Opportunities In The Property Business – The Property Finder

These days it seems that everybody wants to get into the property market. With the current high property prices however it’s hard for first time property entrepreneurs to enter the market as few can afford the deposit required.

The answer then is to become a property finder. A property finder looks for properties that would be ideal purchases for either developers or investors, negotiates a price for them and them passes the deal onto the developer/investor in return for a finders fee or between 1 and 2%.

It’s a great way to get into the property business as:

• Low cost – your only cost is your time spent looking for deals.
• Experience – while hunting for deals and selling them on the other investors/developers you’ll refine your understanding of what is a good deal and what isn’t.
• Build up a cash pile – several successful deals would then enable you to build up funds for a deposit to explore your own deal.

So how do you find the deals?

• Register with estate agents and explain what you’re looking for. You’ll need to really work on developing your relationships with them in order for them to refer deals to you.
• Network with people in the industry, solicitors, mortgage brokers, estate agents, conveyancers, property investors and developers and make them aware of what you do. Sometimes they’ll have a sale fall through and be grateful for someone who can quickly step in.
• Visit property auctions. Don’t bid at auctions but look for lots that don’t sell.
• Leaflet drops to your target market letting people know you can arrange a private sale.
• Create a website targeting those looking to sell a property – a quick bit of keyword research will reveal a number of suitable searches.

You can continue acting as a property finder even after you are able to pursue your own deals, by selling on deals that you come across that are outside your area of interest.

This post is part of my property business opportunities series.

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• 1

  The article paints a much simplified version of the finding/sourcing business, but highlights a business one get enter with relatively low start up and running costs. I’m saying this as one in his 4th year of trading finding UK residential development opportunities for property developers in the S.E. of England.

  As with any business, this is a lot more complicated than it initially appears with the planning system and its process needing to be understood. All development opportunites require planning permission so you’d better get up to speed on this asap if you plan on getting involved.

  Another tip would be to network as much as possible with people already in the industry. Forget estate agents. I’ve NEVER seen a good deal come from a high street estate agent. Buyers want ‘off-market’ deals, not sites that have been exposed to the world. When they’re small conversion/renovation type deals they come with a whole army of competitive amatuer buyers after them. Join a local business group like BNI to really tap into the local community and deal with the people who own the land direct to retain control.

  Tim Coe on July 14th, 2008
• 2

  Been offered an opportunity to be a property finder for an investor. As with most investors they focus on trying to find ‘distressed sellers’, people who are about to be repossessed mainly, or going through a divorce for example…

  2 things concern me;

  It’s commission only, and I’m sure there are loads of other people out there looking also. Is it really possible to find enough of these type properties to make a good living.

  Is it right? I know business is business, but part of me feels like I’d be making money out of other peoples mis-fortune, by taking advantsge of their weak situation. On the other hand, they could loose their homes, so maybe seeling cheap to an investor who will rent it back to them isn’t so bad?

  Any opinions?

  Dean on April 14th, 2009
• 3

  Dean

  This usually a commission only business. Why would anyone pay you BEFORE you’d shown them results…would you? You’ll need at least 6-months of money to survive on before you can seriously expect to do any deals and receive money. You could do a deal tomorrow purely by chance but the money will take a few months to filter through to you. Be realistic about lead times.

  Finding the properties is the key of course. YES, there are enough to make a living, but finding them is key and hence why the fees of 2% seem good for finding one property and introducung one buyer. You might have to go through 50 potential deals before one comes off. There’s so many thnigs that can make a deal fall apart.

  Get real, business IS business. What do solicitors do….they sort of other people’s problems for money. You’re dead right when you say they could lose their homes if you don’t find them an investor type buyer. That’s the best way to help them out. They’ll be able to rent the house off the new owner and the buyer’s got a brilliant tenant who’s going to look after the house4 like it is their own…which up until very recently, it WAS their home. They’re hardly going to view the house differently now are they? It’s such a win win situation.

  However, finding these people in distress is hard and you’ll need to advertise….along with everyone else who advertises in local papers. These people will be able to make offers faster than you if you then need to find a buyer yourself, so save yourself a whole lot of time and find an easier business than this…I have.

  Tim Coe on April 14th, 2009
• 4

  Hi Tim,

  Thanks for the comments.

  I’ve recently been made redundant and therefore trying to come up with something. I’ve got a background in property and so this seemed interesting to me, as I’d like to build a portfolio myself eventually.

  I have an investor who is ready to buy, and specifically advertised to recruit some ‘finders’. I’m used to basic + commission roles, and so commission only is a bit daunting especially now, not to mention an estimated 6 months before I’d see any returns.

  Dean on April 14th, 2009
• 5

  I’m only saying 6-months to be pessimistic. It could be longer though. These things do not happen overnight. I wish they did, believe me. You can get lucky but usually you are unlucky in these deals. So it’s not unlucky at all, it just becomes normal.

