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THE SMALL PRINT

Copyright © 2017 John Wilson

All rights reserved. No part of this publication or associated resources may be reproduced,

distributed, or transmitted in any form or by any means, including photocopying, recording, or

other electronic or mechanical methods, without the prior written permission of the publisher,

except in the case of brief quotations embodied in critical reviews and certain other

noncommercial uses permitted by copyright law. For permission requests, please contact

[email protected].

Disclaimer While every effort is made to keep this manual and associated resources up to date, no

guarantee is given that the information on it is correct, complete and/or up to date.

No responsibility is assumed for any loss or damage caused by the use of information contained

in this manual or the associated resources. You should always consult a financial advisor when

taking out a loan or mortgage.

The author/ publisher is not regulated by the FCA and none of the information on this site

should be construed as financial advice.

Earnings Any income or earnings statements are estimates of income potential only, and there is no

assurance that your earnings will match the figures presented, which are given as examples.

Your reliance on the figures we present is at your own risk. Any income or earnings depicted

are NOT to be interpreted as common, typical, expected, or normal for the average investor.

Particular results may be exceptional, and the variables that impact results are so numerous

and sometimes uncontrollable, that the publisher makes no guarantees as to your income or

earnings of any kind, at any time. Where specific income figures are used, and attributed to an

individual or business, those persons or businesses have earned that amount.

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ABOUT JOHN

WILSON

FOUNDER OF

PROPERTY

INVESTMENT

BLUEPRINT

"Property investment was what first gave me my financial freedom over 10 years

ago and I love it so much, I want it for you too!"

Although John was in a well-paid IT career in London, he knew that there had to

be a better way. Then, when he attended a free property seminar, he decided to

break free from that world of long hours, strict bosses and alarm clocks and get

into property.

Since going full-time in property investing in 2003, John has built up a multi-

million-pound rental portfolio, flipped, developed and packaged numerous deals

and built, grew and sold a successful property management company.

It is now John's passion to pass on his knowledge to new investors so that they can

avoid the (many!) mistakes he made and get you to your goal of financial freedom

through property faster!

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CONTENTS

THE SMALL PRINT .................................................................................................... 2

ABOUT JOHN WILSON FOUNDER OF PROPERTY INVESTMENT BLUEPRINT ............ 3

CONTENTS ............................................................................................................... 4

THE GUERRILLA PROPERTY MANIFESTO ................................................................. 6

SCOPE OF THIS MANUAL ......................................................................................... 7

WHICH DEALS TO MONETISE? ................................................................................ 9

WHICH DEALS TO KEEP? ....................................................................................... 10

HOW I EARNED MY FIRST DEAL PACKAGING CHEQUE .......................................... 13

LEVELS OF PACKAGING & WHAT TO CHARGE? ..................................................... 14

EXAMPLE OF POTENTIAL EARNINGS ..................................................................... 22

PREREQUISITES AND RED TAPE ............................................................................. 24

WHAT TYPE OF DEALS TO PACKAGE? ................................................................... 28

WHAT MAKES A DEAL? ......................................................................................... 31

DEAL PACKAGING TIMELINE ................................................................................. 33

MARKETING & NEGOTIATION ............................................................................... 37

LOCK-OUT AGREEMENT ........................................................................................ 41

HOW DO YOU GET PAID? ...................................................................................... 45

EXPECTATION MANAGEMENT & COMMUNICATION ........................................... 48

POWER TEAM ........................................................................................................ 52

HOW TO FIND INVESTORS .................................................................................... 56

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JOINT VENTURE WITH US ...................................................................................... 60

VETTING YOUR BUYER .......................................................................................... 61

PREPARING YOUR BUYERS TO BUY ....................................................................... 63

MARKETING THE DEALS ........................................................................................ 64

RESERVATION FEE ................................................................................................. 69

THE “BROKER” MODEL: HOW TO PACKAGE WITHOUT

HAVING TO FIND DEALS OR INVESTORS ............................................................... 70

ETHICS IN PROPERTY INVESTING .......................................................................... 72

CONCLUSION ......................................................................................................... 73

WE WANT YOUR FEEDBACK! ................................................................................ 73

WE WANT YOUR SUCCESS STORY! ........................................................................ 73

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THE GUERRILLA PROPERTY

MANIFESTO What is a Guerrilla Property Investor? It’s more than just a “cool” name for a

course, it embodies timeless values that have underpinned the success of great

entrepreneurs, investors and businesspeople throughout history. Here are those

values, in no particular order:

1. The Guerrilla Property Investor is on a mission. Family, friends and colleagues

may try to discourage or even mock him (or her) but he ploughs through,

making his mission a priority.

2. The Guerrilla Property Investor is a value investor. He seeks to create (usually

off-market) deals that have value built into them: either in terms of discount,

high-cash flow, or both.

3. The Guerrilla Property Investor has an abundance mindset. He knows that

there are more than enough deals out there for everyone, he just has to find

them.

4. The Guerrilla Property Investor thinks outside the box. When rules and

regulations change, he doesn’t cower and whine about it with other lesser

“investors”, he sees the situation as an opportunity and quickly figures out a

way to capitalise on it.

5. The Guerrilla Property Investor cultivates multiple streams of income. He

knows that by doing this, if something changes and an income stream

disappears, he’ll be just fine.

6. The Guerrilla Property Investor is diversified. He has an entrepreneur’s

mindset and considers all excellent investment and business opportunities,

even if they are not strictly property-related.

7. The Guerrilla Property Investor is on the cutting edge. He continually works

on his education with quality books and courses in his chosen fields.

8. The Guerrilla Property Investor never lets lack of funds hold him back. He

knows that the return on money that is not his own is infinite and knows how

to get hold of it. He also knows strategies to invest without it.

9. The Guerrilla Property Investor operates within the confines of the law and

has the highest ethical standards.

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SCOPE OF THIS MANUAL Before we get into the exciting business of Deal Packaging, I just wanted to nail

down the scope of this training. Although this manual does drop golden nuggets

in areas like marketing and negotiation for example, it is intended to be a powerful,

concentrated resource on the subject of Deal Packaging only. If you are new to

property investing and need training in other areas then we’ll point you to other

resources along the way, as appropriate.

Guerrilla Deal Packaging TIP If this is the first self-employed activity you’ve done, then it’s important to contact an accountant who can guide you with completing tax returns etc.

There is a lot of money to be made from property. Property has made more paper

millionaires than any other way in the United Kingdom over the last 10 to 20 years

and will continue to make this happen for people. The long term trend for property

prices is always upwards. As prices rise, the investor can make some serious money

if they have bought the right property at the right price. The life of a property

investor is to be always looking out for the right opportunity to make some money.

And there are many ways to make money from property.

Think about a typical property transaction. Think about the people who earn from

it. On the basic level you have:

The estate agent

The solicitor or conveyancer

The mortgage adviser

The surveyor

Then as you start to scratch the surface you can see in many property transactions,

there are other people who might earn too, such as the specialist surveyor, the

removal or the storage company, a local decorator and so on.

This is why property is such a lucrative part of the United Kingdom economy. Every

time that the housing market falls, the government of the day puts measures in

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place to ensure that it can stimulate the housing market again and spark more

property sales. So much of what we do depends on it.

And there are great opportunities for you to earn very good money from the

property market yourself, whether you are new to it, or a seasoned professional.

One of the up and coming ways that has made its way over from the United States

is the concept of Deal Packaging. Deal Packaging is where you find property leads

or deals for other people. Property investors, first time buyers and estate agents

are among the people that are always looking for property deals. If you can find

them a good deal, then you can stand to earn money from that deal. Your part in

the process can be small or large and each can earn you money.

If you find a deal and pass it on —or “package it”— to another investor then you

can earn a fee, sometimes called a finder’s fee.

But why would you want to do that? Well, there are a few reasons:

You can’t fund the deals yourself: if you are generating a decent amount of

leads, deals will come up often and you may not have the necessary cash to

fund deposits to buy them all

You can’t get mortgages: if you’ve just gone full-time in property for example,

you won’t have enough years of accounts to qualify for a mortgage yourself

You want to build up a reputation to attract joint venture partners: in this case,

you are just passing on a few good deals in order to prove yourself to potential

partners to fund future deals

You want to build up deposits by selling deals: you might sell 9 deals to get

enough cash to fund a deposit and buy deal number 10 for your own portfolio

You just can’t do that many deals: you can only apply for so many mortgages at

one time before the lenders start to ask questions so if nothing else limits you

then this will!

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WHICH DEALS TO

MONETISE? Now that we’ve established why you’d want to package deals, let’s ask the

question: which deals would you choose to monetise by packaging them? Of

course the answer to this —especially to begin with— may be “all of them” but

once you’re up and running, here are some reasons you might choose to package

a particular deal:

It doesn’t fit your strategy. It’s important that you have a clearly defined

personal investment strategy and that you stick to it, so you should choose to

monetise deals that don’t align with that

It’s outside your geographical area. Investing outside your geographical area

can be risky and time consuming so why not pass these deals to someone who

invests in that area, for a fee?

It might be too big/small for you. If a deal requires too much funding or if it is

just too “small fry” for you then it may be ripe for packaging

You don’t have the time or experience to do it yourself. If you’re still in a day-

job then you might not have time to manage a large refurb or perhaps you’ve

spotted a deal with potential to do something “advanced” like split title then

you may want to pass it on to someone who has expertise in that area

There may be other factors involved. For example, the property may be below

the value threshold required to get a mortgage or may be uninhabitable and

therefore require a cash purchaser.

Guerrilla Deal Packaging TIP It’s essential to remember that the deal you’re passing on must still be a “deal”. Even if it does not fit your own criteria it must present significant value to another investor. Pedaling deals that don’t will only waste your time and potentially damage your reputation!

Now that we know which deals to monetise via Deal Packaging, let’s consider the

converse: which deals should we keep?

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WHICH DEALS TO KEEP? Again, when you’re just starting out, the answer to this may well be “none” but

sooner or later, you’re likely going to want to start building your own portfolio, for

long-term passive income, a retirement nest egg or even generational wealth. And

when you do that, you’re going to want to know which deals to keep for yourself.

The simple answer to that is “the best ones”. But there’s a caveat to that, and this

is that the deals should fit into your main strategy. For example, if your main

strategy is HMOs and a barn conversion type deal comes up then you probably

want to pass on the barn. There’s a lot to be said for having some diversification

in your portfolio but letting yourself get majorly distracted from your core strategy

and goals can be disastrous.

The key here is knowing very clearly your criteria of what makes a deal one that

you’ll keep and what makes it one that you’ll package. Giving this a lot of thought

and getting it nailed down early on is very important because it will make your

decision making process — and ultimately your business — faster. There are

endless possibilities here but the following are a couple of examples of what I

mean by investing criteria.

An investor buying in and around Glasgow might have these criteria—

1 or 2-bedroom flat, 4-in-a-block or semi-detached (even flats are freehold in

Scotland, so leasehold never becomes an issue for investors)

Minimum of 25% Below Market Value (BMV)

Minimum of £100 net cash flow per month

Less than 10 miles from the city centre.

However, another cash-rich investor (who may be more interested in cash flow

than discount) looking to purchase HMOs in Coventry, would have rather different

criteria—

Minimum 4-bedroom freehold house

Less than £220,000 purchase price

Minimum of 12% gross yield

Less than 0.5 mile from university or hospital

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Everyone will have different criteria and it is essential that you decide on yours

now. It will serve you well in your Deal Packaging business.

Guerrilla Deal Packaging TIP Once you decide on your own investing criteria, there’s no harm in tweaking it as you go along but always base changes on solid business principles instead of lowering your standards just so you can “do a deal”.

