We extend the conversation around the first of our property core skills: finding deals.
This week is 'discussion week', where I am joined by some of the members of the TPV community.
They share what works for them and what they have learned along the way when it comes to finding deals.
Enjoy the show!
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Transcription of the show
We extend the conversation around the first of our property core skills: finding deals.
This week is 'discussion week', where I am joined by some of the members of the TPV community.
They share what works for them and what they have learned along the way when it comes to finding deals.
Enjoy the show!
Property Chatter
Welcome to the property voice podcast helping you to navigate safely through the world of property investing, get the lowdown and updates, insights, and outcomes on all matters property with a splash of entertainment along the way, the property voice or voice to trust among the crowd. Now, let's get started with your host, Richard Brown.
Hello, welcome to another episode of the property voice podcast. My name is Richard Brown. And as always, it's a pleasure to have you join me again on the show today. This feels kind of weird because I'm actually talking to a panel with my sort of scripted intro. But today we're going to carry on the theme of property, core skill, property core skills. And today we're extending the conversation around finding deals. Last week, we talked in outline, it was just me talking about some general principles about finding deals, finding property deals. And so I've invited a few of my mates to join me in the conversation today. So we've got Sean, Dominic, David, and Carl, who might willing victims, I mean, volunteers to help with the conversation. And then you'll hear and I'm sure about their different angles and perspectives and experience, as we're going to have, you know, wide in the conversation. So this is in reality, how people are working able to find deals for themselves, and or to help find deals for other people. So welcome, all of you. Thanks for joining me today. First of all, Richard, thank you. Thank you. Hi, Richard. Excellent. Thanks for joining me. So what I think we do, we're going to have a more of a conversation. And so it kind of set you up the same what we talked about last week, which was in outline terms, you know, where to find deals, pipeline progression, or deal progression, deal positioning, and vendor alignment. That's what I talked about last week. But I daresay you can add a bit of richness to either some of those things directly or maybe some you can wind the conversation. So let's just start maybe, let's just go around the table if that's okay. And what have you just say a little bit about yourself, just a, you know, helicopter view or elevator pitch about what you do right now? So that we can understand where you're coming from, whether you're an investor developer, whether you're a deal, find a deal source, or you're, you know what, you're a bit of everything. It'd be useful to get that context if you wouldn't mind to kick us off and people can understand when you're talking what perspective you're coming from. So okay. All right. Shawn, you're off the mic already. So do you want to lead us on?
Yeah, no problem. My name is Shawn Thomas. Invest in myself with the buy to let portfolio. And I've also been deal sourcing now for I think we set up about two years ago now. Along with David, who's also alongside is here. Yes, so that's what we're doing in the main now is the deal sourcing really, and just sort of add into to my own portfolio as well.
As good. So basically, you can struggle both camps, can't you say found deals for yourself, and then they help you find deals for the people? That Sean dominates you. You were there waiting on? They'll kill you in? Yeah. How do I go next? Yeah. Hi, I'm Dominic. I've been investing in property since about 2017 or invest in property properties since 2017. So I mean, mostly an investor. So I have a small HMO holiday lap portfolio. We can start sourcing deals myself. So just like using Rightmove or Zoopla, that news reporters try and find good deals. My biggest challenge, though, probably is time because I have a full-time job. So that keeps him busy. So I have been progressing really to using deal sources. And also, I guess, building relationships with estate agents that are used to manage my properties and also magnetic lists of properties already own, which also good kind of potential source of properties if they if and when they do come to sell.
That's good. Sure. We'll dig into that a bit more. Thanks, Dominic. Just David, I can see you're ready to join.
Yeah. Hi. I'm David. I, as Sean said, I work alongside him as a deal saucer. So we have a deal sourcing business that we set up roughly around two years ago. And yeah, the main focus for us is deal sourcing for Specific sets of clients. So we reach on quite clearly understand the client's criteria, and then we try to provide a bespoke service for that set client. And then from a personal perspective, I've just gone to my role just bought my first property, which is I consider an investment property. So the idea is to currently refurbish it at the moment. And then the idea would be to let it out and try and essentially do the same thing. So I'm at the kind of the beginning of the ladder from a personal investing perspective, as well.
Interesting. And we'll maybe come back to your angle from deal sourcing the both you and Shawn operate from you know, you talked about being a bespoke service. So we're, that's not the only way to operate in that business. But it's very interesting one for sure. So we'll come back to that. And that leads call if you'd like to introduce yourself.
Yeah, thanks for the kids. So I'm Carl, I've been a property investor for about 11 years now. Previously, most of that time has been spent by to that portfolio for which I've used on the whole deal sources. I'm particularly interested in this conversation, though, because more recently, I've established a business for the purposes of developing property, via converting the commercial property into residential, and a large aspect of that business finding the deals. So that's what I've been spending a lot of my time on recently. Unlike Dominic, I do have maybe more time to focus on this. So. So I am looking for deals myself. So that's where I spend a lot of my time is finding those leads.
