For those of you old enough to remember Woolworths’s heyday, it had cornered the market in the ‘one-stop shop’ sector. However, after enjoying years of great success and growth, Woolworths began a steady decline from the 1960s until its final demise in 2009. It is claimed that Woolworths failed because they didn’t listen to their customers, underestimated their competitors, and failed to progress with the changing times. Basically, they didn’t see what was coming until it was too late!
What has this got to do with property sourcing and deal packaging?
We believe that the property sourcing and deal packaging sector is heading in the same direction.
While the decline of Woolworths happened gradually over 40+ years, a similar demise occurred to Blockbuster Video, but over a much shorter time. They didn’t adapt to the market and customer needs and lost out heavily to Netflix, formerly ‘LoveFilm.’ With an estimated 15,000+ sourcers and deal packagers currently operating in the UK, and thousands more each year being churned out of property courses, the sourcing and deal packaging sector is well along the road of that declining timeline. With sourcers and deal packagers being told that they can cover the whole of the UK, for every strategy ever conceived, with little or no in-depth geographical or detailed strategy knowledge, topped off with a scary lack of understanding about the law and how to operate legally and professionally day to day, you have a recipe for disaster.
An Overcrowded Marketplace: What Sourcers and Deal Packagers Must Do to Survive
From conversations we have almost weekly through our support calls, it’s clear that a significant number of those completing courses fail to find an investor to work with and earn little or no money at all through their businesses. You see, when they emerge from the training with all the positivity and energy that they can muster, within a few months, it becomes apparent to most of them that things are not as described to them, and the struggle to earn even one fee feels like an almost impossible task.
When you come out into a marketplace that is 15,000+ strong, the vast majority of them working from the same scripts to approach estate agents, letting agents, sellers, and investors, and the same templates to attract sellers and advertise deals, you are entering an overcrowded marketplace. Not really knowing your customers or competitors, and completely unaware of the ‘changing times’ that are already upon us, or what is coming to the ‘property sales’ sector.
Just like Woolworths should have done, the sourcing and deal packaging sector has to adapt and change with the times or collapse. Sourcers and deal packagers must start to listen to their customers, understand market conditions, be aware of what their competitors are doing and saying, and stay right up to date about sector changes that are and will affect their businesses. They have to stay ahead of the curve if they want success, and so they MUST be ‘Inventive’!
So, What Does Being ‘Inventive’ Mean?
I – Invest in your knowledge of your chosen geographical area and the investment strategy you will support an investor with. Ensure that you are fully aware of what it takes to operate legally on a day-to-day basis. Don’t trust advice from Facebook groups, training courses, or networking events; the vast majority is poor at best and, in the main, completely inaccurate. Get to know your competitors—what is their message, and how can you set yourself apart from them? This will give you the confidence to talk to potential investors about your day-to-day operations, your area, strategies, and how you will work with them.
N – Niche your geographical area and investment strategy. What works well in your area and where? A few streets or several areas? There will be ‘sweet spots’ where any strategy works to an optimum level; find them and understand them. Perhaps think about niching in a different way to others—focusing on bungalows, for example.
V – Visibility. Increase your visibility on social media—not by selling, but by informing. Share content about your area, strategies, and what you are doing for a current investor. Possibly create a newsletter about your strategies in your area for people to sign up for.
E – Expertise. Make yourself the expert in your geographical area and chosen strategy within that area. Become the ‘go-to person’ to answer questions. Make yourself the only choice for an investor who wants to use a sourcing agent in your area for your chosen strategies. This will take time but will eventually make your marketing predominantly ‘word of mouth,’ with a waiting list for investors to join.
N – Negotiation. Learn negotiation skills for working directly with sellers or through other agents. This is an essential skill set if you are to progress your business and is often not mentioned.
T – Trust. Building trust with potential investors is key to having a long-lasting relationship with any client. Trust is not always given easily or quickly, so patience may be required. Remember that trust is a two-way street. We come across many sourcing agents who have been taught to ask for a large fee upfront so that the investor doesn’t go behind their back and steal a deal. But doesn’t that give the impression that you don’t trust that person while expecting them to trust you? Think about that for a while…
I – Income. Look at ways to develop multiple income streams from your sourcing business. Perhaps monitor a refurbishment project for a client. (Note: I said ‘monitoring,’ not ‘managing.’ The vast majority of sourcing agents don’t have the knowledge and skills required to ‘manage’ that task legally.) You could offer a viewing service for an investor, carrying out the viewing of a potential property for them and/or creating a report and video for a fixed fee. NAPSA is launching an affiliate programme, where members can recommend NAPSA to other agents and earn a fixed fee for each one that signs up for membership.
V – Video. Gaining traction and reaching more people via social media channels is becoming harder and harder to achieve. One of the best ways to gain more reach and get more interaction is through video content. A lot of sourcing agents, just at the mention of creating videos, run to the hills in fear. But it doesn’t have to be scary, and it certainly doesn’t have to be perfect. You don’t have to appear on camera if you don’t want to. Film yourself walking around your patch, going to a viewing for an investor, or visiting local agents for a chat. Or chat about what you have been doing that week—taking the dog for a walk with the camera on the surrounding area and your dog!
E – Experience. All the previous points lead to you gaining experience, and with experience comes confidence. When you know your area like no one else, when you understand your strategies on a street-by-street basis, when you know what your competitors are doing and saying, when you have a clear process for onboarding potential investors and sellers, and when you allow trust to build, you will speak in a completely different way to both sellers and investors. Networking becomes something you actively seek out and enjoy.
Final Thoughts
If you are starting out in the property sourcing or deal packaging sector, you obviously want to set up and run a business that will pay you to run it—or what would be the point?
What has worked in part for the last 12+ years that I have been involved in the sourcing sector will not work now and going forward. The sector has to adapt and change to meet not just compliance today, but also what is on the horizon for the next 2–3 years. If we don’t adapt, the sad stories that we hear every week of sourcing agents earning no money at all and investors losing hundreds of thousands of pounds every year will increase.
As an investor, why not seek out those agents who have got ‘Inventive’? You will know from talking to them what their level of knowledge is. So start to filter out the ones who are just in it to get a few thousand in the bank, and build long-lasting relationships with those who are willing to take the time to learn a set of skills that, in the end, benefit you as much as them.
If you are at all concerned, please don’t hesitate to contact the team at NAPSA, who are happy to advise and support you.
W: https://NAPSA.org.uk/