The Advantages of Deal Packaging There are some huge advantages of being a deal packager rather than an investor

—or even alongside being an investor as we shall see later. Deal Packaging helps

you to make money from the property market without having to risk a great deal

in terms of investment. The people we listed earlier that make money from a

property deal don’t have to put down a deposit and apply for a mortgage like the

person who actually buys the property. You can make money from the time that

you invest in making deals rather than from the cash that you put down. This

means that you can start this up without having a large amount of working capital

to begin with.

And, unlike a property investment, you can make your money quickly when you

do Deal Packaging. Instead of buying and receiving your income in terms of the

monthly rent from a tenant or waiting until the property has sold, you earn as soon

as you pass the deal on, or as soon as the deal is complete. So Deal Packaging can

not only give you a start in the property market, but also can enable you to make

those deals time after time to generate an income.

There is good money to be earned from Deal Packaging and it is a much more

exciting and interesting way to make a living than working 9 to 5 for someone else.

You will always be on the lookout for a deal and eventually people will seek you

out with opportunities that they have found. Once you start to gain a reputation

as someone that can source property or dispose of property then your deals

become easier and your earning potential gets higher.

You can generate cash flow that can start you out on the road to having enough

capital to start an investment portfolio. There is great potential from Deal

Packaging as you find the properties that need a buyer and link them to people

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that either want to buy (investors or first time buyers) or those than need stock on

their books such as an estate agent. Your role is to source these great deals and

then pass the deal on to a willing buyer.

Guerrilla Deal Packaging TIP If a seller is adamant that they want to full price for their property then refer them to the local agent. You can either negotiate a small referral fee for this or use it to butter up the agent so that they’re likely to pass other deals your way in the future.

This is the perfect strategy for someone who is just starting out with their property

investment business. You may have plans to make big money from property but it

all has to start somewhere. In the early days you will have a lot of time on your

hands and probably little in the way of capital. So these deals that take time to

research are an ideal way of you—

Learning the market

Developing a network of property contacts

Earning money at the same time

Many small property developers have the time to speak to people about

opportunities but not the cash to make money out of them as an investment. This

is the beauty of Deal Packaging – it allows you to earn even if you don’t have the

means to buy.

And at the other end of a property investment career, when you have built a

property portfolio, then Deal Packaging works just as well too. If you have invested

in property for some time then potential deals will be presented to you on a

regular basis. Some will be added to your portfolio but others don’t meet all of

your criteria. Maybe you don’t have the funds to invest in all the great deals you

see or you are looking to specialise in a certain property type. Whatever the

reason, you don’t need to just discard these deals. Through Deal Packaging you

will be able to earn from all of these deals as well. That is the beauty of Deal

Packaging – it works for people at all levels in the property industry.

Deal Packaging isn’t an overnight ‘get rich quick’ scheme. It is a way of making a

good living from the property deals that need to be pulled together. As you spot

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an opportunity you then need to work on finding the right person to deliver that

to. This takes a little time. If you are starting from scratch then it can take a few

months to get your research done, get your marketing to work and to start to pull

deals together. Bear this in mind if you are just starting out on this road.

If you are more established in property investment then you probably already have

deals pass you by on a regular basis and know enough people in the industry to

add Deal Packaging to your business and earn money from it in a very short space

of time.

Before we look at how to become a successful Deal Packager, I promised to tell

you...

HOW I EARNED MY FIRST DEAL

PACKAGING CHEQUE On the sales page for this manual, I promised to reveal the exact steps I followed

to earn that £3,600 cheque I told you about. As I mentioned, I was a little

embarrassed by the tiny amount of work involved. This wasn’t even a fully

“packaged” deal on my part, I let someone else do most of the hard work. I

probably would have gotten an even bigger cheque if I’d packaged it myself but to

be honest, at that stage in my property career, I didn’t have the time nor the

investor contacts to do that. Here's exactly what I did—

The lead was from one of my lead generation websites (it could just as easily

have been from one of my Guerrilla Marketing ads so don’t worry if you don’t

have a website but if you want one, we can help you with our Guerrilla Property

Websites)

I called the seller and established a selling price. He was highly motivated so he

easily agreed to around 30% BMV. So, the lead was now no longer just a lead,

this was a deal and therefore much more valuable. Note that I didn’t get the

seller to sign a lock-out agreement. I should have done that and not doing so

was definitely a risk, but I got away with it this time.

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Next, I passed the deal to a company that had a list of waiting investors looking

for deals. They were able to quickly find a buyer and took care of the rest of the

transaction.

When the deal completed, I received my cheque. (Note that this was around

2007 and the market was very hot, so the fee was a bit higher than what you

might expect for the same deal nowadays. That said, very respectable fees are

still possible!)

Granted, not every transaction will be as smooth as this one of mine but it shows

you what’s possible and demonstrates an easy way for newbies to get up and

running fast without an investor list.

Guerrilla Deal Packaging Bonus If you ever struggle for investor contacts, you can take advantage of our Joint Venture with Us facility in your GDP members area.

LEVELS OF PACKAGING &

WHAT TO CHARGE? Now that we have a broad idea of what Deal Packaging is, we can start to dig a

little deeper. Deal Packaging will help you to make money and get ahead with your

property investment business but there are many different layers to a deal that

can be explored for profit. If you know a typical investment property transaction

then you will know that these can happen in different ways with different levels of

involvement.

Essentially, the more value you add to the deal then your time and effort will be

rewarded with a higher fee.

How can you add more value? Here are just some of the ways—

perform due diligence

negotiate the deal

secure the deal

manage the sales process

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communicate throughout

provide introductions to professionals

manage refurbs

tenant or manage the property

We’ll talk about these in more depth later on.

I see it in many ways like buying a car. Some people just want a car and then they

will deal with everything else. This type of buyer might buy from eBay and take the

risk that it will work out for them.

Others want to know that it has been serviced and has a valid MOT. This is where

the local forecourt comes in and you can get this type of deal there.

Others will want the finance sorted with the same company at the same time. The

large car showrooms cater for this type of client and make as much from the

finance as they do the car sale.

Then there are those that like the full package where you pay a certain amount a

month and you get the car, the servicing, the insurance, the fuel and everything

else thrown in. If you want this type of deal then you go to a main dealer.

Deal Packaging can work in the same way. We will look at different ways of

packaging a deal in this chapter, but you don’t have to be constrained to what is

written here. Your contacts, the deals you find and your local market will

determine which parts of the process you package and which you leave for the

buyer to sort out themselves.

A simple deal This is quite simply where you find a property at a good price and then pass this

on to the relevant buyer in exchange for your fee. The simplest deals can

sometimes be the best as you can earn a good fee for just finding the right property

at the right price and then linking this up with a buyer. It is a clean way to Deal

Package as all you really do is use your contacts at one end of the deal to source a

property and then your contacts at the other end to source a buyer. It is clean and

quick and you should be able to negotiate a good fee as you pass over the deal.

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The fee is an important part of deal packaging and how and when you get paid

should be integral to the agreements you draw up — more of this later in this

manual. A quick deal will mean that you should get paid quickly. So when you first

start out, the simple deals can often be the best way to go.

As a property professional you will start to see deals arrive on a regular basis so

you can make many of these in a month if you work hard and keep your ear to the

ground. It won’t happen overnight, but once you start to pull quality deals together

then your reputation will grow.

As you develop your contact base, your capital and your confidence then you can

start to look at deals that are a little more complicated. These will take up more of

your time but will also earn you more money.

Guerrilla Deal Packaging TIP The laws of supply and demand apply to Deal Packaging too. You may be able to charge a little more if your client is not in the property investing “community”. If your client is in the community, they may be receiving deals from many sources and can therefore cherry-pick the

best. By the same token, if you have a number of people in your client database “ready to buy” then again, you may be able to safely increase your fee.

A deal with a power team For most people time is money. You are exchanging your time for your clients’

money. When you first go full time in property, you’ll probably have a lot of time

and not a lot of money. If you have been doing this for a while then you have a lot

of contacts and a lot of potential deals passing in front of your eyes and maybe not

the money or the inclination to act on everything you see. Either way, you have

the ability to help people that want to buy but perhaps can’t find the deals that

you can.

Examples include—

First time buyers where both of them work long hours and all they see is what

their estate agent sends them

Property investors that need deals to keep going but perhaps work full-time in

an unrelated business

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Parents that want to buy for their children in a university town away from home

People who are relocating due to work and don’t know the area that they are

moving to

There are many examples of people that don’t have a great deal of time for one

reason or another but want or need to buy property. So as well as fulfilling their

needs, you are able to earn money from this too.

People who do not have any time to source a property may not have the time to

source all the professionals needed to get the transaction processed either. So

they might need your help in finding a quality mortgage adviser, a reliable solicitor

and a thorough surveyor. This is a power team deal.

When you find a property for someone who is cash rich and time poor then you

can help them on all sorts of levels because they don’t have the time to deal with

this in their own day. Again you are converting your time into something that they

can buy from you in the form of a packaged property deal that suits their

circumstances.

Once you’ve got a few deals under your belt, you have a couple of options: you

can request a referral fee from your power team players, in return for the business

you refer them (note that this may be hard for solicitors as they’re not strictly

allowed to do this). Alternatively, you can negotiate lower fees that you can pass

on to customers as a perk of doing business with you.

Guerrilla Deal Packaging TIP A great commonsense “litmus test” to tell whether you’re charging the right amount for one of your deals is to ask yourself the question: how much would I pay for this deal?

Hands-free lettings One of the main ways that people can make money from property is good old Buy

to Let. It means that they generate an income that can be used to repay the

mortgage over the years (leaving them with a mortgage-free property at the end

of it) or to generate a cash flow into their bank account.

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A phrase that is gaining ground in investment circles is a “turnkey solution”. This

means that all someone has to do is buy into the project and it is ready for them.

Turnkey property investments appeal to many types of investors that don’t want

the hassle of all the research needed to find a good deal. They would rather have

you—

Research the market to see what appeals to renters

Find the right property deal that fills this need

Negotiate the best price with the existing owner

Hire all the professionals to get the deal in place

Select the best letting agent to manage the property

Find the tenants

Move them in

And once again, you can set these deals up for the right clients and earn good

money from them. If you are putting in more work then again you can charge more

for the deal you have brought together. At each level of the transaction someone

is earning. It isn’t unreasonable for you to earn more as you bring more people

into the equation – they will be earning and you will have more people to manage

to get the process running smoothly.

Here are a couple of ideas on how you might further capitalise on this type of deal:

let and manage the property yourself or set up your own agency to do so. Do

note that, although it may be attractive, as a former letting agency owner, I

know that this option can be a lot more work than you expect, so approach with

caution!

find a good letting agent in your area and negotiate a referral fee with them.

When I had my agency I would happily have paid someone £200-300 for a

referral of this type of long term customer.

RefurBishment and resell Many opportunities that the investor finds are at a bargain price for one reason –

the fact that the property may not be in the best condition and many people walk

away from a project. Even seasoned investors can take a look at a property that

needs a lot of time and money spent on it and think that it might not be for them.

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But that is where you can come in. As a deal packager you can look through the

condition of the property and see what it can look like if the right time and

attention is spent on it. Let’s not forget that when you start out, time is something

that you may have more of.

So if you see an opportunity that needs to be refurbished before it can be sold

back on the market for a nice profit then this is another type of deal that you can

package. You will need to get all of the quotes necessary to have an idea of the

total cost, manage the building work so it runs smoothly and then deal with the

estate agent and potential buyers when it goes back on the market to sell but the

result is that even more of your time can mean even greater earnings from

packaging these complicated but potentially lucrative deals. You will be managing

a project which will probably need some of your attention every working day so

factor in your time if you package a deal like this.

