What is property deal sourcing and deal packaging?

Property deal sourcing is finding property deals and introducing them to investors for a fee. Deal packaging goes a step further: the sourcer also prepares everything the investor needs to proceed, such as the full deal analysis, refurbishment plan, finance options and a letting or management plan. Sourcing finds the deal. Packaging makes it ready to buy.

Here’s how each works, how sourcers earn, and the rules that apply.

Key takeaways

• Deal sourcing means finding a property deal and introducing it to an investor.
• Deal packaging adds the analysis, plans and contacts the investor needs to complete.
• Sourcers earn a fee from the investor, usually paid when the deal completes.
• Anyone charging a sourcing fee must be properly registered and compliant.

What is property deal sourcing?

A deal sourcer finds properties that suit an investor’s strategy, checks the numbers and introduces the deal. The investor buys the property. The sourcer is paid a fee for finding it.

Investors use sourcers because finding good deals takes time, local knowledge and contacts they often don’t have, especially if they live elsewhere or work full time.

What is deal packaging?

Deal packaging is sourcing plus the work needed to make the deal ready to buy. A packaged deal might include:

• Comparable sold prices and a valuation estimate
• A refurbishment plan with quotes
• Rent evidence and a letting plan
• A full breakdown of costs and returns
• Introductions to solicitors, brokers, builders and letting agents

Because it saves the investor more time, a packaged deal usually commands a higher fee.

Deal sourcing vs deal packaging

How do deal sourcers make money?

Sourcers charge the investor a fee, typically £4,000 to £10,000 per deal depending on the work involved. It’s agreed in writing before the full deal is shared, and is often collected upfront and held in a client account until exchange of contracts.

Many sourcers earn extra by helping investors with what comes next, such as refurbishment or letting.

What types of deals do sourcers find?

• Below market value property
• Buy to let properties with strong yields
• HMOs and HMO conversion opportunities
• Serviced accommodation
• Refurbishment and flip projects

Is deal sourcing regulated?

Anyone charging a sourcing fee must:

• Be registered with HMRC for anti-money laundering supervision
• Be a member of a property redress scheme
• Be registered with the ICO for data protection
• Have professional indemnity and public liability insurance

Investors should always check these before paying a sourcing fee.

How to get started

If you’d like to become a sourcer, our step-by-step guide on how to become a property deal sourcer covers everything from compliance to finding your first investor.

Frequently asked questions

What is a property deal sourcer?

Someone who finds property deals and introduces them to investors for a fee.

What is the difference between deal sourcing and deal packaging?

Sourcing finds and introduces the deal. Packaging adds the full analysis, plans and introductions the investor needs to complete.

Is deal sourcing a good business?

It can be. It doesn’t need capital to buy property, but it does need skill, compliance, consistent marketing and investors who trust you.

Do you need a licence to deal source?

There’s no single licence, but you must have HMRC AML supervision, redress scheme membership and ICO registration before charging fees.

Build a deal sourcing business

Sourced Property Partners get the training, tools and investor network to source and package deals professionally.

Build a deal sourcing business with Sourced