part of your strategy is deciding on whom to target, like students, young professionals, tourists, or families. Each of them has different needs and you need to understand them as per your strategy.

Budgeting is also essential for a property deal sourcing agents career where you start dealing with properties that align with your budget. For beginners, investing in a house of multiple occupations (HMOs) is good, while experienced professionals also invest in apartment buildings. 

Step 2: Acquire adequate knowledge of property sourcing 

Starting property deal sourcing is simple but not easy. You need to acquire in-depth UK property market knowledge, to understand the opportunities and different types of challenges that investors can face. This will help you provide valuable advice to your clients. 

You also need to stay updated about the industry trends and economic changes in the country. For example, you can visit the Office of National Statistics website to check the present property prices and changes in rents in different areas of the UK. The economic condition of an area largely depends on the demand for housing properties and their values. 

Another important aspect of property sourcing is being smart with money. Learn about different investment strategies, forecast financial conditions impacting property trends, and how to work with financial data to make data-driven investment decisions. 

Step 3: Know the legal side of this business 

Once you decide on starting a property sourcing business, you must focus on the deal sourcing compliance. Because, if you fail to comply with the necessary regulations in the UK, you put your business at risk. 

Before becoming a property deal sourcer, it is important to get the right documents in place. Every property sourcing business is governed by the Estate Agents Act 1979, which mandates you to stay compliant with its rules and regulations before sourcing any deal.

Below, we have mentioned some essential registrations for your business. 

1. Register with HMRC 

HM Revenue and Customs is responsible for collecting taxes and monitoring payments and customs authority in the UK. As property sourcing comes under the same category of estate agent, you need to register with HMRC.

2. Register with a Property Ombudsman 

You also need to register with a property Ombudsman scheme that allows customers to raise complaints if they are unhappy with how you handle a situation. There are three property Ombudsman schemes. These are Ombudsman Services, The Property Ombudsman (TPO), and the Property Redress Scheme (PRS). You need to register for either of these to ensure property buyers’ security. 

3. Register with ICO 

As you handle client personal data, whether it is of the landlord or property investors, you need to protect that data. Property deal sourcers must register with the ICO (Information Commissioner’s Office) to comply with the General Data Protection Regulation guidelines. 

4. Register with NRLA

As a beginner your focus must be to find ways to grow your business, registering with NRLA is one best ways for property sourcers. All private residential landlords in England and Wales are National Residential Landlords Association (NRLA) members. By registering for this professional body you get access to a wider section of landlords, property experts, support teams, and training resources.

5. Register with FCA

Your business must register with an anti-money laundering scheme which is achieved through the Financial Conduct Authority (FCA). It is because the property industry is highly exposed to money launderers.

6. Get the right insurance 

Mistakes in property deal sources may happen, and businesses can protect themselves from the right insurance. The two main types of insurance to get are professional indemnity insurance and public liability insurance. 

Indemnity insurance protects you when a client complains about your services they didn’t like, like negligence, breach of confidentiality information, or misguidance. 

Public liability insurance covers all claims from the public suffering from personal injuries, loss or damage of property, etc., caused by or on your property. 

7. Get contracts in place

These contracts can be called a property sourcing agreement, sourcing fee agreement, property finders agreement, etc. Whatever you call them, the contract outlines processes and timelines of how property sourcers will communicate with their clients before, after, and during the deal. It must contain any confidentiality agreements regarding the deals when and how much money is to be transferred, and refund policies. 

Step 4: Choose a business structure 

Now that you know about the legal requirements for a property deal sourcer in the UK, you need to decide on the structure of your business. This can be either sole traders, limited company, or partnership property sourcing business.

You can start your business as sole traders as the setup process is simple and you get all the profits after paying taxes. It is suitable for property sourcers working with fewer properties and clients. But, as your business starts growing you can register the business with Companies House as a limited company. 

Operating as a limited company creates a legal barrier between you and the business. It means, unlike sole traders, you won’t be personally liable for debts or loan payments of your company. The tax benefits for limited companies are more than for sole traders. But, you need to register for corporation tax, VAT (if your annual turnover exceeds the VAT threshold of £90,000 for 2024-25), and PAYE (if employing and paying staff).

Step 5: Know your funding options 

Now, to start deal sourcing you need funds. It is when you need to research different funding options such that you can invest in different properties and build your portfolio. One big challenge of property investment is liquidity risk. Unlike other Investments, you can liquidate properties, which means you must always have sufficient cash reserves to meet immediate needs like property refurbishments, repairs and maintenance. 

Some of the popular funding options for property sourcers are:

• Own savings 
• Mortgage 
• Bridging loans
• Private investors
• Joint Venture
• Capital Ventures
• Crowdfunding 

Instead of taking out your own savings, you can take out bridging loans and mortgages to fulfil your small-term property investments. However, for larger business Investments, start looking for private investors, joint ventures, capital ventures, and crowdfunding. 