Guerrilla Deal Packaging TIP A refurb and resell deal may also be structured as a joint venture (JV) type deal, indeed it could potentially be more profitable as as 50/50 JV. However, handling it as a packaged deal does have the advantage of presenting less risk for the packager.

You can see a trend emerging here. The more of your time that you put in (which

is also the less time the person you have packaged the deal for puts in) then the

greater the reward. A refurbishment can take up a lot of your time but could bring

a huge return for the investor. You should be taking your cut of this.

Your deals don’t have to be as rigidly structured as this. Some deals will fit nicely

into a neat package like these above but others might need more flexibility. Some

buyers might want you to deal with the whole transaction for them but others

might have a favourite solicitor or builder that they want you to use. While it is

good to have these packages above in mind as you set out, don’t be constrained

by them. Think flexibly and you will be able to find more deals that you can package

and sell for a profit.

Of course, if you'd prefer to minimise your time investment, if you cultivate a

relationship with local developers, another option is to package this type of deal

on to them for a fat fee and let them take care of the rest.

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On the other hand, if you want to get all of that development profit yourself, we’ll

go into deeper detail on how to do this in our Guerrilla Property Development

course.

What you can charge Now all of this hard work comes with a reward. I suggest that you think about this

and plan it out. Pricing on an ad hoc basis for each job can leave you feeling as

though you have no idea how much your next deal will earn you. If you have a set

amount in mind then you will be better able to make this a business and make a

steady income from it.

The actual amount you will charge will be influenced by the part of the country

you are in. House prices in London are hundreds of thousands of pounds more

expensive on average than the Northern half of the United Kingdom so you could

expect to charge more there. A £5,000 fee on a £1 million deal is small fry. A £5,000

fee on a £50,000 deal will look extortionate and will probably have people walking

away.

There are always exceptions though — if that £50,000 deal was to purchase a

property whose market value was £100,000, then smart investors would see your

£5,000 fee as a bargain!

The rough guidelines are as follows, and will vary with how much value/ discount

is in the deal for your customer (percentages are based on the purchase price of

the property, as available to your investor)—

A simple deal – 1.5% to 2%. You will probably want to set a hard lower limit to this

of around £2,000, as it may not be worth your while to do all the work for less than

that

A power team deal – 2% to 3%. You’re adding extra value by supplying reliable

experts, potentially at reduced rates, as part of the deal

Hands-free lettings deal – anything up to 10% and beyond. The customers you

target here (they have to be high-earning, time-poor professionals) and how you

position yourself as a high-end, “we take care of everything, one stop shop” will

have a lot to do with pulling this one off, but for those who do, this is a highly

lucrative part of the market to operate in

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Refurb and resell deal – 10% to 20% of the profit (e.g. around £10,000 to £20,000

on a deal with £100k profit)

Guerrilla Deal Packaging TIP Note that your fee doesn’t have to be based on a percentage of purchase price. Someone packaging HMOs may instead decide to charge a fee based on cash flow. For example, one might structure a fee equating to 6-12 months' worth of the cash flow generated by the HMO. Another

case might be where there is opportunity to add value: to split the title or build another house in the garden for example.

As you can see, there is great money to be earned from Deal Packaging but your

income will all depend on the opportunities that you make for people. You need

to be a good negotiator to get the best price and then work hard at getting

everything in place. Of course you won’t be able to earn

£20,000 from a refurbishment and resell deal unless there is around £50,000 to

£100,000 profit to be made. The person who is investing the money wants their

share as well!

The bottom line is to strive to charge what the deal is “worth” to another investor.

Resist the urge to be greedy though otherwise you’ll end up not selling anything

at all!

Let’s take a look at what all of this can mean for you.

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EXAMPLE OF POTENTIAL

EARNINGS The success (or otherwise) of your Deal Packaging business will depend on how

much time you are able to put into it. As I said on the last chapter, if you put

together a deal that involves managing a team of contractors to refurbish a

property then this will need some of your attention every day. You will need to—

Make sure the contractors are turning up when they agreed

Ensure that all the work is carried out to the spec and to the right standard

Deal with any issues that arise when the refurbishment is taking place (issues

almost always crop up one way or another)

Make sure the property is secure when the builders leave for the day

Pay people on time

And this is just in the build phase. There are tasks to complete as the sale is going

through, in the design phase and after the work is complete to get the property

sold. Your return needs to be worth all the time you put in. Let’s take a look at

what the average Deal Packager can earn in a month, once they get going.

Let’s say you averaged the following Deal Packaging activity in a year:

2 simple deals every month which bring in around £3,000 each so a total of £6,000

can be earned from this.

1 deal with a power team every two months so could bring in around £2,500 per

month on average.

A single hands-free letting deal every quarter. This could earn you around £2,500

per month on average.

One refurbishment and resell every year which could bring you in around £1,500

per month on average.

This is a total of £12,500 per month once you are up and running as a Deal

Packager. You can see why this is becoming an area of the property market that

clever investors are trying to get into.

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Now all of this depends on many factors. As you establish yourself as a property

Deal Packager, your success will depend on—

The amount of time that you can devote to Deal Packaging

The number of deals that you are able to source with your time

Prevailing market conditions

How you are able to market and sell the deals on

Don’t forget in all of this that you need to develop relationships with the right

people. You need a steady supply of new deals to make you money on one side.

You need a set of people to get these deals to once you have established and

packaged them. The relationships you develop will take time so don’t expect that

these deals will fall in your lap and have people queuing up to take them off your

hands in the first few days and weeks of you starting out on this journey.

You have to balance out the number of deals per month with the amount of time

it takes you to manage these deals. Take them on one at a time to begin with so

that you know how much of your time each deal takes. Once you have a grip of

where this will take you then you can ramp this up and start to make more money.

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PREREQUISITES

AND RED TAPE Of course it would be great to just start sourcing deals, getting them packaged and

making money but like any business you need to protect yourself and your

customers. As new avenues to make money appear in the property market, the

regulators look at these avenues with more scrutiny. As property is an investment

or purchase where the buyer is potentially committing hundreds of thousands of

pounds the regulator likes to keep on top of all the companies that are trading in

this area. Just like the mortgage industry is regulated, it is best to appear above

board with your Deal Packaging and get all of the licenses and insurances that you

might need. In short, look after yourself.

The last thing that you want is something to go wrong and leave you exposed. The

cost of setting up a Deal Packaging business is small compared to just about

another aspect of the property industry and it will be a small investment spent

wisely if you make sure that you are covered in all the areas that matter.

Guerrilla Deal Packaging Bonus Use the Red Tape Checklist in your GDP member's area to guide you through this part of setting up your Deal Packaging business.

There are 4 main areas that you will need to consider with regards the regulations

and they are-

1. Money Laundering

2. Data Protection

3. Professional Indemnity

4. Protecting your clients

Let’s take a look at these in more detail.

1. MONEY LAUNDERING As someone involved in the property market you can quite easily come across

people that are looking to launder money. This means that they are attempting to

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hide the proceeds of crime. Buying property and wrapping that cash up in a deal

that looks legitimate is a common way to launder money.

You need to protect yourself in this area. Register with the Financial Conduct

Authority (FCA) for money laundering and you will appear above board. This act

on its own will let people know that you are legitimate and many of the would-be

launderers will stay away from your business as you appear legitimate. Use it in

your marketing, put it on your website and you will gain an air of respectability

straight away.

As part of the registration you will need to carry out reasonable checks on all the

deals you make. If you are suspicious then you have a duty to report this to the

FCA.

2. DATA PROTECTION You will be gathering information from people in order to contact them and keep

them informed of any opportunities that you might come across. This data will be

stored somewhere by you so it is important for you to have a robust data

protection system in place to manage this information.

People trust you with their personal contact information and they want to know

that you will only use it for your Deal Packaging business and that it won’t be sold

on to a third party.

You will need to register with the Information Commissioner's Office (ICO) for a

data protection licence. You need to follow the ICO procedure for collecting and

storing data to be able to legally operate in taking details from clients and using

them in your business.

As you will see as this training manual unfolds, Deal Packaging is an information

business. The more relevant information and contacts that you manage to gather,

the better your business will become. So you must have the trust of people to be

able to get their contact details and put those deals together. Registration with

the ICO will again give you the authority that your fledgling Deal Packaging

company needs. It is another easy way to gain respect and you can use it on your

website to show people that you mean business and will be in this for the long run.

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3. PROFESSIONAL INDEMNITY You will spend your days pulling deals together on property that will exchange

hands for tens of thousands, hundreds of thousands or even millions of pounds.

With your professional outlook to the way that you put deals together you would

hope that you never have an unhappy customer. But it can happen even to the

most professional of companies.

The huge fines being handed out to financial organisations across the globe from

the miss-selling scandals of the last decade are testament to the fact that we don’t

always get it right. Even though you may feel that you have done your best and

packaged a deal that is profitable, your customer may not feel exactly the same

way.

Professional indemnity covers you if a customer makes a claim against you that

your services were not up to scratch. If your customer claims that your services

were inadequate and caused them to lose money, then defending yourself in court

can be a costly business. That is where Professional Indemnity comes in. It will step

in and pay your legal fees to defend your case against the claimant.

Also you must have professional indemnity insurance to fulfil the fourth area. We

will look at that below.

4. PROTECTING YOUR CLIENTS In some cases, it might be that an unhappy customer takes you to court. But it is

far easier for you to have an independent regulator to refer to that can clear up

any confusion between you and a client. You should join one of the Property

Ombudsman Schemes so that you can have this 3rd party to refer to in case of any

dispute.

Guerrilla Deal Packaging TIP When your Ombudsman application has been approved, you have the right to use their logo on your marketing materials. So don’t be shy in placing it on your fliers, business cards and website. This will add great credibility and inspire confidence in your customers to do business with

you. (This also goes for any other relevant associations like the NLA or ARLA, for example.)

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As with the money laundering and data protection, this gives you an air of

respectability for your business. If you have registered with all the relevant

authorities and gained these licences then your customers will see you as a

legitimate business. Deal Packaging is still relatively new in the UK so you may find

that people don’t know what a deal packager is and are reluctant to use your

services. It is only natural for people to shy away from the unknown. Being able to

quote that you are registered with the ICO, the FCA and you offer protection

through an Ombudsman Scheme gives your potential customers peace of mind if

they use your services.

5. CLIENT ACCOUNT One final best practice is to have a client account with your bank that you use to

receive any client deposits and money. We’ll discuss this more later, in the

Reservation Fee section.

You need to make sure that you cover yourself in this business. It costs a little

money and time to get registered with these authorities early on so that you and

your customers are covered. A single claim against your business in any of these

areas can wipe out months or years of hard work. Don’t leave yourself exposed

and remember to use the fact that you are above board in the conversations you

have with your customers. It will mean that you can sleep easier at night and you

know that all of your hard work won’t be wiped out in an instant. Let’s move on to

have a look at the more interesting parts of becoming a deal packager.

6. FCA PROMOTION RULES A combination of the government’s continual desire to stifle entrepreneurialism

and some unscrupulous/ incompetent players in the investing arena led to the

introduction in 2013 of the FCA’s PS13/3 rules for promoting investment

opportunities.

In terms of Deal Packaging, the main thing to note is that you cannot publicly

advertise specific returns on a property deal, when soliciting for investors.

You can find the full FCA ruling here: https://www.fca.org.uk/publication/policy/ps13-03.pdf

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WHAT TYPE

OF DEALS

TO PACKAGE? Now you may look at the figures above and think that you can ramp this up to

make millions from Deal Packaging. Although there is great earning potential you

don’t have enough hours in the day to package every deal that is available in your

region. Some deals are not worth the money, others will take too much hassle and

others you just won’t have the network to pass on after packaging. In short, you

need to think about the type of deals you should package.