Sounds good. Thanks, Carl. Okay, great. So now we've got a picture, if you like of who, who's on this episode tonight, and what their background is and what their sort of angle emphasis is. So that's a bit of context, which is great. So unless you've got any violent objections, I thought last week, we talked initially about I talked initially about rather, but you know, where to find deals, and I kind of grouped it, just, you know, and, you know, you can correct me if you see this differently, but I grouped it, as you know, three categories pre sorry, on-market deals, pre-market opportunities, and off-market opportunities. And I can elaborate on those themes and what the differences are, I mean, on and off-market, you could argue that if, you know, what are they anyway, what's genuinely off-market. But, you know, on market was through the portals primarily, and perhaps through auction, pre-market is maybe they're going to go on to an auction, or they're going to go with an agent listing of some description, but maybe through some sort of good relationship or contact, you get an early heads up or something like that. And off-market would probably be, you know, somebody's got an exclusive arrangement or directly mandated, or you've got a direct relationship with a vendor or an owner. So that's a loose description. But if I can just open that up from your perspective, you know, as a panel, where are you finding deals? Where do you operate? And where have you found sort of success and maybe not so much success? So whoever wants to volunteer to take that one hour can be happy?
Yeah, happy to start on that on record. So for me, as I, as I mentioned in my introduction of primarily focusing on commercial properties, so maybe a bit different to some of the guys on the call looking at residential properties. So just to keep it brief, I've been looking at the whole spectrum of on-market off markets, initially started out looking on the market on the portals, but with the commercial properties I was finding anything that's on the portal is pretty much gone. Anyway, he already listed what I was finding in the office spaces, which is where we focus our attention. So then I've moved more into contacting commercial agents and building up those relationships. I think that's key in doing that. And more recently, moving to on market, making, making contact with the vendors. Just by identifying a property and trying to find out more about that property.
Off-market at the end. Yeah, yeah. So I can expand on some of those a bit more. On one point of clarification, if I may, you say you're looking for commercial properties, but are you? Are you looking for commercial property to relieve as commercial property or reentering the lines? I think that's not necessarily the case view, is it?
No, no. Yeah, it's converted into residential. Yeah. Yeah. So it obviously needs to meet certain criteria. Mr. Benn is able to be converted, typically under permitted development. So that immediately rolls out certain types of properties.
Well, it's interesting. So I mean, you've gone, you started with a lot of the portals, you move on to talking to agents, and now you're moving to talk to, you know, owners and vendors directly. So you've kind of gone through, you know, a bit of a process that is out of it. Yeah,
we still focus on all those areas, maybe less on the portals. But what I find is, it's kind of a balancing act, you don't want to spend too much time in one particular area. At the moment, maybe we're too much off markets. And the reason I say too much is because quite a lot of opportunities, we're finding where we're just simply too early, then we start going into conversations where we're almost having to convince the vendor about selling because they've got the idea of setting. So we've got the hook, we've got them on the hook, and we've got we're starting the conversation, then you have to start aligning the expectations on what it's worth. And there's a whole journey there, which is meant to be honest, is kind of the bread and butter of the commercial agents, and it's what they're paid to do. So. Yeah, there are opportunities. But yes, it's a balancing act we're finding.
Okay, thanks. So let's just bring other people into the conversation, you know, in terms of where to find deals. David, I saw you came off mute, which is always very helpful sign for me that we're ready to talk.
Yes, yeah, no, I think I mean, Shawn and I, we've had kind of a mix of experience. So certainly, the starts, we were very much looking on market deals. And I think as, as everyone probably would testify, trying to find a good on market deals is very challenging is either just your funding trying to find a needle in the haystack, or it's just the speed of transaction of those good bonds tends to be you see it and it's already gone. So we then developed your strategy to being a bit more direct to the agents, trying to a few reasons for that many, we weren't at that time looking to spend too much money. So as a really brand new startup, we were looking to try and build our way and build our capital, through doing business. So going out, so given our tailored offering, which you know, which reason we'll go into later, we had clients looking all over the place, so we couldn't really target one location to do an off-market. So you know, social media drive. So targeting agents was a strategy that we adopted, and it seems to overtime, repetition and a bit of persistence and consistency, has proven to be quite fruitful for us. And now we find ourselves getting deals that are kind of pre market so that they will go on to the market. And that may be 40 hours, 24 hours a week, sometimes. But we get a first look at it. And often the agents will refer to their black book. And for some agents, I think we're in that category. And definitely an area we want to be and we've really been focusing on. And then also speaking from my personal perspective, I when I was looking for my house, initially I was looking on market, and I knew the exact error I was looking for. So I could have tried to do an off-market, always off-market strategy. But given it was when June when I was looking at was COVID. Kind of peak time, it was a kind of a tricky patch to he got to the area that I was looking for. So again, I tried to adopt a similar strategy that we adopt in the business, which is to develop good relationships with local agents. And then, funnily enough, that's how I actually managed to find the property I've now recently purchased, which was through an agent who it was the listing coming to market, I think it was 24 hours or 48 hours before I managed to get me into to view it. I made an offer, which was accepted and they listed it and then immediately sold its contract. So yes, kind of. Yeah, there we go.