Step 6: Use property sourcing tools

You must be technically strong to streamline most of your property sourcing processes. Finding top properties and then analysing and shortlisting the best ones is difficult, especially when you are dealing with multiple properties at a time. Using modern tools and technologies can help you. 

For example, you can use the PropertyData tool that helps sourcers in finding and analysing properties. It provides real-time data insights on property listings, market trends, and sales data, ensuring you make the right investment choice. 

Another great example of a property sourcing tool is PropertyEngine. It has multiple features that can streamline the entire property sourcing process including managing deal pipelines, generating custom property reports, etc.

Step 7: Start finding amazing deals and build a property portfolio 

Once you use analytical tools like PropertyEngine and PropertyData, or Nimbus Maps and Property Filters you can source amazing deals for your clients. This will help you further build a great portfolio that showcases the deals you closed between landowners and investors. 

Make sure to ask for feedback and testimonials from your clients on Google MY Business account, or on your website. This ensures whenever someone searches for a property deal sourcer, the search engine will recommend you as a trusted partner. 

Step 8: Build connections and improve online presence 

To start getting clients or to learn from industry professionals you need to start building connections. The first thing you need is a professional website that showcases all the services you provide, your past dealings, customer feedback, contact details, and informative blogs. Once your website starts ranking on search engines, you start getting more page visitors who have higher chances of getting converted into potential customers. 

Here’s a few things you can do 

• Build a GoogleMyBusiness (GMB) account
• Create Facebook, Instagram, and Twitter pages to share posts or get connected with others post in your domain
• Sign up on LinkedIn and connect to industry professionals, put your opinions on their posts and start getting seen 
• Attend property auction events to meet with promising investors and experienced property sourcers and learn about the business more

Step 9: Invest in marketing channels 

Finally, it is all about marketing that will attract property investors towards your business. You need to first understand the demographics, their needs and preferences, and then the demand for properties in different areas. Once you know them, create eye-catching advertisements and post them on social media platforms, LinkedIn, and property listing sites. 

Social media platforms like LinkedIn, Twitter, and Facebook provide you the opportunity to reach out to potential investors and others in the domain. You can use them to share your expertise through articles, valuable insights, and videos on the real estate market, to build a personal brand. 

Another great way of getting clients is through word-of-mouth so you must be careful about the reputation of your business and provide the best-in-class services that make you different from your competitors. 

Additionally, you can collaborate with other property professionals in the market that can help you build your network. For example, if you work with real estate agents or mortgage brokers, you can tap into their client base. 

How to start a property investment company in the UK?

To start a property investment company in the UK you need to follow the below steps.

Step 1: Have a proper business plan

Your business plan must include how you want to invest, who your target demographics are, your long-term goals, funding strategies, and marketing plans. For beginners, having a proper business plan can be difficult. At Pluxa Property, we arrange one-to-one strategic calls with top property experts who can assist you in developing the right business plan. 

Step 2: Choose your business structure

Understand what’s the difference between a personal and a limited company-owned property. Ask Pluxa Property to assist you in deciding what business structure will suit your requirements the best, what licenses to get, and all the legal and tax requirements you need to fulfil. 

Step 3: Understand your funding options

There are multiple funding options for property investment businesses. You can start small using your savings, and then take out a bridging loan to refurbish the property and resell them at a higher price to refinance. You can also take mortgage loans on your next property purchases but its interest rate can be higher for limited companies. 

Pluxa Property experts can assist you with strategizing investment strategies, such that you can earn greater ROI (Return on Investment). 

Step 4: Start sourcing and analysing top properties 

You can use tools and platforms to streamline the sourcing and analysis of top properties and help investors make the best decision. We can assist you with this as well. Our experts have 10 years of experience with hundreds of property dealings and can help you find the right properties in top locations and negotiate with landlords for lower prices.

Step 5: Use marketing channels to find tenants or property investors

Setting up a business is not sufficient; you need a regular flow of top property deals and promising investors.

If you are collaborating with us, you don’t need to worry about marketing. Our team uses the best marketing channels including the top property listings for best property deal sourcing and tenant sourcing. 

You can also join The Property Investor Show in London which is one of the top events in the UK for ‘hands-on’ landlords and passive property investors. It will give you a networking opportunity, and obtain reliable and updated property market information, and details on properties to buy. 

Step 6: Know about the taxes

The best thing about setting up a property investment company rather than holding a property personally lies in the tax payment. In such a case, your company will pay the corporation tax, instead of you paying income tax on your rental income from the property. The corporation tax rate ranges between 19%-25% which is lower than the income tax rate in the UK. 

Additionally, property investment companies, set up as limited companies, can deduct allowable expenses from their rental income, reducing the amount of profit, and the amount of corporation tax. 

