PROPERTY INVESTING | STARTER COURSE |
Lesson 4 -
SOURCING SUITABLE PROPERTY
Its time now to start looking for a property, but not just any property you understand, some suitable property.
The central theme here is that it is right for you and your strategy.
Prefer to read this lesson as a pdf?
By now you’ve had some time to reflect on previous lessons and are now ready to move forward on to another step, right?
what constitutes a suitable property?
Wow, that’s a great question, we can certainly shed some light on that for you.
The central theme here is that it is suitable for your strategy! Not for us, not your friend who’s been investing for ten years and definitely not what you’ve been led to believe is good by watching episodes of homes under the hammer or dream-selling videos on YouTube.
A suitable property is one that fits your strategy, one that ties in with what you are trying to achieve long-term. A suitable property for us here at WiseOwl may be entirely different to a suitable property, even for us, as private investors, individually. No two strategies are ever exactly the same, and this, in turn, is good news; it means that every investor will find a different part of each investment property appealing.
If you started on your journey without laying the correct groundworks, then you would end up in the ever-increasing overpopulated ‘middle ground’ pool whereby a property is purchased because you’ve been led to believe that is what investors do.
Buy low, refurbish for equity and rent high, sound familiar?
Yes, it’s a good strategy, and it can prove a very suitable and profitable approach, but the opportunities in the industry have changed so much over the last few years that it may not always be the best option for you…. personally, that’s all we’re saying.
If you adopt the approach that we suggest and follow our guidance so that you are able to determine a suitable strategy for yourself, it will make your journey a whole lot smoother, faster, more profitable and definitely more enjoyable.
Let's take a look at,
some examples of suitable property...
Ok, so this is something we can certainly help you with. As a generalisation, the main reasons why most of us invest in property are usually time, financially or lifestyle bounded.
This list could go on and on, but our point here is not that there are too many suitable properties out there that it would be far too hard for us to tell you, categorically what the perfect house is, although this is the case. It’s that by implementing your plan in the correct strategical manner that we suggest throughout this free course, you will, in turn, be pointed or lead to the answer you seek as a result of this approach.
Although we do not condone animal cruelty in any way whatsoever, we do acknowledge that if we had to, there would be more than one way in which to skin a cat. That said, I am sure you will agree with us when we say that there must be far better ways than others. Adopting the correct approach from the start will produce a better yield in the long run, guaranteed!
Where to find suitable property?
Please, please, please don’t get overly concerned about finding the perfect, undervalued, bargain of a lifetime. It will almost certainly never happen, especially in the beginning.
It is far more important that you get started with your journey rather than hanging around waiting to strike gold.
Careful planning, correct mathematics and more importantly physical action will always out-way waiting for the perfect deal.
Hopefully, we all now agree that we will seek out different kinds of investments. However, there is an equal number of bad investments out there also, and that is something we can help steer you away from.
Regardless of your strategy, mitigating any obscurity, certain things must meet your criteria when looking for a suitable property.
General Rule of thumb
Take a look at our list below, some may sound obvious, but they will all collectively help guide you and should be used as a general rule of thumb.
Where to look?
There are more and more avenues becoming available these days for investors to source property. Most can be done right from the comfort of your own home and with minimal exertion.
Your carefully worked strategy will dictate the best medium for this, and it may even be that you simply plan to hand this over to either a sourcing company or a to a joint venture partner, either way, we have for your convenience a list of possible avenues.
Wait for it; this one will change your life…… Rightmove, yes Rightmove. Breaking news right? Ok so maybe not but it is perhaps the best medium for sourcing property.
- Auction houses; there will almost certainly be an auction house within 30/40 miles of your front door. As more and more property gets sent to auction it’s not only the fixer-uppers that can be found here. Tread carefully though; there is usually a more considerable capital outlay initially.
- Sourcing companies: there are many companies out there that will source property based on yield or ROI. Some will even offer a renovation and management service to follow. Word of caution however you must always use due diligence when using such companies, it pays dividends to find out a little about their services and experience before you buy from them.
- JV Partners; JV stands for Joint Venture, and there are many different types of JV partners. Some will use all of your capital entirely, but they are experts in DIY and may be able to manage the investment after that. Some are the complete opposite and will put you on the map without having to spend a penny so to speak & others may split everything straight down the line . You can find JV partners through Facebook, networking events online forums or by heading over to our Website to see how you can JV with us!
- Agents windows, Facebook, newspapers & local landlord associations are other avenues
So should you wait for the next BIG opportunity or should you just go find one?
My book ‘The complete no-nonsense guide to becoming a UK property investor’ goes into each avenue in great depth, demonstrating the pros and cons of each factor that goes into sourcing property and we do expand considerably on every aspect in our classroom based courses.