Nice one. And yeah, there's a couple things you said that I think I would like to delve in. But I think let's pause for a second on the you know, working with agents pings piece that you talked about. So I think we've kind of picked up the theme that on market through the portals is not always the best method. It doesn't necessarily mean that and I'll come back to the why. But so you start to look at a different way. So David says suppose what you're saying, You're saying you develop relationships with agents, but Did you find that all agents were willing to talk to you? And, you know, put you in their black book? Did it go that way? Or did you know? Did you have to kiss a few frogs so to speak? How did you how did you find that experience?
And mixbag? For sure, for sure. I mean, with the with the way how men should operate, I think Shawn can vouch for, for the agencies tried to develop nine times out of 10, they won't really give you time of day. Because they're because they got so much time. Well, traction emails that are very busy. And I think, for us how we made it work as if we, you know, initially, it was a long slog, we had to really go above and beyond to impress the agent. So everything has to be fast. Our responses were what had to be fast. If we found a deal that we liked, he presented a pack that was ready to go, which essentially contained all the information they would need to essentially get an offer accepted. So that would be proof of funds. Proof of ID from the client. Obviously, what the offer was, in some instances would have solicitor's details as well. So we'd have a full pack to. And you know, the first few, we still didn't get those deals, but it showed the agent that we were serious kind of counterparty and slow slowly started to gain traction and actually speaking to them properly, sometimes every day. Just ask them how they're doing how they find in the market, getting them talking, because they have a huge amount of knowledge because they're the really the guys on the ground. And yeah, after a while it starts to get through to
interesting. And, Shawn, I think you're looking like you want to contribute to that.
Yeah, I was just going to say really, some of those relationships took five or six months, others, you know, dealing with those agents to, for them to actually take us seriously. But then, like David mentioned there about the, you know, being ready with being prepared with ever since we go so you cannot quickly. But I think that also, we also had to follow that through the sales process as well. You know, we're dealing with any, any sort of queries in between, in between agents and clients and, you know, reply to everything in a timely manner there as well. You know, I think that's, that's worked well for us as well, because, you know, they could see that we were quite professional. And then the other thing is key phrases. It's about being professional. I think you're talking about not just with the Office stage, you're also talking about sales progression to completion, right. It can be quite an extended and involved process, isn't it? Yeah, yeah, definitely. Yeah. So you those of you can't, you can't see because I'm looking at the screen. But you might be listening to the podcast. I mean, Sean, Sean probably had a full head of hair when he started this. He's maybe pulled it all out. I think I listened in I was aware of a few of the deals that you were progressing. And, you know, it was a bit fractious at times, or a bit challenging to say the least, right?
Yes, yeah. We have the challenges, but I mean, yeah, you just find, find solutions don't even know, you've just got to work together with with all the parties involved.
So it's interesting. So a couple of things came out there. So in between, you kind of said, talked about the professional approach, right? You know, showing your capability to execute, etc, that you were serious, even though you didn't get the first one or two deals demonstrated that capability, which I thought was interesting. And you also talked a little bit about relationship, you know, how that you got them talking, and you spoke to them regularly. It's all about building rapport-building relationships. She's another factor. You know, a lot of people talk about, you know, getting yourself in with some local agents. And you know, did you ever take doughnuts round or anything like that? Was that your style? Or did you have a different approach? I did, and I've done a bunch form. Butmost of the time we've been, how long have we got through the pandemic now? So a lot of that hasn't been possible. But maybe we should start.
No, but no, I think on the series, though, it's been, I can think of a handful that we've developed Now to where they are now. And, you know, we've spoken over, you know, on WhatsApp and email, at least every week bears just that regularity and is having a conversation with them is more not just trying to say what deals we got that fit our criteria is that you're asking them, you know, what? What's their view on the current markets in the area that they specialize? And how are they doing? And is there anything that we can help them with, in terms of, you know, anything, any stock, that's not shifting, just trying to get a conversation with them, because night for us, given the criteria that we have with our clients, we need to be careful with what we send through to the clients? because not everything, not everything hits. But if we're able to get deals that you know, are close, or at least we have visibility on a deal that we may not otherwise have, that can open up other avenues and other opportunities. And you know, in some instances, you can value engineer a deal to work for, for all parties.
Interesting, we'll come back to Value Engineering, definitely. Because, you know, in the preamble, before we started talking, I was talking about, you know, the holy grail of discount. But let's maybe come back to that point, because unconscious Dominic haven't, you know, managed to talk on this one yet. So really, just to bring you in about where you're finding deals and your approach to it, you know, because you're looking for yourself effectively. So just elaborate a little bit on where you find them if you could?