The main aim of this is to make money; there is no doubt in that! And you need to

know your market well enough to see opportunities that arise and be able to work

out in a short period of time whether they represent a good deal or not. To know

this it is a case of going out there and doing your homework. You need to know

the market that you will be operating in. Get in and around your local market to

find out things such as—

What type of properties are in demand from buyers

What type of properties are in demand from tenants

The average sale price for properties in the different categories (think first time

buyer, family home, etc)

What the average rent is for properties of different bedrooms multiples

What properties are sticking on the market as estate agents struggle to sell

them

What is the best way to go about this? Get on Rightmove, get out speaking to

estate agents and lettings agents and go to property auctions. The more

information that you can gather on your chosen property market the better it is

for your Deal Packaging business. This is the type of info that will help you to spot

a deal as soon as you see one. Of course you will still probably want to crunch the

figures to just make sure, but you initial instincts will be based on the knowledge

that you have built up about your market. You should be the expert in your market.

So this is the best place to begin. Go and learn all you can about your market. If

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you are unsure about exactly where to target geographically, we go into much

more depth on this in our Guerrilla Property Goldmine white paper.

At this stage it is all about assessing the demand and supply of properties in your

chosen market. Of course you will find more opportunities in your local city than

you will in a village so the first thing to do is assess the market and choose what

will work for you. If there is a university town near to you then you might want to

look at the demand and supply of these properties. If there are large employers

near to you then you might want to consider the type of employees they have and

look at how you can feed that market. At this stage it is about assessing what

opportunities there might be and if you can fulfil these opportunities.

The demand for properties is the overriding factor in all of this. If you want to move

things on quickly (and don’t we all — that’s where the money is) then you will need

to know that there is a strong demand for the deals you put together.

Once you have started to build up knowledge then you may want to look at

becoming a specialist...

In every area of business there are two ways to operate. You can either be e

generalist or a specialist. A generalist looks at trying to do a bit of everything. Think

of your local solicitor that probably tries their hand at—

Matrimonial matter such as divorces and pre-nuptial agreements

Conveyancing such as the legal work for property purchases

Wills and probate

Employment law

Personal injury claims

Because of the fact that they give everything a go they tend to take a little longer

to work things out and they perhaps don’t move as quickly as a specialist. In legal

terms a specialist lawyer might only do commercial law work or just criminal law.

This means that they will have a smaller market to aim at but should get a larger

slice of that market as they are seen as an expert in this area.

Take this to Deal Packaging. A generalist will look at everything that comes their way. They will take a little

more time to assess the ins and outs of every deal because every deal will look

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totally different than the previous one. This means that a generalist might lose out

on some deals because they can’t move quickly enough but they will try to pull

something together for just about everything they find. This might be a time-

consuming process but the rewards are going to be high because every deal will

potentially make money.

A specialist Deal Packager might look for a certain type of property only for

instance –

2 bedroom flats to rent for nurses at the local hospital

Commercial premises for people looking to open a shop

Family homes for sale in an affluent part of town

First time buyer homes in an up and coming part of the city

The actual area that you specialise in will be dictated by your research. If you see

an area of the market that will generate a lot of opportunities then you can

specialise in this area. It means that you will immediately know a good deal when

you see one because it is your area of expertise. It also means that you can target

your marketing and advertising in a specific area (we will look at this later on)

which will make it more targeted and more effective.

The specialist can move quickly and will be able to develop a specialist network of

referrals so that they can move their properties on much more quickly. They

become the go-to person when it comes to their area of expertise but they do miss

out on all the other opportunities that arise because they just don’t deal in that

area.

You need to decide how you will package your deals. You need to go out and find

out all you can about the market. This will help you to decide what the best deals

to package are for your chosen market and will help you to decide whether you

want to be a specialist or a generalist. Once you start to know your market inside

out you have an advantage over many other people in your area. The hands-off

investors won’t have the time to understand the market like you do. This will be

your competitive advantage. This is what will get you customers.

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WHAT MAKES

A DEAL? In this section, we’ll take a look at what makes a deal for the different types of

audience and how to know which audience to go for.

As you start to build your contact base and develop your Deal Packaging business

you will see that there are different types of investors. Many people just lump all

property investors together but if you know the different sectors and can

recognise them then you will be able to see where a deal will fit.

Some professional investors won’t want to touch the type of smaller deal that a

part-time investor would love. So the more you learn about your potential buyers

the better.

Take a look at the different types of investors. You may want to mark your

database with these categories so that you can see which deals will fit where.

A professional investor As you would expect from the title, these guys make their living from dealing in

property. They will see a lot of deals so yours might not get a look in unless it is

really attractive to them. They make their living from spotting the great deals and

moving on them quickly. Many professional investors have rental property on their

books as well as buying and selling for a profit. They will already have their power

team on board so the vast majority of deals you sell to a professional investor will

be a straight find.

You should aim to have professional investors in your database as they can buy a

deal from you in an instant and without a great deal of fuss if they have a large

portfolio. This means that they are vital to your business but they probably don’t

want to be swamped with all the small deals that you might pick up. Save these

for the really big deals and you will find someone that will want to hear from you.

A professional investor will want to see a clear profit of around 20% upwards from

a deal. These are the type of properties that you want to source and send to the

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investors in your database. They are very competitive with each other so ensure

that once someone agrees to a deal that you stick to it.

Guerrilla Deal Packaging TIP Whilst many investors (understandably) do chase BMV deals, it’s important to note that a deal may still be a “deal” if it doesn’t have significant discount. For example, I know investors who would pay a finders fee of 1.5% to purchase an HMO close to market value, as long

as it has great cash flow.

An armchair investor These are the type of people that have a bit of spare cash for any deals that come

their way but usually work full-time away from their property investment. They

don’t have a lot of time to research the market and source deals, which is why you

will sell a lot of your packaged deals to this part of your database.

They will be pleased that they can find someone who can bring them this type of

deal as they won’t have to do the research themselves and they can get deals that

are not seen on the property market through estate agents. This is why you should

aim to have a large part of your database filled with armchair investors that you

can send the appropriate deals to.

An armchair investor would like to see deals in and around 20% profit margin, so

if you source deals that are in this range you should send them to your armchair

investors first.

Guerrilla Deal Packaging TIP Investors will pay a premium for off-market, “exclusive” deals. However, most investors aren’t likely to pay a fee for deals that are already in the public domain, i.e. listed on Rightmove. If you’ve gone direct to the seller and negotiated a discount on the list price then of course that’s a

different story.

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First time Buyer Whether they are a first time investor or a first time buyer for owner occupation,

there is a strong market for you in this group. They don’t know the property market

as well as others and are willing to accept a smaller deal than the others listed

above.

A first time buyer will normally be delighted with a profit margin of around 10%,

so if you come across any deals that a professional or armchair investor shies away

from then your first time buyers might be worth a call.

Of course your fee will vary with these deals and the different investors you sell

them to. The more profit the investor makes then the higher your cut of that profit

should be.

Please note that not all property deals are the same. Many investors will want

freehold properties. Leaseholds, especially associated with flats and apartments,

can cause problems. Short leaseholds, high maintenance fees and service charges

are all issues that the investor does not want to deal with. Deals that you package

that are as hassle-free as possible will stand less chance of collapse and will keep

your buyers happy. The next step is to understand just how long a packaged deal

will take.

DEAL PACKAGING TIMELINE Now you know your market and the type of properties you will be looking to find

then you will want to know how to turn this knowledge into cash – that is what

you are getting into this for! It is important to know at this stage the timescales

involved in Deal Packaging. Any property transaction takes time to go through, so

the way that you package deals, the type of deals that you package and your

agreement with the buyer are all-important in deciding how quickly you get paid.

Guerrilla Deal Packaging Bonus Use the various Timeline Tracker forms in your GDP members area to help track your deals from start to finish.

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As I have said earlier in this manual, this isn’t an overnight success scheme. If you

start to learn your market well and put feelers out that you are looking for property

then it will happen sooner rather than later but you need to remember that it will

all take a little bit of your time. Here’s why—

You start to research your market so that you can work out what is selling and

what is not – this can take anywhere between 6 weeks and 6 months,

depending on how much time you can dedicate to it.

When you know the type of deals you want then you have to speak to contacts,

market the fact that you are looking for property and then find the right deals.

They may not come along every day to begin with so you might have to wait a

few weeks for a deal to come along.

You need to negotiate the right terms that will work for you and your potential

buyers. The negotiations could come really easily and be conducted in one

meeting or they could take over a week.

Once you have agreed terms (more about how to make this legally sound later)

then you have to find a buyer. A great deal might have you only taking a few

hours to find a buyer but a deal that takes a little more explanation might take

a few weeks. More complicated deals have a smaller audience and are more

difficult to move on but they are often more lucrative.

Then the payment schedule depends on what you agree with the buyer. Deals

can be where you agree the fee to be paid up front, where you agree part up

front and part on completion or where it is all paid on completion. Beware of

the last option because not all property purchases actually complete. The

average estate agent budgets for around 1 in 4 falling through.

Then what happens next will depend on the deal you have packaged. If it is a

simple finder’s fee then you will probably want to keep in touch with the buyer

and seller to see how things are progressing. If it is a deal such as the ‘Hands-

free lettings’ or ‘refurbishment and resell’ then you will need to follow through

on all of the other parts of the deal.

Remember that you can offer different parts of packaging on different deals. This

might depend on the type of property you find, the demands of the seller or the

way that the buyer wants to work. Be flexible but understand each part of the

process and what it can mean for you in terms of how much of your time it takes

up.

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Figure 1 – Timeline for a re-sold deal

Figure 1 shows the lifecycle of a typical property transaction from finding the

property to it being re-sold. See where your deals fit into this. Take a look at the

timeline and see where in it you will stop your service (based on the deal you have

put together) and when you will get paid. If you are operating a simple property

find then you will stop at Stage 3 and probably be paid there. If you are working a

refurbishment and resell then you will probably have to wait until the end of the

process to get your fee.

STAGE 1

• You find a property deal

• You negotiate a price with the seller

STAGE 2

• You decide what you will package

• You decide your fee for this

STAGE 3

• You advertise for a buyer

• You agree a price

STAGE 4

• The professionals do their work

• The sale completes

STAGE 5

• Renovation or refurb takes place

• It goes back on the market for sale

STAGE6

• The property is sold again

• Your client makes their profit

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FIGURE 2 – TIMELINE FOR A BUY TO LET DEAL

Figure 2 shows the lifecycle of a typical property transaction from finding the

property to it being rented out. Again you can see where you fit into all of this. If

you simply find then you will probably stop and get paid at Stage 3 again, but if

you are offering a Hands-free lettings deal then you will have to work until the end.

The later in the process you stay working for the client, the more time it will take

up and the higher fee you can charge.

The way that a property deal moves isn’t always in a straight line. If estate agents

are seeing around 1 in 4 deals fall through for one reason or another (and they are

supposed to be the experts in all of this) then you won’t be able to expect that

everything you touch will turn to gold. The best way to keep your deals on a

STAGE 1

• You find a property deal

• You negotiate a price with the seller

STAGE 2

• You decide what you will package

• You decide your fee for this

STAGE 3

• You advertise for a buyer

• You agree a price

STAGE 4

• The professionals do their work

• The sale completes

STAGE 5

• Renovation or refurb takes place

• It goes back on the market for sale

STAGE6

• Tenants are found

• Your client gets their monthly rental income

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smooth path is to communicate with all the parties involved. Keep in touch with

the buyer, the seller, the solicitors, the estate agents, the letting agents, the

builders and anyone else involved in the process so that you can see any issues

before they arise and be in a position to deal with them.

If you are just starting out on this road then the simple deals where you find a

buyer and negotiate an upfront finder’s fee are probably the best way to begin.