  They are thousands of portfolio buildiers out there. All those other people who will be advertising for people who are about to be repossessed are looking to build portfolios so there’s some to begin with.

  Leaflets is another way of finding these people who are in arrears to the point of repossession, but it’s a lot of work for a small response. As I said befroe, finding people who are ready to admit to a stranger they’ve f**ked up and are losing their home soon is no easy task…think about it. Would you reveal all easily and before you had to? No! You’d leave it to the very last minute, probably when there was not a lot of time to stave of the lender.

  Good luck with whatever you decide to do…all I’m sdaying is there are easier less crowded market places to operate in. This businesses bubble has burst in my opinion in that everyone knows about it know. It’s not new. A lot of competition exists for the same people/properties. The property values are low and therefore the finder’s fees are low. Developers will pay a 2% fee for land, but investers usually only want to pay 1% so again, you’re being squeezed from all sides.

  Tim Coe on April 14th, 2009
• 6

  It doesn’t paint a great picture. I imagine it would be tough to find these deals taking into account everything that you mention. Like you said, I was offered 1% finders fee.
  Still though, I am curious about learning how to build a personal portfolio this way. WIthout doing it like this, you need a hell of a lot of capital which less face it, isn’t easy to come about especially in this climate!
  What are these ‘easier, less crowded market places’ that you mention?

  Dean on April 15th, 2009
• 7

  Dean,

  In the current market I’d leave this well alone, there’s too many others doing it and the margins are being squeezed all around.

  However if it interests you why not try selling to the businesses that are already in the market, i.e. start a leaflet distribution business. You’ll start building up an income (and hopefully some capital) and you’ll still get to learn about the industry.

  Other than that take a look around the site there’s a few other business ideas on here, some to do with property.

  John on April 15th, 2009
• 8

  Hi Dean

  The other markets I refer to are not anything specific. I was referring to anything else really where there are not so many people doing the same thing. I mean, if you’ve got 2-4 people all advertising for people who are about to be repossessed in the same local paper it tells you something right? If you’ve not got all those people advertising then you’re in with a shout, but my point is that there have been incredible interest in this sector in the past 5 years so you’re getting in on the back end. Not a good place to start.

  John’s idea about starting a leafelt distribution business for other properrt buyers might not be your idea of what you wanted to do, but he makes a good point. You will learn from others whilst still getting paid, as if you do it on your own you’ll be paying for your own mistakes.

  I have just switched business, whilst still remaining in property. I’m now saving people money when they buy property above £250k by reducing their Stamp Duty obligation. There’s a 100% success rate. I charge the buyers 10% of their saving. A good deal for both sides. I’m offering to share my fee 50/50 with anyone who can refer buyers to me. An example would be a £350k house where you’d receive £263 for pointing someone in my direction if they use the scheme. Food for thought.

  Good luck in wehatever you decide to do.

  Tim

  Tim Coe on April 15th, 2009
• 9

  Thanks again for the advice.

  The idea I guess was so that I could build up my own property portfolio in the long run this way, which should reap big rewards long term.

  I’ve thought about leaflet distribution. I seem to be full of procrastinationa and indecision though which is horrible . One minute an idea seems great to me, then the next it doesn’t. I just can’t seem to make that leap of faith!

  I’ll let you know Tim if I come accross anyone who can save on stamp duty with you. I suspect Estate Agents are the people to talk to here. I used to be one, and that was the big problem with properties that just over the £250k threshold. Should be plenty of business.

  Dean on April 15th, 2009
• 10

  hi i have been interested in being a property finder for around 6 months. i have bought a desk and a mercedes to get me started. i havnt started yet. I bought the mercedes cabriolet 200. so i can aim for the rich and look proffesional as i drop them to there properties. and i want to get my 2%fee on properties over millions of pound. i wanted to advertise and leaflet all properties in rich areas that were selling there house. you said you cant get no money well your forgetting in this buisness you can get a start up fee for up yo £1500. so imagine you get 6 start up fees in 2 months.thats £9000 plus your forgetting your completion fee. thats good money.well i think that it is plus i wont be just doing sales i will do rentals aswell which is a months rent upfront in youtr pocket. i have read everything you said i found it interesting and if you obviously tried the buisness out, then i what can i say. i dont want to waste my time but there arent many property finders in london. this woman in london made millions from the buisness she was single mum then thought shell try the buisness out and now she is rich. e mail me when you can. I dont want to waste my time and money. tahnks for your help.

  kamal on June 18th, 2009
• 11

  oh yeah an another thing, why cant you make money quick when theres a atart up fee. i want a solicter to join me in my work as well. tell me what you think.

  kamal on June 18th, 2009
• 12

  can someone explain me how to start working like a property finder????what is the first step???do i need any permission???do i need to finish any exam????how to start when you are very new in this market,

  mo on March 18th, 2010