Yeah, so I think it's kind of some, if not most, has already been covered. So at the moment, I'm using Dell forces along with David and Sean. So as I mentioned, it starts at times my biggest kind of restriction at the moment. So I've been using Tor sources to, to kind of delegate some of the work, I guess. So that's where I've been finding deals recently. Prior to that, it was circled myself on portals that's already been mentioned, as well. So I was generally looking around places where or places I knew, or places where I already had a property. Using the porters trying to find other places in those areas. And then also building relationships. So the property that I own little kind of managed by agents, letting agents So generally speaking to those who are the properties that are available in those areas. And then also, one property that we purchased a flat upstairs flats, we did a refurb on it, we kind of got a relationship with a lady downstairs, no, you know, no kind of prior kind of motives or anything, but you know, we just kind of consider it to the work we're doing everything can shed a couple of issues to the kind of resolve that you know, as quickly as we can. And then a few months later, she got in touch with sexual and self-interested. So before I even went on market share that value, and we offered her like a bit less than fair value for so she obviously stayed safe from the estate agents phase, we delegate property as well as valuable relationships,
those relationships. Absolutely. I think, you know, having conversations, developing relationships is very much a people orientated approach. And I know that pretty well, maybe with the exception of Carl, but I think a lot of you are working a little bit remotely. I mean, we've all had to work remotely right during the pandemic, as Sean said, but some of you are working remotely anyway, from the investment location, or what are your clients investment location. So a lot of it had to be done, you know, a little bit at arm's length. Just dominant. Just come back to your point about using sources because, you know, that's one of the angles that as an investor, you have as an option. So you said that you? I mean, my, my translation was your time-poor. So what was the value, if you like that you see in using a source of because presumably, there's a fee involved, right?
Yes, there is. But I think you can always make more money because we make more time. So I'd rather use my time doing other things. I mean, I'm busy at work anyway. It's not like I have loads of free time. So I've been quite lucky to be still working through the pandemic, but if anything could probably busier now than I was before. So yeah, there is a fee of seven US forces. But as long as the deal still works, that fee once you factor that fear, at the end of the day doesn't really matter. You've saved a lot of time on searching several properties and some of them won't pan out. Most of the sources only done that work for you and then brings you to the kind of the one or two deals that do work. And then obviously, you know, just you can definitely and you know, the yield or the gross profit or is still acceptable then yeah, it's still a good deal.
Yeah. And so there's value in somebody else saving your time. Exactly. Exactly. Sounds good. All right. So let's, let's just dive back to you guys, Dave, and Shawn, because you talked we I kind of you started talking about, and I said, we'll come back to it, let's get, let's get it on the table. So your model. So a lot, a lot of deal sources have a patch, okay. They have their territory, and you know, they literally walk the streets, probably. But that's not necessarily how you go about things. So why don't you just sort of share a little bit about that?
Yes, so we are, we want to be working with, you know, ideally, in our business plan, it's, it's around 1010 or so roughly, clients. There's part rationale and the reason that we both work as well. But that, I think that the main thing is we and the core reason is we want to develop close relationships with those that we source for. Not only just because it helps us to actually understand what they're looking for. So we can send a better, you know, opportunity, but also longevity. So we would like to repeat clients. And rather than spending time looking for new clients, we're just purely spending all of our energy looking for deals. Because, you know, some, when we were starting out, we were having to spend energy on both sides of the puzzle. And now we've built up a client base that you know, where, in terms of size we're happy with, where we're trying to put all of our energy into sourcing for investors that we Yeah, that we're able to source for. And I think in terms of like geographics. Yes, most clients have most clients will have an idea of what they're looking for fundamentally, in terms of bytes, alerts holiday, that HMO, and most clients will have an idea of exactly what kind of return they would want. Interestingly, a lot of clients are quite open in terms of what they are looking for geographically, or very similar. So it actually isn't as kind of staggering as it as it may seem, because a lot of the clients will be looking for deals, that will produce a certain return, and are of a certain profile, whether that be a buy to that holiday that which allows us to then really focus in on, you know, probably more patches, then, you know, another strategy would be, but we, with the development of the agents that we've built it, you know, it actually doesn't really add too much more work now. And from that, as well, we've done a lot of research earlier on in our kind of business lifecycle. This allowed us to build up a really good knowledge of those other good amounts of areas. So we can quite flexibly say to a client, do you have experience of Nottingham, shall we say, we can say yes, with certainty. So we can then you know, go to Nottingham and have two agents that we have a relationship with. And yeah, that's how we've built it up over time. But it has taken time. Yeah, yeah. Well, that's interesting. And thanks for sharing the model. And I didn't realize that you could, you know, you've managed to hone in into some, you know, not just one patch, but not 100 patches. I'd say that. Yeah. We've been asked that. Sorry. I wasn't No, no. Okay. And now, I want to contrast it with Carl, because I think you're, you're a bit more concentrated. Are you not in terms of location? Is that fair to say?
Yeah, so I focus within about an hour to where I am. So all of the opportunities I look at I can travel to work to progress to the point of where we're going to view it. So I'm primarily sourcing for myself, but I do sometimes they pass on any leads that aren't suitable for me. But yeah, in terms of geography, that's, that's quite important for me because it's not just investment. It's a development opportunity. So, beyond finding the site, we've then got to develop it. And we'd be there probably several times a month to, to progress, the development. And then beyond that, it may turn into an investment if we were to hold access. But the other aspect I like, of it being very close is, is coming back to building relationships with developers, because you have the opportunity to meet the agents on sites, in build up those relationships have links to the conversations, and you can't really be meeting someone in person not having a face to face conversation about something, versus exchanging a few emails or having a phone conversation. There's one thing I like about that aspect of it.
Yeah, and so that just to drill into that a little bit more, I mean, the relationship is nice that does it. What does it give you? What does it? Does it give you something that you know, you don't have otherwise? By having that relationship? What was the outcome? What's the endgame of developing that relationship?