This means you can get paid quickly and not be dependent on the intricacies of a

housing transaction. Next we will look at how you can market and negotiate as a

Deal Packager. These areas are the key to your success.

MARKETING & NEGOTIATION Although you need to know your market inside out to be able to pull deals

together, this will mean very little if you can’t find either the right deals or the right

buyers. Knowing the market inside out is great. But knowing where to find the

properties to package and then knowing how to sell them on are the two areas of

this business that will obviously make you money.

So you need a structure in place to make sure this happens. A lot of developing a

successful Deal Packaging business is about having the processes in place that will

facilitate your success. Once you get these procedures working for your day in, day

out every week of the year then you will start to see a constant flow of success

rather than sporadic deals that look great one by one but don’t add up to a

business plan.

One of my old bosses used to say to me, “you need to feed yourself every day.”

Now he wasn’t concerned about my weight, but rather that I needed to set time

aside every day to look for the next deal, further down the line. Even if you are

incredibly busy on a given day you need to think about where the next deal is

coming from. This is the purpose of your marketing efforts.

Marketing needs to be constant so that you stand the best chance of finding the

opportunities and buyers that you need to keep on growing and earning money.

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Guerrilla Deal Packaging TIP It’s important to educate yourself (at least at a high level) on as many different property strategies as possible so that you can spot deals that others would miss. You can’t package a deal if you can’t recognise it as a deal in the first place!

People look at marketing and think that it is TV adverts and glossy brochures, but

it isn’t. There are many forms of marketing and you will find out what works for

you as you go along. Consider the following areas as a starting point and then do

your own research from there to see how marketing can work for your business—

Advertising in the local newspaper

Using social media to reach people online

Joining a local networking group such as BNI to make links with fellow

professionals

Speaking to estate agents, letting agents, property developers and others in the

property industry

Making sure your friends and family know what you are doing and the

opportunities it can bring

Low-cost and free methods like flyers and bandit signs (as covered in more

depth in Guerilla Property Marketing).

The best relationships for Deal Packaging are those that you can develop face to

face and by word of mouth. Adverts might get you noticed but you want to be

trusted too if you are going to find the best deals for sellers and buyers. The more

you can actually get to sit in front of someone and talk business the better.

Deal Packaging is a people business and you need people to know all about what

you do. If they come across an opportunity, then you want their first thought to

be to call you. So to this end you need a website, a set of business cards and you

need to answer your phone. (Or if you're running this alongside a job, at the very

least return calls promptly!) It is amazing how many people in the property

industry don’t answer their phone. Treat each call as potential business.

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Guerrilla Deal Packaging TIP An amazing source of leads are the leads that other investors throw away. For example, in the past I have had agreements with two different English investors who gave me all the Scottish leads that they generated through

their websites. In one case, I agreed to pay them a fee when I purchased one of their leads and in the other case, we paid them on a bulk per-lead basis. Networking with other investors will uncover opportunities like this for you.

Marketing is in everything you do. It is the way you present yourself, it is the

communications you have and it is most obvious in the deals you put together.

Someone that you have packaged a great deal for will be back for more and will

tell their friends and family. Your success with one deal is the start of your

marketing for the next. That goes for the sellers and the buyers too.

But once you have a potential deal on the table then there is more work to do.

Negotiation is an important part of the property industry and there are

negotiations going on at every level—

The seller who wants the estate agent to knock some money off their fee

The solicitor that wants the other party to pay for an indemnity policy

The buyer who wants to pay £20,000 less than the asking price for a property

The tenant that wants £50 off their monthly rent and wants to pay a lower

deposit

The property industry is full of negotiation. This is a skill that you need to learn if

you don’t have it already. Our Guerrilla Property Negotiation course will teach you

how to negotiate property in more depth. But you need to know the basics and

work from there. You will get better at it the more you practice.

No matter how well or badly the negotiations are going you should always have a

red line in mind. This will be the part of the negotiation that you just cannot go

beyond.

It might be the maximum you can pay for a property in order to make a good

deal and a profit

It might be your finder’s fee with a buyer

It might be the monthly rent if you are putting together a hands-free lettings

deal

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It might be the re-sale price on a refurbishment and resell deal

But however the negotiations are going, you need to have worked this figure out

before you start the conversation and then never go beyond it.

Remember all the important factors in the negotiation as you talk about a deal. It

doesn’t have to be done in one sitting or one phone call so don’t be afraid to say,

“I need to think about it,” and go away to do some research or think about the

deal. Especially in the early days it is better to let one slip through your fingers than

to grasp a deal tightly that will end up causing you grief and not make you much

money.

People forget the power of silence in a negotiation. They feel that they have to fill

every gap in the conversation with something. That is when they start to

undermine their position and cede ground to the other side. Although successful

negotiation is a conversation rather than a war, you need to employ some tactics

to get the best deal. Showing your hand is never a good thing. There are times

when you need to keep your mouth shut and let the other side talk. This is a tactic

that you might want to use when trying to get the best deal.

As you have started negotiations after you have done all of your research on the

market then your knowledge will shine through. It is good for people to negotiate

with someone who knows what they are talking about. But the main things that

should come through in all that you do are your enthusiasm and your personality.

People buy people. They might like the look of the deal you have put together but

the way that you present that deal is going to have a huge bearing on how likely

they are to buy from you. In negotiation being likeable is a really vital piece of the

jigsaw that too many people don’t consider. If you are personable, friendly and

passionate when speaking to someone then you have more than your foot in the

door already. Make sure you are that person.

There is so much to write about marketing and negotiation and I want to keep this

manual laser-focused on Deal Packaging, so these are covered in more detail in

separate manuals. Next we will look at protecting your interests.

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LOCK-OUT AGREEMENT So you have found a deal that you want to package and negotiated a great price

with the seller. As you go out to start looking at how you want to package this deal

and for potential buyers, you receive a phone call from the seller to say that they

have had a higher offer and they have agreed to sell to someone else. So all of your

hard work has gone to waste and the money that you hoped to earn from the deal

has disappeared. In a traditional property transaction nobody is legally committed

until contracts have been exchanged, so an agreed sale is dependent on everything

going through with regards the solicitor, the finance and the survey. That is one of

the reasons why estate agents see around 1 in 4 of their deals fall through. The

seller or buyer can pull out at any time up until they sign a contract to agree to

buy.

The buyer could see another property that they prefer and change their attention

to this. The seller could receive a higher offer from another buyer and switch to

them.

These are some of the reasons why people have been calling for a change in the

way that the English and Welsh property markets work (Scottish transactions have

a little more legal commitment built into the start of the process) so that people

can’t walk away from a transaction when so much time and money has been spent.

So in terms of a property deal, if you have a verbal agreement with a seller then

they have no legal commitment to actually sell that property to you at that price,

or for that amount. They say that a verbal agreement isn’t worth the paper it is

written on and this is doubly true with a property transaction. In the scenario I

have described above, there is no legal redress you have to force that seller to

come back to you.

So what can you do? How can you give yourself a better chance of keeping the

deals you find?

Guerrilla Deal Packaging Bonus Use the Lock-Out Agreement or Heads of Terms document templates in your GDP members area to seal the deal with your seller and give you time to line

up your buyer.

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Well, a lock-out agreement will give you the best chance of protecting the work

that you have put into finding and negotiating a deal. Don’t forget that to arrive at

this point in your first deal you will have—

Done your research

Learned your market

Registered with the relevant protection schemes

Marketed to find the deal

Negotiated a good price

Started to look for potential buyers

So the last thing that you want is for this deal to fall out of bed before you have

the chance to agree with a buyer and earn some money. So, as you did with the

insurances and the ombudsman scheme, you need to protect yourself.

A lock-out agreement is a document that states you are the exclusive agent to find

a buyer for an agreed period of time at an agreed price. This gives you the peace

of mind that you can go out there and find a buyer for the deal knowing that you

have some form of legal backing that allows you the time to do this. It will bind the

seller to your terms for a period of time, which is usually stated as a start and end

date. Obviously if someone is looking to sell a property, then they want you to get

on with it, so you need an agreement that has a fairly short time period such as 4

weeks. This gives you sufficient time to pull the deal together and find a buyer but

doesn’t restrict the seller from finding a buyer another way later, if you can’t

source one.

The exclusivity agreement or lock-out gives you the power of time. If you have a

verbal agreement, then you are racing to find a buyer with the knowledge that the

phone could ring at any stage to say that the seller had put it on the market with

an estate agent or that they have had another offer.

Although as time goes by and you become better at finding buyers (your network

will improve for starters) then you won’t need as long as 4 weeks to determine

whether you can find a buyer or not. In the early days you might need a little time.

Getting an agreement for a set period of time lets you find a buyer for the deal in

front of you and get paid.

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Guerrilla Deal Packaging TIP When negotiating, it is always a good idea to tell a seller that you have access to a “network of buyers”. That way, they will not be shocked when someone else (one of your Deal Packaging clients) buys their home. Even

if you plan to buy it yourself, this may still be a good idea, just in case you hit a funding issue.

A lock-out agreement is designed to stop the seller negotiating with anyone else

for the duration of the contract. This is important for you because you will be

spending time and possibly money to find a buyer. Your time and effort should be

rewarded in some way, especially if you start enquiries with a solicitor or builder

to see how the land lies with a particular property. If there are unusual

circumstances (which are more common than you might think in property

transactions) then you may have to seek professional advice so that you can

confidently answer any questions raised by potential buyers. This means that you

may have to put your hand in your pocket. You should have any expenses

reimbursed as part of the agreement if your seller pulls out and wants to deal with

someone else.

SO WHAT IS IN IT FOR THE SELLER? Well they have someone who is willing to out a deal together for a price they have

agreed. The lock-out agreement gives that agent (you) time to find a buyer and

proceed with the purchase. In exchange for their exclusivity you are giving them

peace of mind that you are making enquiries, sorting out any loose ends and

finding a buyer for them. They get to know that you are working on their behalf to

find a buyer for the deal they have agreed to. So a seller doesn’t have to sign a

long contract with an estate agent and some of these are now as long as 26 weeks.

They don’t have to make their sale public, with listings on places such as

Rightmove. They don’t have to conduct viewings and deal with any more

negotiations. They have all they need in you.

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Guerrilla Deal Packaging TIP If you don’t make a deal at first, the seller simply isn’t motivated enough yet. Time is the factor that will make any seller more motivated so always keep in touch, whether by email, text or phone. Don’t pester them though,

every few weeks is fine (if they don’t get in touch with you first!).

Your seller has to have faith in you that the agreement means something. They

need to know that it isn’t just in case you might not find a buyer in the agreed time

frame. They want to know that it is just so you can pull a few things together. So

let them know that you have everything in hand. As with much of Deal Packaging,

regular communication is the key to success. Let them know how you are getting

on and they won’t start to get nervous about the agreement they have signed with

you. The Deal Packager that agrees a 28-day contract and then promptly

disappears for 27 days doesn’t instill confidence.

A lock-out agreement is a useful tool. You will be able to use it to protect the great

deal that you have managed to source and to give you time to make enquiries and

find a suitable buyer. It gives you the confidence that you can take a little time to

get this right.

HEADS OF TERMS Another way to lock the deal in is to use a Heads of Terms document. This is a one-

page document similar to the lock-out agreement but differs in that it can be used

as a basis for an option agreement.

Although not enforceable in a court of law, it can — by mutual agreement — be

used by a solicitor to draw up a legally binding option to buy agreement. However,

in practice you generally wouldn’t do that in a regular Deal Packaging situation.

The aim of all this Deal Packaging is so that you can earn money. So let’s take a

look at how you can structure these payments and make sure that you look after

that hard work that you will put in.

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HOW DO YOU GET PAID? So to get to this point you have found a property, packaged it and found a buyer.