Believe it or not, being a successful property investor isn’t actually about that fantastic property you just managed to get for 10k under the asking price, in-fact we would place it quite far down our list.
It is important to get a good value property, but there are many properties available that are perfectly suitable. If you intend on becoming a serious property investor there are more pressing issues than securing an undervalued property, remember it’s only undervalued in the current climate. ACTION will always trump everything else you do.
ACTION should always form the basis of your strategy being goal setting, financial or sourcing. There is of course one exception to this rule and that is if you are buying to refurbish to release equity further down the line, then in this instance this becomes paramount.
You see why we keep banging on about the strategy being RIGHT FOR YOU?
Here's a summary of this lesson and your next steps to take ACTION!
You must take action right now. Go! Go! Go!
It is important to get a good value property, but there are many properties available that are perfectly suitable. A suitable property is one that fits your strategy, one that ties in with what you are trying to achieve long-term.
And remember no two strategies are ever exactly the same, this is good news; it means that every investor will find a different part of each investment property appealing. If you adopt the approach that we suggest and follow our guidance so that you are able to determine a suitable strategy for yourself, it will make your journey a whole lot smoother, faster, more profitable and more enjoyable.
Our point here is not that there are too many suitable properties out there that it would be far too hard for us to tell you, categorically what the perfect house is. Don’t get overly concerned about finding the perfect, undervalued, bargain of a lifetime. It will almost certainly never happen, especially in the beginning. It is far more important that you get started with your journey rather than hanging around waiting to strike gold.
- Decide on your strategy first – The strategy you decide on will influence the area you look to buy in. If you are looking at building a sustainable portfolio your area may be different from the one you decide on to flip properties.
- Look locally first – If we were to look at the whole of the UK we would need an army of sourcers to provide the level of quality we depend on. Buy to Let investors that want to source for themselves should analyse their local area and then select a location they believe has merit. Being location specific means, you can monitor prices and react immediately when an opportunity arises.
- Do your due diligence – Due diligence is not something to take lightly. We live in a technological age with huge amounts of information at our fingertips. Use it wisely but also know when enough is enough, so that you can take action.
- Run the numbers – One of the biggest mistakes new investors make is not taking into account the costs attributed to running an investment property. Service charges, ground rents, council tax, income tax and void periods are all things that need to be considered when looking at your net position from an investment. We see so many instances of investment companies offering a “gross yield”. Work your figures on what your “net” (take home) amount is.
- Leverage professional services – To successfully invest in property you need to be in receipt of all the facts. To do this you will need to speak to people that can give you this guidance. A good mortgage broker is worth every penny, they can give you guidance on suitable mortgage whilst taking into account your long-term strategy. Up front fee’s, early redemption penalties and the type of vehicle you are buying your property in will all have a bearing on the best mortgage for you. A good broker can give you that advice. If you are looking to build a portfolio it may also be worth talking to a good tax specialist, they will outline the pro’s and con’s of investing through a company and also may give you a facility to use for all of your bookkeeping.
- Make yourself known – It’s no secret that people buy from people and being top of your local estate agents go to list when an opportunity arises is worth its weight in gold.
- Knock on some doors – Whether it’s for development or investment, spotting an opportunity and knocking on doors is often the best way to pick up those bargains before they hit the market. If the owner isn’t available, I often use land registry to find them before getting in touch. Land registry should give you an address for them.
1.) Do some due dilligence within your local area. See what’s available and start to devise a list of potential opportunities.
2.) Run the numbers on a few of the key properties found and see if they fit your strategy goals and budget.
3.) Revisit your list from lesson 3 and seek out the people from your list who you could approach to leverage funds and set a time to contact them and work through some options.
4.) Contact local estate agents and get known. Ask them to add them to their contact list should anything become available.
"Try viewing everyone that comes into your life as a teacher"
- Wayne Dyer
If you’re a property investor, you’ve likely heard of David Tarn (WiseOwl Property). His list of credentials is lengthy, and if he really wanted to, he could go on and on and on about his accomplishments.
But when people list out all their accomplishments in their bios, they risk sounding a little egotistical. This isn’t Davids style. Sure, you might impress a handful of people with all those laurels, but many people who read the bio will end up feeling either intimidated or annoyed. Think about it, why do you want to read about how great someone else is, don’t you see enough of that on Facebook?
To minimize the egoism that comes with talking about yourself, here are David’s accomplishments without sounding like bragging. David has been investing for almost 15-years and has built a hugely profitable portfolio. He owns a self-start lettings agency, mentors, trains and coaches very well and rides an enduro mountain bike like a pro. He is 1 part executive, 1 part entrepreneur, 1 part mentor and 4 parts proud dad. Too many parts, maybe that’s the maverick in him?