Pretty much what David and Shawn were saying about being taken seriously. So we spent quite a lot of our early days when looking for leads, just kind of maybe being a bit too systematic, just kind of getting all the leads in as quickly as possible and analyzing them as quickly as possible. And then we weren't following through on some of them. So leads would come in with like a was not quite right for us, and then we just let it drift away. And then you find the relationship starts to drift away. Because if you need to kind of start thinking about putting your position itself in the other person's shoes, so we use sources as well. So imagine, as a source of sending me opportunities, and I'm kind of half-heartedly, acknowledging and thanking them for these opportunities, not really following thrown on them. versus if I'm really eager and keen and saying you love this opportunity, I'll get back to you tomorrow. And the whole engagement piece, and so that that translates both, wherever you're dealing with someone via email or phone calls. But then also, if you're trying to build up that relationship with agents, the ability to meet them on site, socially, when you're getting to know the agents really helps, I think maybe once you know them, meeting them on-site isn't, isn't one of the higher priorities for actually going to view the site. So initially, with the quite a lot of sites, with half of the objective being to meet the agents in being to have those conversations, once you've had those conversations, and in you know them, the objective for going to view a property is just a view if in case it so you can be a bit more selective, they're interesting. And I think I probably want to talk in a minute, because somebody said earlier about good deals. So I'm going to come back to that. So you can start thinking about that. But maybe just to bring dominant back and as dominant, you talked about working with agents, but you've worked with agents in a couple of different ways, haven't you? So just to build on the whole relationship with agents thing, how have you kind of taken that on, how's it helped you in your business?
But well, I mean, obviously, a good agent is worth their weight in gold. So, like I said, before, my properties are fully managed. So whenever I take on a property, I obviously look for a good agent and to manage it for me. So we that by today or HMO. You know, he also was kind of selective and the agents we choose, but also about a couple of refurbs done where I've let the agent kind of manage those for me. So again, it's always trying to gauge in this case, or when I have which is just about finished now it's only a small refurb but still stripping everything back and plaster and new carpets and everything. But I found a good agent. And actually they're in charge of anything get a pharmacy paid for the work to be done and relationship with them. There's no suggestion actually to do the refurb shows that Okay, fine. never took it on. So you will be offended when you've got someone to move in once the work is complete. So when around.
Yeah, so when around absolutely what it's about being, you know, reciprocating, Carl said earlier that if you give the feedback to the source or the agent, you know, then they lose interest, you're not really giving anything to them. And at the end of the day, you get paid on results. So for themselves, this refurb price up and the rents obviously they make their cut also goes up as well. So yeah.
Thank you. Just to be clear, in that case, your case, Dominic, you're talking about a letting agent. Hi. Yes. So working. So I talked last week about, you know, letting agents being relaxed, you talked about them being a potential source of deals to buy. But you've also used the blessing agent to be kind of a project manager almost.
Yes. Yeah, but yeah, definitely. But it's also about building those relationships. So I would hope that as, as we build this relationship, if any deals do come up, that might be suitable, we'll put them my way as well. So you know, there's something called scripting, but also, once we kind of progress further, which also just speaks to playing along, playing the long game. give something back to them, so they can give something back to us in the future, etc. And it's all nice and symbiotic. You know, the way Yeah, absolutely. So once once he learns to trust me, and that I deliver and pay on time, and on the kind of stuff and yeah, work together more hopefully, that's the way I kind of see these relationships with all the agents and people that I'm working with.
That's good. Okay, so I kind of dropped that dinner, I said, we're going to like good deals, somebody talks about a good deal. So, you know, I'd be interested in your view of what a good deal is, but there's two things that kind of came into my mind to maybe talk about in this segment. One is good deals, not every deal is a good deal. So by definition that talks about some sort of, you know, filtering system cascading system, that you don't get every single offer accepted type of thing. So good deals, you know, are hard to find by maybe I'm This is my, you know, I'm just putting it out there. And therefore, do you need some sort of system, which, you know, tracks them, and, you know, measures them, etc. And, you know, allows you to follow through question mark. But the second part of it is, what's the definition of a good deal, because, again, before we started, you know, recording for the, for the episode, or somebody talking about, you know, the Holy Grail to a lot of property investors is BMV, below market value, which is big discounts, you know, typically plus or minus 20%, discounts. And that seems to be the holy grail that people are looking for. But I also speculated last time, but maybe that's not the only definition of a good deal. So, you know, what is a good deal? Which is really the second part? And then first part is, well, you know, what do you need to do to find those good deals? And then how do you kind of manage yourself? How do you manage your deal flow? If that's what you're looking at? So who wants to start us off on that kind of part of the conversation?