If any property valuation goes beyond £500,000, your company needs to pay the Annual Tax on Enveloped Dwellings (ATED) on those residential properties. 

👉Check out our new complete guide on how to start a property deal-sourcing business.

How to find investors for property sourcing?

To find investors for property sourcing business, you can follow our step-by-step instructions.

Step 1: Excel in property sourcing 

Learn the basics of property sourcing, especially gain knowledge of your local market from area-based property value and rental rates to emerging property trends. You can invest time in walking neighbourhoods, attending property auctions and engaging with estate professionals to learn about property sourcing. 

Step 2: Build a good property portfolio 

A good property portfolio must include different types of properties you are sourcing including HMOs, 1-bed or 2-bed apartments, studio apartments, family homes, etc. Additionally, you must put proper details about these accommodations like where they are located, what are amenities available nearby, availability of any educational institutions, airports, business hubs, tourist attractions, etc. nearby, and so on. Use professional photographers to take better images of the property. 

Step 3: Use specialised data tools for better insights

You cannot do everything manually and modern tools are your solutions. For example, PropertyEngine, Nimbus Map, etc. They provide you with better insights into different properties before investing. Another solution is using the Pluxa Property platform for property investments. We assist you in finding properties at the best location, negotiate with landlords for discounted prices, and inform you about properties faster than your competitors. 

Step 4: Build a good reputation 

Ask your customers to leave feedback about your services on your website. This will create a sense of trust among investors when they look for reliable property sourcers. Also, you can build authority in the market by sharing valuable information, and articles on property trends and investment. This makes you rank higher on Google search results and attract investors. 

Step 5: Advertise on different platforms 

Use different advertising platforms to showcase your business and its services to attract people. Start with your family members and within your social circle to build a good portfolio for other investors to step into your business.

Step 6: Establish a good online presence 

You can create LinkedIn and Facebook accounts to source investors to your business. Share your work on these platforms along with a link to your official website and let visitors check out what you provide and how it will help investors achieve their target. 

Step 7: Attend property networking events

Join different property networking events like local auction events, seminars, and get-togethers to learn about new trends and meet with potential investors. We have found one interesting event that you can join, the National Landlord Investment Show. It connects thousands of property experts throughout the UK and is a great place for anyone interested in the buy-to-let or private rental sector. 

Step 8: Learn to present deals properly

Once you acquire a few investors, you must pitch your deals to attract them. Make sure you have a good pitch, mentioning all your advantages why investors must choose you and how you think yourself is different from other property sourcers. You must be a master of property deal packaging which comes after property sourcing. It involves grouping and presenting all the necessary property information in a way that investors can understand.

Find profitable and high rental-yield property deals in the UK

Pluxa Property is one of the most experienced property sourcers in the UK that helps investors find profitable properties in areas with high rental yields. We have walked the walk and made the mistakes that beginner property investors do, and therefore can guide them thoroughly to make the right choice. 

We not only do the market research for sourcing properties throughout the UK but also analyze how they will perform in future, negotiate with landlords to close deals at low prices, assist with property refurbishment, and source reliable, high-quality tenants for better revenue generation. 

FAQ

How much does a property sourcer earn?

A property sourcer earns around £20k – £34k per year according to a Glassdoor survey. Their national average salary in the UK is £25,701. However, this salary can vary depending on the location, demand for property investment, type of property you source, number of clients you receive, etc. 

The first few years may be difficult for a property deal sourcer in the UK but once you start gaining experience and developing yourself, you won’t stop getting high-valued investors. 

How to be a compliant property sourcer in the UK?

To be a compliant property sourcer in the UK you must follow the rules and regulations mentioned in the Estate Agents Act 1979. 

It includes registering with HMRC, ICO (Information Commissioner’s Office), Property Ombudsman, anti-money laundering scheme, getting the right insurance, and signing property sourcing contracts. Additionally, it is good to register with a professional body like NRLA (National Residential Landlords Association). 

What qualifications do I need to be a property deal sourcer?

To be a property deal sourcer you don’t require any specific qualifications but certain skills are necessary. These are networking, negotiation, communication, attention to detail, time management, and analytical skills. 

How do I find profitable property deals in the UK?

You can find profitable property deals in the UK using different property sourcing platforms like ours. At Pluxa Property we aim to bridge the gap between landowners and property investors. You don’t need to spend time and effort analysing properties and finding the right one that suits your requirements, we do it all. 

Also, we help you negotiate prices and terms with the landlords to ensure you find off-market properties faster than your competitors and at a lower market price. 

What’s the difference between a deal sourcer and a real estate agent?

The difference between a deal sourcer and a real estate agent lies in the role they perform. A deal sourcer often works for an investor to find the best property, negotiate with the landowners for their clients’ benefits, and get paid by the investors. 

On the other hand, real estate agents usually work for landowners to sell their property to reliable investors, and get paid by the landowners, a part of your income from selling the property.