What is Property Deal Packaging? How you can make some serious money from it. So if you want to know everything about how to package a deal in the UK property market, then you are at the right place.
What is Property Deal Packaging?
Deal packaging is a professional service in which you provide a package full of services like the research of the area, comparison of the prices with its competition, offers like the most profitable investment-type of that particular area, along with that there can be many offerings related to management as well. If the investor needs cost-effective and less time-consuming investments, the deal should include that too.
Most of the investors want full hands-off investments i-e they don’t want to deal with a tenant or a guest. With that, most of the investors also avoid any kind maintenance issue. This factor makes people confused about the difference between a deal sourcer and a packager.
What does a Property Deal sourcer do?
So let us clear that doubt first, the deal sourcer is solely responsible for finding a suitable property deal for the investors. In contrast, a packager includes all the kinds of services as mentioned above for the investors.
Top skills needed to become a successful deal packaging agent
Deal packaging requires a lot of skills, years of experience and knowledge. But you can learn it as quick as the complex services it demands. A successful deal packager provides 100% service. Here’s what all is needed to understand the deal:
- You need to have a proper understanding of the different types of property investments.
- You should take your own time to know about the criteria of your investor.
- You should always have local knowledge about the deal that you are gaping to provide.
- You have to have a strong team to deal with complexities.
- Try to know the market and grasp the current trends keeping in mind the history and future.
These five pointers can help you provide a valuable service. You should not forget the fact that the investors are putting in money not only to find a proper deal but also get standard results. Property deal packaging can be tedious but can increase your cash flow to extreme levels. You just need to stay focused and work hard.
Some legalities which you must comply with to start a deal packaging business.
You have to register with:
- Property Redress Scheme– all property agents, deal sourcers and packagers have a legal responsibility to fall under the scheme to ensure a fair and just resolution of issues faced by the consumer (if any).
- ICO for data protection
- Professional Indemnity Insurance and Public Liability
- Anti-Money Laundering– you will have to complete a basic AML training where you will learn how to do checks on your investors and where their funds are coming from.
It is the responsibility of a property agent to register with these schemes for the system to recognize your services as legal. If caught without these, there will be very real legal ramifications.
Now that that is out of the way, we can get to the actual deal packaging.
Packaging a deal doesn’t start with diving headfirst into running around and finding good deals. The very first step is to do some background research about your investor.
There are six things you should have answers to post which, you can go ahead and package your deal.
- The area that they are looking into
- What kind of investment are they planning to make?
- The source of their funds
- ROI
- Investment timeframe
- The budget
Do extensive research into each of the questions and obtain valid and reliable information. Once you feel like you have what you need, analyze your data financially and make a report with all your findings.
If you feel like your analysis might be lacking in something, ask for help from someone who is experienced in this field and would know this like the back of their hand.
Make sure your report has everything that your investor needs to see and present your deal to them as transparently as possible. Inform them of the pros and cons of your property, hopefully, the pros outnumber the cons.
If your investors are interested you can proceed with the next plan of action which finishing the deal.
This involves negotiating the price, finding a solicitor or a conveyancer who will be doing all the legal paperwork for you, drafting a contract, coordinating with the landlord, and some last-minute changes you might face.
One great upside to this job is that you get paid upfront for every deal you make. No running around for money for months after the deal is closed.
The investor will pay you if they are interested in the property after your sales pitch. So, make sure you really charm them!
This job with all its legalities and possible fraudulent clients can seem daunting at first.
But as you keep progressing through the successes and the failures, you will be able to face any situation with ease and calmness.
Deal Packaging is an art, and here are some ways that can enhance your procedure of packaging a deal:
- You need to analyse the deal financially. There are high chances that you might not be able to estimate some of the services.
- You need to be clear with the contract. Each deal needs to be mentioned clearly with all do and don’ts. If possible, write terms and conditions with clarity.
- Fresh new properties get a high evaluation, so make sure if you are packaging a deal with not so new property then you should refurbish it and make it look like a new one.
- You should never hesitate to add services that are innovative, new and helpful. Your services should be the most significant support in getting your deal done.
This blog tells you everything about packaging the deal from tips to certain things that you should always keep in mind. We hope this blog solves the problem of the significant confusion between property sourcing and deal packaging. You can also enrol in a professional, free Property Deal Sourcing & Packaging Course to further shapen your knowledge about the UK property market.
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