PROPERTY SOURCING PROFITS- Part 4: PACKAGE THE DEAL

 In Articles, Investment, Money

STEP THREE: How do I present the deal to investors?

So, you’ve found your first deal. The numbers stack up and your offer has been accepted. Now comes the most important part, sourcing process—packaging up your deal into an investment-grade opportunity that you can monetize. This quite simply involves transcribing the amazing deal you’ve secured on to paper (or a digital version), in an easy to understand format, so that an investor can review it and decide whether to purchase the deal.

Remember, this is your opportunity to market and sell your deal to an investor so it’s important that it’s packaged effectively. You should ensure it is well presented, with clear calculations, and that the due diligence and creative opportunities associated with this property deal are well explained and substantiated.

As a litmus test of sorts, it’s always good to have someone who has no understanding of the deal look over it for you. If they have any questions, you probably have a gap in your explanation.

Your Source Pack should contain:

The Property

Provide a brief description of the property, including all important details—the type of property, number of bedrooms, number of bathrooms, size of garden, parking facilities etc. Describe the current condition of the property, what work needs doing and any creative ways you might add value. Where possible, include photos to give your potential buyer a better idea of what they’re purchasing—no one has ever dated someone without a profile picture! Finally, describe possible exit strategies for the property; for example, as a buy-to-let it cash-flows £280pcm, as a flip it offers a profit of £11,000.

The Area

Next, provide a description of the area in which the property is situated, including the distance to local schools and amenities, any notable employers or towns within commuting distance and any local transport links. This is your opportunity to demonstrate this property is suitable for multiple individuals; from the single professional commuting to work, to first time buyers looking for their family home. Be sure to include the following details:

Local Schools |Transport links | Developments | Distance to town centre |Local amenities

The Numbers

To provide a property investor with the details they need to decide whether a deal works for them, the numbers have to be simple and easy to follow. Be sure to include market comparable to substantiate any estimates or assumptions. We have continually refined our packaging criteria and now include all of the following:

FLIP:

Purchase Price | Expected Re-sale Price | Refurb Costs | Entry & Exit Legal Costs | Stamp Duty | Broker Fee | Source Fee | 6 Months Bills & Mortgage | Estate Agent Commission

RENTAL:

Asking Price | Agreed Sale Price | Done-Up Value Estimate | Refurb Costs | Flip Profit | Cash Flow @ 3%| Cash Flow

For more details on this process we run a Sourcing academy :  https://www.sourcemyproperty.com/academy/

STEP THREE: How do I present the deal to investors?

So, you’ve found your first deal. The numbers stack up and your offer has been accepted. Now comes the most important part, sourcing process—packaging up your deal into an investment-grade opportunity that you can monetize. This quite simply involves transcribing the amazing deal you’ve secured on to paper (or a digital version), in an easy to understand format, so that an investor can review it and decide whether to purchase the deal.

Remember, this is your opportunity to market and sell your deal to an investor so it’s important that it’s packaged effectively. You should ensure it is well presented, with clear calculations, and that the due diligence and creative opportunities associated with this property deal are well explained and substantiated.

As a litmus test of sorts, it’s always good to have someone who has no understanding of the deal look over it for you. If they have any questions, you probably have a gap in your explanation.

Your Source Pack should contain:

The Property

Provide a brief description of the property, including all important details—the type of property, number of bedrooms, number of bathrooms, size of garden, parking facilities etc. Describe the current condition of the property, what work needs doing and any creative ways you might add value. Where possible, include photos to give your potential buyer a better idea of what they’re purchasing—no one has ever dated someone without a profile picture! Finally, describe possible exit strategies for the property; for example, as a buy-to-let it cash-flows £280pcm, as a flip it offers a profit of £11,000.

The Area

Next, provide a description of the area in which the property is situated, including the distance to local schools and amenities, any notable employers or towns within commuting distance and any local transport links. This is your opportunity to demonstrate this property is suitable for multiple individuals; from the single professional commuting to work, to first time buyers looking for their family home. Be sure to include the following details:

Local Schools |Transport links | Developments | Distance to town centre |Local amenities

The Numbers

To provide a property investor with the details they need to decide whether a deal works for them, the numbers have to be simple and easy to follow. Be sure to include market comparable to substantiate any estimates or assumptions. We have continually refined our packaging criteria and now include all of the following:

FLIP:

Purchase Price | Expected Re-sale Price | Refurb Costs | Entry & Exit Legal Costs | Stamp Duty | Broker Fee | Source Fee | 6 Months Bills & Mortgage | Estate Agent Commission

RENTAL:

Asking Price | Agreed Sale Price | Done-Up Value Estimate | Refurb Costs | Flip Profit | Cash Flow @ 3%| Cash Flow

For more details on this process we run a Sourcing academy :  https://www.sourcemyproperty.com/academy/

 

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