I think, as far as they've denied concerned with, I mean, you asked the question, what is a good deal? And, I mean, it's different for everybody, isn't it, everybody has different their own criteria. You know, some clients may be happy with a 910 percent return, others will be looking for 12 to 15. That obviously, varies on, you know, depending on what strategy they're, you know, they're looking for, but, you know, so we kind of go on the basis of what is a good deal, what is a good deal for them? You know, what, what is a good deal for them may not be a good deal for you. So, but it's, it's their criteria that we work off. And then, you know, you sort of touched on 20% BMV, there, which, you know, is not always possible, but there are other ways to go about that, like, you know, sort of looking for value out opportunity, you know, how can I how can we add value to, you know, to this property to increase that return on it, and, you know, the end value
is that right, so, you know, I mean, there's more than you know, if we talk about the deal, pyre call that in a discount is one element of it, but it's not the necessarily the only element. And, you know, you finding a deal might not be just hunting for a discount, it could be hunting. value, as you say, could be here could be other things got a guest on recording, which caught me out. There's a picture of a cat, if you don't know what I'm talking about not picture of a cat. It's an actual cat, who's just created? called screen? There you go. So we've got real live animals don't work with animals and children, as they say. Yeah, so and that's good, you know, took about maybe what is a good deal for the client? And you said return and but what is returned? Because, you know, some people, we I know that in this community, we talk about return being return on investment or return on cash employed, if you like, but do all the investors you talk to use the same language as their measures of return?
No, no, certainly not. Like you said most, most us sort of return on investment. But, you know, that isn't always the case. It's everyone's different. You know, it's, there's a wide spectrum. Now, you've got to look at all angles as well.
So you can't throw me looking at you? Because I can't I know a little bit of the answer to this question. But when you said you're looking for deals that fit your criteria, etc? Did you just walk in and find one and have an offer accepted? Or was it a little bit harder than that?
Yeah, so that's a pretty epic challenge getting offers accepted in this market. I mean, for us. I mean, it's probably going to start getting on the deal analysis conversation, but we obviously apply different criteria, and keep digging and digging. And I think you've probably mentioned, let layers of the onion, we keep on peeling those layers until we find an opportunity to do this, that we think is good. So at many points, a deal could get thrown out. So right from the off when you first look at it in your inbox. For us, a bad deal would be something industrial, for example, we can't do anything with that. And then if you just keep going down and down from there, just kind of keep on saying is this a good deal? One thing one challenge I I find is you talk about talking about what you're looking for with the agents, can you explain what you're looking for? But then you get sent to so many things that are unsuitable? And for me, that's a bit of a challenge, because you just feel a bit. Like you're not dissing, bit disinterested or ungrateful when you're constantly saying, Yeah, this is it for us. But I think you just got to be pretty open with people and, and maybe to keep reminding them once in a while. And obviously, you got you end up on a lot of mailing lists. So maybe that's where we're where it comes from sometimes. But yeah, not, not every deal is suitable. It just needs to make that decision as quickly as possible. Move on to the next one, not waste too much time on it.
So as the fallout rate, maybe even you say no, or maybe I guess you don't have your offer accepted, or maybe it's not a suitable target for you. How do you keep tabs of things go? Oh, well. So so we use
these a couple of different systems for tracking opportunities. So all of the stuff that gets rejected pretty early, doesn't really make it out of the email inbox. And the progress is further, we'll make it into our CRM, which we use, which is podio. And then we have a category for different stage. So it will work its way through the stages. And that's how we track all the off-market leads as well. We put all the off-market leads and keep on tracking them through us as we keep on trying to push them through. And then we also use, we've captured some metrics, week by week as to how many opportunities we've inquired about how, what responses we've had back. So we do try to track metrics as well. So we can kind of hone in on things. So for example, one thing that we do which is very relevant to this conversation is we keep track of the source of an opportunity, was it off-market on market from an agent? And then when we're looking back at what, what offers have been made, we can start to see where are we having the most success where what types of deals have we made the most offers on which ones were the most serious because sometimes a deal might look good, but then it doesn't count. Too much. Too many different ways in which we track. We track those.
Sounds good. Now just a quick one on the systems and processes. I think a lot of you use systems or processes actually, I think I've managed to gather a group of people who lean on that quite a bit. And what, you know, let's bring you in Don, again, Reno, what are you using? Do you track the opportunities in some kind of system?
Yes, so I use notion a lot. Plus, I'm big fan of notion. I find that's great. Because you can customize that and do pretty much anything you want with that. So use notion on Google Sheets, pretty much. So I track everything in motion and use Google Sheets to do kind of a number crunching and the analysis in there. But I set up campaign boards and pipelines in motion. And yeah.
And it just for those who don't really know, because I think the notion is one of those sort of newer types of apps or technologies, what how would you describe it?
It's like, it's, it's quite safe note taking, but you can, any thoughts you have any anything you want to build, you can just create a page and notion. Everything's like an object. So you can have a piece of text and have a table below it, and a link to something else and drag them all around, put them over, you won't have a Kanban board, and you can embed that in another page, or another page pages and pages that just kind of spread a powerful tool.
And does it have date functions that you can have in mind?
Yes, so a lot of the boards I have set up like you can find the properties of each card, so you can have anything you want in there. And you'd like I said, you have pages, you can embed other files and everything in there if you want to be able to draw your system. But yeah, so I've got some things that I would date, and then you can add a day. And you can add a reminder as well as you can turn the reminder off. Just really, really useful about really powerful.
And does it have any mechanism to like count to add up or, you know, do some quantification side of it?
Within? What you can do? Yes. So I have a very kind of basic analysis kind of page on there. So just put in some basic figures, like I said, use Google for the heavy number function, but I can quickly create a card in one of the pages I have in notion, put in some figures. And it just gives me a rough idea of the yield and whatnot. But they have now just extended it. So they've opened up the API. So I think that might be you might be able to use that to do more powerful calculations but haven't explored that side.