So you might think that your part of a simple transaction is done. If you have put

seller and buyer together then you could be in a position where you walk away

from the transaction with your finder’s fee and be happy.

But you need to consider the other parties in the deal and what they want. A buyer

wants to know that they have a good deal from you. They don’t want to pay you a

fee for arranging the deal and then have the surveyor tell them it needs £50,000

of work or have the solicitor tell them it is a legal minefield.

In traditional property transactions, nothing is done and dusted until contracts

have been exchanged and both parties enter into a legal agreement to buy the

property. This usually happens after—

Any mortgage has been agreed and offered

All of the legal work has been carried out by both parties

The survey has been carried out and assessed

And this generally doesn’t happen until 2 weeks before the completion date and

the property changes hands. This means that somewhere along the way things can

go wrong. So the buyer will probably not want to pay you anything until the ink is

dry and they are happy to proceed. But, as we have seen, it can fall through for a

number of reasons – even the buyer or seller just changing their mind before then.

So you want your money when you put a deal together.

The time and manner that you get paid is important to everyone. The different

times of the deal where you can receive payment may well depend on the type of

deal itself. If you package a hands-free lettings deal in the style we looked at earlier

in the manual, then your buyer will expect you to not only find the property, but

get it ready for the lettings market and find a tenant too. This means that they

won’t want to pay you up front and then rely on your good will to complete all of

the other parts of the agreement. So let’s take a look at all of the different time

points that you might request payment.

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UP FRONT As soon as you find a buyer you may want to request a payment from them. In

many ways you have done what you initially set out to do – find a suitable buyer

for a property – so you should receive some form of payment for the work you

have put in to get to that stage. You should structure some form of payment up

front because you have used a lot of your time and energy to get to this point and

you will no doubt need to use some more in making sure this deal goes through. If

it falls by the wayside for any reason, then you don’t want to end the transaction

with nothing to show for your efforts.

This means that you have positive cash flow sooner in the process and you can

start to look at the next deal with some cash in your pocket. This is a great benefit

of requiring the payment up front.

ON EXCHANGE OF CONTRACTS As we have already discussed, this is the point in the process where both parties

legally agree to buy the property. Once contracts are exchanged then the buyer

and seller cannot back out, so you know that the sale will go through. This means

that both seller and buyer are happy and you can charge your fee, or part of it.

WHEN IT IS RE-SOLD If you are offering a deal where you manage the renovation and re-sale of the

property, then your buyer will expect to pay you when you have carried out this

re-sale. If the buyer only makes their profit when it is ready to be sold on again

then it is only natural that they will want to pay you some or the entire fee when

you achieve that. Until that point all that they have done is pay out. The exchange

of contacts on the re-sale is the point at which they start to make money again.

Although you can’t predict market conditions or see what a future buyer will want

to pay, there will have been some indication from you of the likely future sale price

when you were searching for a buyer. They will want to know that the actual sale

price stacks up against this in some way. Everyone in the transaction will want to

protect their own interest, so you need to protect yours.

WHEN IT IS LET OUT If you are looking for investors on the basis that the deal you have packaged is a

hands-free lettings deal or similar then again, they won’t want to pay you until the

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property has the tenants in that have been referenced and paid their deposit. Your

agreement with the buyer may need to reflect this fact. So you may have to wait

until it is ready for the lettings market and you have found tenants before you get

the final payment. This makes sure that you keep on the case with any renovations

and then help the lettings agent find and vet the tenants quickly. Time is money!

SPLIT FEE You don’t have to look for your fee in one place. You can require 50% up front,

with the rest on exchange of contracts or any other combination. You want to have

a fee up front to protect the way you work and ensure that you—

1. Don’t work hard to put deals together without reward.

2. Don’t end up waiting for a long time for the money to roll in.

This whole business of Deal Packaging is about making you good money on a

regular basis. You can have a large input on this by making regular deals but by

also making sure the payments are structured in a way that rewards you as soon

as possible.

As with your lock-out agreement, you want to put all of this in writing. The

payment schedule should be put in writing and signed by both you and the buyer.

This gives you the legal protection that you need to have peace of mind that you

are going to get paid and when this will happen. Some of this payment being

geared towards the end of the process is also a good thing. It gives the buyer some

protection and it makes sure that you stay with the process throughout. The way

that you manage the buyer is a very important part of becoming a good Deal

Packager so we will look at this in the next chapter.

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EXPECTATION MANAGEMENT

& COMMUNICATION Deal Packaging might feel like it is something that you do in isolation. As you go

out there and find the next deal it is a case of working on your own to get the right

results. But the success of Deal Packaging is the way that you interact with other

people. As well as the network you need to develop in order to find and sell deals,

the communication you have with your customers will make a huge difference to

how successful you are. It is a customer service business model that you are

operating. The better customer service you give, the more successful it is. But what

is customer service? It is a term that is used in every industry from retail to estate

agency but as an overall term it doesn’t give you a great deal of clarity on what to

do.

In Deal Packaging customer service revolves around your communication. If you

are looking for a buyer after signing a lock-out agreement with someone then the

seller that hears nothing from you for weeks on end becomes nervous and starts

to look elsewhere. Even if you do find a buyer close to the deadline they may well

have decided that they don’t want to work with you and they just let the

agreement expire and deal with someone else – someone who communicates well

with them.

Guerrilla Deal Packaging TIP Never assume you know how often a seller needs to be updated. “Regularly” can mean completely different things to different people. The way round this is to simply ask your seller how often they would like to be

updated and then stick to it.

If you package a deal for a refurbishment and resell property and you don’t

communicate well with the buyer then you can end up with someone who doesn’t

want to help you if things take a wobble. The buyer who is informed and feels a

part of the process will take an interest if there is a legal issue or something in

uncovered with the building work. But the buyer who has been ignored

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throughout the process will probably reply that it is your problem and you are paid

to sort it out.

The first step on this road is to manage the expectations of people. Your potential

buyers are not only looking for an investment opportunity that will make them a

lot of money but they are looking for someone they can trust. If you come in with

wild claims about how much money you can make then people may well look at

you as another ‘too good to be true’ scheme. And if it looks too good to be true,

then it probably is. But if people do listen to your tales of riches and invest with

you then if you don’t deliver then they will not be pleased with you. They will look

at the promise you gave and the results you delivered and they—

They could potentially ask for their money back

They might want to sue you for their loss

They won’t buy from you again

They can leave negative reviews of your company online

They will tell their friends and family that you are not to be trusted

So, all of this comes from promises that you can’t hope to deliver. But the same

deal could have left the buyer walking away happy. They could have been satisfied

with the outcome if you had framed it properly in the first place. Let’s take a look

at this in a simple example-

Guerrilla Deal Packaging TIP When it comes to managing your investors’ expectations, it all starts with making sure that they understand the deal. Don’t assume that just because they agree to proceed, they understand the deal (even if they say

they do!). Walk them through it and ask questions to confirm that they understand.

PROPERTY A – OVERSTATED You find a property at £150,000 and the market value is somewhere between

£190,000 and £220,000 It needs work and you have estimates that come in

between £10,000 and £20,000

The rest of the costs are between £4,000 and £5,000

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So you take all of the figures that make the property look its best. You take the

highest sale price (£220,000) and the lowest costs (£14,000) and tell people that it

can make a profit of £56,000.

When it all works through it actually makes a profit of £35,000. Your buyer is

furious.

PROPERTY A – UNDERSTATED You find a property at £150,000 and the market value is somewhere between

£190,000 and £220,000 It needs work and you have estimates that come in

between £10,000 and £20,000

The rest of the costs are between £4,000 and £5,000

So you take all of the figures that sit in the middle ground. You do some more

research and take a sale price in the middle (£200,000) and the highest costs

(£25,000) and tell people that it can make a profit of £25,000 plus.

When it all works through it actually makes a profit of £35,000. Your buyer is

delighted.

So the exact same deal feels very different because of the way that you have

presented it in the first place. Especially in the early days, when you are learning

your craft, you should err on the side of caution and do what so many other

businesses do—

UNDER-PROMISE AND OVER-DELIVER Managing people’s expectations is an important part of business. In this manual,

if I started out by telling you this was the way to make £1 million in less than a year

then it might have been easy to get you to read more. But if you followed all of my

advice and then ended up only making a small proportion of that in year one then

you would be unhappy. That is why the truths are in there that it takes time to

build up a network and you need to work hard at Deal Packaging to become a

success.

Property may not seem it from the outside but it is an ethical business. You are

dealing with professionals such as solicitors and mortgage advisers that are subject

to tight regulation and with a reputation to uphold. You need to treat your Deal

Packaging business in the same way. Look after your customers and they will not

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only be happy and be less likely to complain, but they will recommend others. That

is when word of mouth helps you to become bigger and make more money. All of

this is achieved by looking after people and not ripping them off.

In order for your buyers to trust you, they need to know that you will do what you

have promised. If you deliver a deal to a customer then they want to instruct their

solicitors and pay for a survey in the knowledge that they are shelling out this

money because they are going to buy. But we already know from the statistics that

around 1 in 4 deals with estate agents fall through. So you can’t give a cast-iron

guarantee that the deal will stay together but you can offer alternatives. You can

offer another kind of guarantee to an investor such as a similar property, should

the deal “fall out of bed.” This ensures that you maintain your credibility and you

keep your customers happy.

Guerrilla Deal Packaging Bonus Use the Communication Management form in your GDP members area to keep all the contact details for your deal in one place.

Estate agents have far too many deals fall apart. One of the main reasons for this

is the fact that they don’t communicate well. Once they have an agreed offer from

a buyer they tend to leave well alone unless they get a call that there is an issue.

By this time it is usually too late to do anything about it. Learn from their mistakes.

Regular communication is the key to making sure that there are fewer issues with

a property transaction and that any issues that do arise are dealt with promptly. I

suggest that you work on the ‘agreed next call’ schedule. Every time you speak to

someone you agree the next time you will call. For example if you speak to the

buyer’s solicitor and they say that they are waiting for a reply from the seller’s

solicitor then you first find out when they requested it. You then find out when

they will be next chasing it. You then agree to call shortly after that to see how

they got on. In the meantime you can call the seller’s solicitors to see if you can

help. So every call means something if you work in this way.

One of the guiding principles of customer management is that it takes time and

money to find a customer. Once they are on board it costs far less to service that

customer and keep them happy than it does to find a new customer and start all

over again. If you get investors on your books that are looking to buy multiple

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properties then you should keep them happy and keep selling to them. It is far

easier to sell multiple deals to one investor than have to find a new investor for

each. Become more efficient at what you do and you will have happy customers

and a more cost-effective business model.

POWER TEAM As you will probably know if you have ever bought a property before, you will need

professionals around you to help with the process. Your legal work will need to be

done by a solicitor, your mortgage by a financial adviser and so on. But with the

average person moving home every 8 years, they look for these people at the time

they need them and usually settle for their local solicitor or the mortgage adviser

their friend recommends. You need more than that. As someone that will be

dealing with property deals on a regular basis you need professionals that you can

trust and that you can rely on to help you make these deals happen. You will need

a group of professionals that can help you assess a deal and to bring it together.

Consider this your power team. We will look at the professionals you need in your

team in this chapter.

Builder (RefurB and resell deals only) Closest to the beginning of the deal you will need a builder. If you are looking to

package something that needs more than just a light refurbishment to get it ready

to go back on the market for sale or for rent then you will need the opinion of a

quality builder to give you a good idea of what this might cost. As part of your Deal

Packaging you will need to understand and communicate the costs involved to a

potential buyer. Instead of guesswork with the building costs it makes much more

sense to get a builder to visit the property with you and assess how much they

would charge to do the work you are proposing.