And it was aware, I'm aware of top-level that you can do similar things with Podio. Not not the, you know, I think the look and feel of notion is more like I think it's more like an intranet almost.
Yeah, I guess you can have, like, on the left, you've got your so-called navigation staff. You've got all the different pages, uni-bead pages, and pages like I said, and yeah, you can link and you can build out for teams as well. So you can add, you can add members to it. And you can add copies, leave comments for each other. So it's a team tool as well. It's not just for introductions, and you can assign tasks to people, that kind of stuff.
So projects and task management tools as well.
Yeah, yeah, you can use it for that you can pretty much use it wherever you want.
Cool. David and Shawn, do you know just on those sort of deal progression pipeline progression? Do you track what you're doing? And what do you use?
Yeah, so we're similar. It's called we use podio. But Google Sheets, so we've got we have a few systems for different things about specifically for deal. Tracking. Yeah, as Carl said, we we won't record every single deal, because that's what we would be spending our lives doing. So we will really only record a deal once we've done a financial appraisal. And, and kind of thought Yes, this works, we'll then put into our podio system. And then again, as Carl said, We it kind of goes through the life cycle. But we also record and track deals on a higher level with kind of key dates just on Google Sheets as well just for more to help us with things. I know you can do in podio. We haven't made it that advanced yet. But for things like mail merge, so if there are deals that we have either made an offer on gone to see him for whatever reason we've not kind of been successful. We will then try and track that and I often will try and record the details of the agent in a Google Sheet, and then we can do a mail merge a mass mail merge, or a unique mail merge, depending on what the circumstances.
Okay, so better systems taught there, which is good for some. I'm just conscious with the timings. And I think, you know, we probably can't do everything justice, not just distress, you know, no one is doing heavy director, vendor, you know, marketing activities. I don't think particularly, you know, Facebook guys letters, leaflets, you know, those kind of activities? I think, Shawn, I remember you telling me about doing what the Americans call driving for dollars. At one point, that if you still are,
yes, yeah. I mean, that's more of a local thing. You'd be surprised how many properties you actually see that sort of empty or in a rundown, you know, rundown state when you're just walking around or, or driving around. So any, any kind of sort of mail that we've sent direct mail has sort of come from that strategy, really. So it's, it's highly targeted? And to be honest with you, the reply rate that we get from that is, you know, is fairly high, because it's, you know, we're not sending out hundreds of letters. But yeah, so I still do that. It's definitely working. And I've got a vision, I think you remember saying at one point that you were riding with your son on the back of the bike? Is that right?
Yeah, that's right. Right, riding with my son in, on the back of the bike with and sort of listing any, properties that I have seen on Siri, on my phone? I really didn't go in just to record sort of the mainly the road or, or the address of them?
Well, that's a, I've never heard of that, you know, so basically, on your buying decision on the back, you know, speaking to Siri, when you see an empty property, and then sending them a letter, there's a system that comes free, of course, of course, you know, children were harmed in the making of this, this system, cool. I kind of want to do some kind of wrap-up now, because it's just because of the time. So maybe what I'll do is just go around the table. And I guess any top tips or do's and don'ts is kind of what's on my mind. With regards, obviously, the topic is deal-finding. And, you know, what have you learned? What would you suggest to other people who are looking to either develop in a find deals for themselves or assess you even find deals for other people? And, you know, any sort of dos and don'ts. So I'll let you answer how you wish, but just to kind of draw a conclusion to our conversation, that would be a neat way to do that, perhaps.
I guess I guess my top tips would be one on, you know, building relationships, but the time and effort into, you know, to dealing with agents and, you know, even vendors, if you go direct to vendor, you know, really put an emphasis on that. And then also, in terms of tracking everything, make sure you follow up the, you know, direct vendor deals that we've had, they've always come from a follow-up. So maybe five, six months afterward. Yes, always follow up on deals that you think, you know, even if you think they may have gone, just follow up until you know, they'd go good advice. Thank you.
I reiterate that a little bit in terms of building relationships with people, but I also add, maybe don't go with the kind of mindset of I'm going to find a deal or this person is gonna find the ideal. I think maybe there's a bit more natural and longer-term than that. So just try and build relationships with people and work with other people as well like sources. If you're time-poor like himself.
So people business, people in the property business, but it's actually about rubbish, isn't it? Yeah, definitely. Yeah. And take a long-term view quite like that. Really, so, David, I can see you come ready to speak?
Yeah, no, I won't repeat the relationship point. I think that's been already said. I think my top tips are that there is no one way of finding a property I think as this conversation and many other talks, you will note that there are many ways of finding a property. And as we said earlier, there are everyone has a different view on what's a good deal and what's not. So I think from a sourcing perspective is really understand what your client is looking for. And if you're doing a mass, kind of if you're not adopting a personalized approach, if you're doing to mass clients, as it were, like a male, a male base or something, make sure that what you're presenting is, is clear and, you know, understandable. Keep it very high level and keep it just easy to digest. And I think the one Don't I have is, from personal experience, and Shawn will certainly reiterate this is if you're sourcing that doesn't give up. It's, it's a hard game. But it's, you know, it does, it does pay off, and it's, you know, everyone's different. Everyone has, you know, different successes at different stages, but over the long term, and if you keep nailing down on your one strategy, it will pay off.