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Architect (Major

refurB and resell deals only) Too many people don't understand what an architect does and how they can help

you with a property transaction. Although it is true that they get involved with

gaining planning permission for an extension or a change of use, they can also be

involved early in the process too. A quality architect will turn up to a building with

a surveyor, discuss your plans, come up with workable solutions and then give you

a cost for the renovations you propose. They can be worth their weight in gold to

a Deal Packager.

Solicitor Every property transaction needs two solicitors to ensure that it will go through.

One looks after the interests of the seller while the other represents the buyer. A

quality solicitor that will act quickly and answer any questions you have will be

invaluable to you in your Deal Packaging business. From setting up contracts to

ensuring that you don't buy a property that might cause issues later on, the

solicitor will help you to build your business in a legally sound way. You will come

to depend on them for a great deal of your business as time goes on and you put

more deals together.

Financial Adviser A financial adviser or mortgage adviser will help you with all the finance associated

with your property purchases. Although you may not be putting your hand in your

pocket to buy, your buyers will want to deal with someone that you recommend

and you know that you can trust. A good financial adviser will make sure the deal

stays together and will also be able to advise your clients on the right insurances

to look after their property. Different properties need different insurances so if

you have one with unusual circumstances (a property that is vacant for some time

while it is being refurbished, a commercial property or a property that is let out)

then you need something other than standard buildings and contents insurance.

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Surveyor This is a professional that every Deal Packager needs to get to know well. They

look at any property in detail and can spot things that the naked eye misses, such

as—

Issues with damp

Roof repairs that might cost thousands

Asbestos used in the building

Double glazing that might be coming to the end of its life and need replacing

Having a survey carried out is going to be the most important part of any property

transaction that you make on behalf of your clients. The few hundred pounds on

a good survey can save thousands if they spot a problem. You can use this

information to renegotiate the price or to pull out if the deal no longer stacks up.

Surveys are the key to quality property purchases for any investor.

Estate agent and Lettings agent These will be useful to you when putting a deal together and when trying to move

it on at the end of the deal. The information that an estate agent or lettings agent

can give you will help you to do things like establish market value or how much it

will rent for once ready. They are experts in the process as this is what they do

every day of their working life so speak to them about the property deals you are

putting together and get information from them to help you assess a deal.

Accountant or tax adviser You and your clients will need to know the tax implications of the property deals

you put together. Personally you will want to know how income from your

packaged deals will affect your tax liability. But for the investor there are other

considerations such as the Capital Gains Tax paid on the sale of a property or the

income tax payable on the monthly rent. A trusted tax adviser will be able to help

you make sure the deals stack up in terms of their personal finance as well as on

paper.

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Recruiting your power team At the start of your Deal Packaging business you may not know where to start with

all of this. Finding quality professionals that you can rely on is more difficult than

just picking up the Yellow Pages or Googling. You want to know that you are hiring

people that can help you to get your business up and running quickly to earn

money.

You can start this process by speaking to people you know. Friends and family will

be able to tell you if they have used a professional that they trust and can

recommend.

Associations like the local landlords association are a good place to speak to people

that are experienced in the property industry and know their way around the

business. They should be able to tell you people that they know, use and trust.

Check online reviews of professionals to see if people that have used them before

would recommend them. You always have to take online reviews with a small

pinch of salt but they will give you a guideline of whether a business looks

trustworthy. Ask prospective power team members if you can speak to people that

have used their service before. A quality professional will be more than happy for

you to speak to others that have received their service so you can find out what

they are like.

Don't be afraid to look elsewhere if the professional you are using doesn't meet

your standards. You want a quality service that you can rely on over a cheap price

so look around if you don't feel you can trust their service to help you in your

business.

At first you may struggle to build up a relationship with some or all of these

professionals. Don't take it to heart. They are all busy people and may not think

that the questions you have are worth their time. But as you do more deals they

will see that you mean business and they will be on hand to help you. Let them

know about your plans. As you start to use a service on a more regular basis you

can start to ask for a discount as you are bringing them a lot of work. Be polite and

courteous at all times but let them know that you will continue to use them and

you want some money off their fees. If they want to keep you as a client then they

will be very likely to accept your request.

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Now you are starting to build the people around you that will help you in your

business you will need to next find the investors that will buy your deals. We will

look at this in the next chapter.

HOW TO FIND INVESTORS As you move through the process of packaging a deal and have something that is

ready to sell you need to consider where you are going to find your buyers. Well,

actually you need to think about this from the start. If you sign short lock-out

agreements (which are the norm) then you only have a relatively short period of

time to find a buyer for your deal before the exclusivity runs out and you can lose

out on the potential income from this deal. So the best way to work is to have a

ready supply of buyers lined up for the deals that you are putting together. You

will find as you spend more time Deal Packaging that your buyers can come in

many shapes and sizes. You will sell to—

First time buyers that want a property but maybe don’t have the time to search

themselves

People looking to move to your area from another part of the country or world

Commercial interests that are looking to expand or relocate

But the biggest group of buyers that you will sell to will be property investors. An

active property investor is always looking for the next deal. They will want to find

properties that are not available on the open market. This gives you the

opportunity to fulfil the needs of these investors.

WHY WOULD AN INVESTOR WANT TO BUY FROM YOU? This would be one who has money to invest but—

They are time-poor and would rather pay someone else to find deals for them

You go direct to the seller so are able to find better deals than they can find

themselves

They might be a new investor who does not have the know-how to find deals

that you do

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So now you know who you are looking for, you need to know how to reach them.

Property investors can be found in many different places. There are often local

landlords associations where people gather to discuss the issues they face and

share common knowledge. This is a good place to start when looking for investors.

You can join a local networking group such as the BNI, where you will see people

from related professions (such as estate agents, solicitors and insolvency

practitioners) that can give you introductions to investors. I was a BNI member

during my time as a letting agent and I found it was a terrific business advantage,

although it is definitely a commitment in terms of time.

Guerrilla Deal Packaging TIP Many investors hang out in forums on websites and on Facebook or LinkedIn. Simply go onto your favourite search engine or Facebook and search for “property investor forum”. You could also search for “property

investor networking <your area>”.

Most Deal Packagers will have to advertise in one way or another to connect to

property investors. But that doesn’t have to be as expensive as it might sound. A

simple website, a social media presence and word of mouth will be an effective

start to not only let investors know that you have a steady supply of property deals

coming their way, but it can help you to find the properties in the first place. Your

social media network probably reaches a few hundred mainly local people, so this

is the ideal place to start advertising that you can find people a great property

investment deal.

Like most of the structure of Deal Packaging this gets easier over time. When you

first start up, you have little reach but as you become more established then you

will have people approach you and you will have to search far less. Social media

and your website are a perfect way to reach as many people as possible for little

cost and in a short space of time. Encourage people to share what you post and

the word will start to get around quickly.

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Guerrilla Deal Packaging TIP In any type of business, referrals from happy customers are the best kind of customers you can get. They already have a level of trust in you because you have dealt with their friend/ family/ colleague. You can cultivate this by asking a satisfied customer to refer you to one or two of

their contacts who might be looking to invest. This is particularly powerful if your customer is, say, a doctor and you ask to be referred to a colleague because you know they’re likely to have money to invest. If you get this strategy right, you may never need to advertise again!

Every time you get a new deal on your books you need to get this message out

there and get the deal sold as soon as you can. Sometimes you need to look

beyond your existing network and look for investors that might not already know

about you. Advertising in the local newspaper can be an effective way to get the

attention of people in the industry (but remember the FCA restrictions on this,

discussed earlier). The more you get the word out there then the easier it will

become for you to place a deal and earn your money. You may want to ask estate

agents if they have any investors on their books that they can’t satisfy. The same

goes with all of the other professionals that you are using as you build up your

power team. They will all know people who are looking to buy property for

investment purposes or otherwise.

Guerrilla Deal Packaging TIP Once you get a bit of experience under your belt, you should be able to get a shot at speaking at local events. The social proof and exposure that this generates will give you a great advantage. I’ve done this several

times and have been able to add many names to my investor database as a result. Whenever you make a contact like this or otherwise, always remember to follow up with them quickly.

All of the contacts you make should be managed in an effective manner. You need

to use a system that give you access to all the information of your investor

contacts, including—

Their name

Their contact details

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What types of deals they are looking for

If you have contacted them before

If you have done business with them before

The records that you keep will help you to place deals as you source them. I

recommend using an autoresponder such as AWeber to store investor emails to

make sure that you can contact people in an efficient and effective manner. These

systems will allow you to filter the right investors and email them details of the

latest deal as soon as you have the information. It gives you the best chance of

moving on the deal you have put together quickly.

Guerrilla Deal Packaging TIP If you are sending out a deal via email to your database, you can follow this up with a text message (saying you’ve emailed a deal) and later a phone call to your key investors. Often your best prospects will be busy so

may appreciate/ require this extra attention to get them over the line.

The speed at which you work is very important. The Deal Packager that can put

together and move deals on in a short space of time will become more trusted by

sellers, increase their income and find fewer deals fall out of bed. This is a winning

combination so having all of your data in an easily accessible format will get you

ahead of the game. It is great to find a quick buyer but you also need to know that

they are serious. The next chapter we’ll talk about how we can help you, if you’re

ever struggling to find investors to buy your deals.

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JOINT VENTURE

WITH US Don’t forget that you always have the option of joint venturing with us in order to

sell your deals! You might want to use this option:

If you’re just starting out and you’ve not made any buyer contacts yet

In an “emergency” when your own buyer backs out

If you just don’t want the hassle of building up your own buyer database

Here’s how it works:

Simply submit your deal to us here

We vet the deal to ensure it is suitable for our investors

We send out your deal to our database

We connect you to interested parties

You conclude the deal and manage it to completion

You receive your share of the commission we earn upon completion

Some of our buyers have a requirement for dozens of properties for their clients

every month, so as long as the deal is sweet, shifting it should never be a problem!

The next chapter deals with vetting your buyers to make sure that they will do

what they say – namely buy the deal you present them.

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VETTING YOUR BUYER Once you have found a buyer for a deal for the first time it is a great feeling. It

means that all of the hard work that you have put in up to that point has paid off.

You feel like you have become a Deal Packager and your business is heading in the

right direction. It is the culmination of what was probably a lot of hard work to

understand your market, get set up in the right way and market your services. But,

as we have seen, many property deals do not go through to completion for one

reason or another. Although your communication skills can prevent issues from

arising with the transaction, the first thing that you need to be sure about is your

buyer.

Agreeing a deal is one thing. Backing this up with action is something else. So this

chapter will help you to vet your buyer, make sure they are serious and put you on

the right path with a deal.

To understand whether a buyer is in the financial situation to buy will give you

peace of mind when agreeing a deal. If you have packaged a property deal where

the buyer will potentially need to spend hundreds of thousands of pounds to buy

the property you have sourced, then you want to know that they have access to

hundreds of thousands of pounds. You should ask your buyers for proof of funds

before you agree a deal for sale. This can be in different forms, including—

A bank statement that shows the money in their account

An Agreement In Principle from a lender that states they will lend your buyer

the amount

A letter from an accountant or solicitor that states your buyer has access to the

money

The simple fact is that you should see documentary evidence that supports their

claim that they are in a position to buy. A serious and legitimate buyer will

understand this and be able to provide this for you. Don’t be afraid to delay

agreeing the deal until you have seen this proof. It will give you the satisfaction

that your buyer is able to proceed. Without this you are unable to determine

whether they are serious or whether they have agreed something with you on a

whim.

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As part of your money laundering considerations you will probably need to collect

ID verification and address verification to assure the authorities that you are on

top of potential issues. This is another step to legitimising the transaction. Treating

this like an upfront, genuine business transaction will weed out the speculative

buyers who want access to a deal but may not pull through for you in the end. The

more formal it feels the better.