So it's good, especially neither you, Shawn, or David mentioned the word compliance, so compliance sources. So is that not a do or don't?
Do always, always make sure that your deal sorcerer is compliant? I would say? I think a lot of deal sources just register with, with the relevant bodies and think, think that's it, then the roll compliant, but you know, there's a lot of stuff that goes after that sort of written risk assessments and policies and procedures need to be in place. I think with all initial contact with it with a deal source and make sure that they are asking you, you know, about your, your goals, your experience, funds, and even sort of the source of your funds, which, you know, it can seem quite intrusive, but that's all part of the know your client, they should know those, those details. And then obviously, after that, you can go and do your, your own due diligence on that deal, salsa.
I was wondering if it's gonna come into the conversation. And I was also if I was gonna put a pound bet on it, I thought Shawn might be the man who would talk about it. So thanks for sharing that demonstration of a level of professionalism. After all, isn't it? And I think that came out earlier in the conversation anyway. Thanks for that, Shawn. We won't tap you up anymore on the flow charts that you've probably got to support what you're saying there, but I know that you have them. So exciting stuff. Exactly. And Carl, what about you then? So help us round up Do's, Don'ts, top tips, etc?
Yeah, so yeah, out of those headings, I wanted to pick up on maybe something I've learned, which is to iterate. So coming back to your question around, how do we go with more metrics do we gather. So using that information to feedback into the system so you can iterate and improve? And for our kind of fun? For me, that's finding a balance on where, where you focus, your energy, and your time to get the best results. In terms of the kind of tying into the suggestions of following up is, one thing I've found is if once you've identified an opportunity that you think is a good deal, but maybe you're a bit off the mark, and you think this isn't going to go into work. Sometimes it's worth sticking with it, and just putting your stake in the ground and stating to the agent or the vendor, what your position is because you might get rejected the first time around, but then if you do then follow up, you might find yourself in a position where their expectations have changed. Maybe there's they've softened a bit. Maybe they've come to their senses a bit. And your offer is still on the table. Certainly, if you haven't changed your position, then you can be seen as credible and reliable. And yeah, maybe it does come back around. Does this happen to me a few times? We're just following up and it comes back around sometimes.
That's a really good point. I think you know, in our industry generally is a lot of hype. And I think, you know, sometimes people got a false expectation for whatever reason about the value of their property. And, you know, maybe they have to have their expectations realigned. But if you, if you're professional in the way you evaluate the dealing, quantify your offer, and you make a credible, you know, research-backed, if I can say that offer, then it might come back around. In fact, nearly all of you have kind of talked about things coming back around, which has to be one of the biggest takeaways, right, along with David's Don't give up, of course. So things coming back around. The other thing I was just say so so I was talking to someone recently, and they said they had their funds ready to invest for 18 months. Now, they had them ready, they could show proof of funds. And it could have shown within a snapshot of their statement every month for 18 months. Now, broadly speaking, what sort of return were they getting on those funds? In the bank? Yeah, I think Exactly. When we were talking earlier about return expectations, and what's a good deal. You know, if you're waiting for the perfect deal, to come along, and you've got your funds on deposit for 18 months at 0%. Just to pick a number, if you're looking for a 20% return, and you've got your funds locked up for 12 months at zero, you've already half your return expectations, I mean you when you find your 20%. But maybe if you modify slightly your return expectations to get your bonds working for you. I think that will be one of my top tips. Because I often hear, that people don't actually invest, they can be ready to invest. And maybe for whatever reason bit like a vendor with high expectations about what they can sell their property for. Maybe as an investor or developer, we might have too high expectations about what we could what we're going to get as a return. So I'm not saying we should do a return of 2%. Because we're otherwise one non-percent low percent. But I think, you know, just thinking about putting our funds to use and the deal being good enough. And getting going is one of them you know, I sometimes hear that a lot of people have been ready to invest for a while but haven't actually pulled the trigger. Since it's been. Great. I just do the conscious of time. I broke my own rule. I said we're down for 45 minutes. It's a little bit longer than that. But I just you know, want to thank you all for joining me today. As always, very, very good conversation. very valid points have all come out. It's really hard to add to anything you've said. So Dominic called David and Shawn's hurry to appreciate you joining me today. I'm going to do it just a quick way you can jump in if you want. Are you ready? Sure. You can jump in and say something. Now your past Okay, so I'm just going to gather away from the army I feel that I feel a bit left out now. They're all waving at me and smiling and laughing now. So all I'm gonna say is thanks very much for listening once again this week to the property voice podcast. The show notes are going to be over the website, which is thepropertyvoice.net you can always contact me podcast at thepropertyvoice.net If you want to talk about anything from today's show, including talking to these lovely gentlemen in front of me, I'm happy to introduce you if you'd like to meet them as long as they're willing to share their contact details of course. But you know, thanks again for listening to this week. And until next time on the property voice podcast.
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Transcribed by https://otter.ai