Guerrilla Deal Packaging TIP We spoke earlier about how important it is to know your own investment criteria. It is just as important to know your investors’ criteria too. When you make a serious new contact, make a point to discover exactly what

they are looking for in a deal. If they are inexperienced, you may need to ask probing questions in order to find out their investment goals. Use this info when presenting them with a deal and remind them that it satisfies their previously stated criteria.

The next sign to look out for is when your buyer puts their hand in their pocket.

Agreeing to buy something means very little. We have discussed many times in

this manual that a sale isn’t legally binding until contracts have been signed and

exchanged. Up until that point either party can withdraw for any reason — in fact

they don’t have to give a reason. What often keeps people involved with a

property transaction is the money that they have spent up to that point. Once the

deal starts going through then people will have to pay out for things like—

The survey to assess the property

The mortgage company to process their application

A deposit with the solicitor for doing their work

Once you know that your buyer is starting to pay out money for the necessary

processing of the transaction then again you have a good idea that they are serious

about it.

The longer that you package deals, the easier this will become. I can’t state this

enough and it follows with so many areas of this manual. When you are doing deals

with buyers that you have worked with in the past then you have much more

confidence that they will do what they say. In the early days you have to be trusting

of people to a degree without really knowing them. So speak to people as often as

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you can to listen to their intentions. If people have solid plans for what they want

to do with a property then you have more confidence that they are buying it for a

reason. If you ask a buyer “what are you going to do with the property?” and they

are vague in their replies then you might want to probe some more. People don’t

generally part with hundreds of thousands of pounds on a whim.

Guerrilla Deal Packaging TIP The truth is that you only need a handful of good buyers to run a very successful Deal Packaging business. But always try to have a “backup buyer” lined up just in case your primary buyer takes cold feet or

encounters a problem.

PREPARING YOUR

BUYERS TO BUY A bit of prep work up front goes a long way to ensuring your deals stay together.

Here are a few things you should cover with your buyers in advance:

Get them registered with a solicitor if they aren’t already

Explain your terms and conditions and walk them through the process

Ensure they have deposit funds available now (beware of those who have funds

in long-term accounts that they cannot access immediately!)

Ensure that they are able to get mortgages

The next chapter looks at how your communication skills come into play when you

are marketing these deals and how you can make them look as attractive as

possible.

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MARKETING THE DEALS To attract investors you need to market your deals. This can be done in many ways,

as we have looked at earlier in this manual. But to sell a deal you need to think like

an estate agent. No, you don’t have to wear cheap suits that are too big for you

and unlearn how to fix a tie, but you do need to learn some of the tricks of the

trade to entice people to get in touch with you. The way that people see the deals

you put together impacts massively on whether they will contact you and buy or

just walk away. So you need to plan these. You will only have one chance to

impress.

Guerrilla Deal Packaging TIP A word of caution about putting deals on the web. If you do want to have deals on your site for investors to see, I would recommend having it in a private, password-protected area of the site. The reason being that if a

property is found at a discounted price on the web by a lender, they may refuse to value it later at the required level.

In many property adverts, less is more. This doesn’t mean that you hide aspects of

the property or that you tell lies, but it does mean that you need to give people

enough information to be interested and pick up the phone to you. The secret to

marketing property deals is to get people to call you. If you lay out all the

information from start to finish in the marketing that means that people can draw

their own conclusions. And then they can decide that they will or will not call you.

If you show them enough to get their interest up but leave unanswered questions

then you will generate more calls, which are more chances to do business.

Guerrilla Deal Packaging TIP When marketing your deals, never divulge the full address until someone has enquired with you. You’ll need to give it out to serious buyers so they can do their due diligence but keep it to yourself until then, both for the

privacy of your seller and also to avoid the (albeit low) risk of an investor cutting you out of the deal and going direct to the seller.

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For example, if you have a property that can be a great deal but may be in an area

that some investors shy away from then market the deal with information about

the financial side of things but don’t put in the location. People will call you to find

this out. Some may ring off as soon as they have heard the location but you can

start a conversation with others that might lead to a sale. This means that you

open up the number of possibilities for moving on the deals you have sourced.

Remember all the time that you are probably on the clock with a deal so you need

the enquiries to come in as soon as possible.

You should highlight the good aspects of any deal. This is basic marketing and will

help you to gain more interest in the deals you have to offer. You may want to

enrol in a marketing course at your local college or university to understand more

detail about the power of effective marketing. This manual will give you a good

basic grounding in what to do in this area though. You should always have the best

selling points at the top of any property listing you offer. People will read the main

points before they decide if they will read on and contact you. The better it sounds

to begin with then the more chance you have of converting readers to callers. Then

the next step is to convert callers to buyers.

Always try to funnel your audience to getting in touch with you by phone, or even

better face to face. A personal conversation will have much more power than an

email or an online chat. It can open up doors and avenues that you didn’t know

existed if you communicate in any other way. I recommend that you meet with

someone over a coffee and have a chat about a deal. This means that you

understand each other better and you have the time to iron out any issues before

they become a problem. If someone can’t do this, then email them the deal

summary and follow this up with a phone call.

Guerrilla Deal Packaging Bonus Use the Deal Brochure Template in your GDP members area to professionally and effectively present your deals to your investors.

My Deal Brochure Template is a free bonus with this manual and it will give you a

great start with making sure that your marketing is in line with expectations.

People want to see the information about a deal in an easy to follow format and

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my template will help you to get the most from your listings. Here are a few things

you need to highlight in your deal description:

Exactly what is it that makes this a deal? This will be in your headline deal

summary at the top

What investment is required?

What is the cash flow and Return on Investment (ROI)?

What work is required (if any)?

Due diligence and comparables. I.e. examples of sold (not for sale) properties

nearby from Rightmove etc.

If you are packaging a lease option deal, what is the cash flow and the equity in

the property available for the investor?

What is your fee (and power team fees, if appropriate)?

Call to action; that is what do you want them to do next: call you, email you?

At the end of the day, you want to get this out fast so there’s no need to

overcomplicate your deal description. Think of it in terms of: what info would you

need in order to do the deal yourself?

Guerrilla Deal Packaging TIP ROI (Return on Investment) is probably the most useful metric you can give to an investor. It is an accounting term that indicates the percentage of invested money returned to an investor after the deduction of associated costs. It can be calculated as follows:

𝑅𝑂𝐼 =(𝐺𝑎𝑖𝑛 𝑓𝑟𝑜𝑚 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 − 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡)

𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

Example

If you invest £10,000 in a refurb and you make £5,000 profit then your calculation would be:

(£15,000 − £10,000)

£10,000= 0.5

Multiplying our result by 100 to make it a percentage gives us 50%.

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You have to market your deals like a pro to be able to get the most from them.

People are used to seeing slick adverts for everything they buy nowadays so your

property adverts will have to follow suit. If people want to see slick advertising for

a £1 shower gel, then they sure want to see something professional when they are

parting with tens of thousands of pounds or more. Yes, a really good deal will go

some way to selling itself but you need to present yourself professionally so that

people will take the leap of faith to do business with you.

Guerrilla Deal Packaging TIP If you have a lot of people on your list, I recommend only sending headline details in the initial email and then only send the brochure out to those who request it. That way you know who to follow up with. If your list is just

a few people, then you can send it to all of them as follow up will be easy.

As you look to close a deal then your communication becomes even more

important. You should have all of the information about the property accurately

relayed to the buyer. If they come back to you and quote that you said the property

would rent out for £800 per month when you actually said £650 then you might

have a problem. Putting this in writing will help you to refer back to if the deal does

start to wobble at any stage. Be aware to not make promises in this area, but do

ensure that you can back up what was said at the time.

Guerrilla Deal Packaging TIP When completing your deal packaging brochure, always include photos. If the property doesn’t look great from the outside (many high-yielding investments don’t!) then focus on the interior instead.

There is no better way to conclude a deal than by speaking to someone. Many of

your investors will be busy people but the few minutes to go over and confirm a

deal either face to face or over the phone are invaluable. Try to make sure that

this happens in your property deals and you will get a better response from your

buyers and have them come back to you for more in the future.

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FIGURE 3 – DEAL MARKETING TIMELINE

Figure 3 shows an example timeline from after you have negotiated the deal and

locked it in, up to securing a buyer and commencing the sale process. Note that

you will be communicating with your seller throughout, according to your agreed

schedule.

STAGE 1• Deal is negotiated and locked in with seller.

STAGE 2• Complete your deal packaging brochure template

STAGE 3• Send deal summary out to your list

STAGE 4• Alert key investors by text message

STAGE 5

• Follow up key investors / those who requested the brochure by phone

STAGE6

• Once buyer is located, walk them through the deal to ensure they understand and qualify/ re-qualify their purchasing ability

STAGE 7• Instruct Solicitors

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RESERVATION

FEE If you charge an upfront fee for finding the property (this is definitely

recommended) then the fact that the buyer has paid this is another step in the

right direction with regards knowing if your buyer is serious. Make sure that you

invoice promptly and chase it up when it is due. This way the buyer will be giving

you a very strong indication that they mean business by actually paying you for

your efforts up front.

The fee should be refunded if the deal falls through due to any fault other than

that of the buyer and should be put towards the final finder fee.

Any client monies like this should really be paid into and held in a protected “Client

Account” with a bank, as discussed in the red tape section, earlier. Contact your

bank and they will be able to advise on opening one of these.

The amount depends on the size of the deal but a standard £500 fee should suffice

in most cases.

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THE “BROKER” MODEL:

HOW TO PACKAGE

WITHOUT HAVING TO FIND

DEALS OR INVESTORS There is a way to package deals where you don’t have to go through the time

consuming process of finding deals at one end and then finding buyers at the

other. Some people may not have the time to do all the marketing and research

the market that is needed to be a full-time Deal Packager. There is another way to

make money without needing to have all of this time. This is what I call the

“broker” model. You become someone who sits in the middle of deals and makes

things happen that way.

So in this the broker has contacts that source deals and they have contacts that

invest in properties. Their role is to feed one with the other. So you get the deals

that someone else has sourced and you send them to your contact lists of

investors. The investor that wants to buy gets in touch with you and then you put

them in touch with the person who has sourced the deal for a fee. So you leave

out all the stress of finding deals, don’t have to put in the same marketing as a

standard Deal Packager and still earn. But of course as your role in the process is

much smaller, so is your fee.

This is ideal for someone who has a strong network, particularly in the property

business. Using your contacts to connect others to do business can be a big earner.

Some networking associations work on this very principle. Their idea is if that

Person A finds business for Person B then at some stage in the future Person B will

feel obliged to find something for Person A. A kind of business “if you scratch my

back, I’ll scratch yours.” But as a broker you don’t necessarily want them to look

for business for you in the future – you want them to pay you for your contacts

now. This is how it works when you put your contact list to good use. It is ideal for

someone who speaks to hundreds of other people on a regular basis. It works

wonders for people who are established in their local golf club or a financial adviser

that speaks to people about their investments all day long.

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Being a deal broker is all about putting people in touch with each other. You need

to make contacts with people who source deals and then link this to the investors

that you know. Once you have started to establish yourself in this role then you

will get people from both sides approaching you for the next deal. Now you have

read this manual you are in the perfect position to know what each side wants

from a deal. So use that knowledge to make deals happen and then sit back and

watch your bank account grow.

In the broker role, you don’t have to gain the specialist market knowledge that a

deal packager does because all you are doing is passing on a deal to your contacts.

You don’t have to know enough about the deal to recommend it or not because

you will just pass on the details and let the investor decide. This means that you

are part of the process without having to be too heavily involved. It is your

database of contacts that the person who has sourced the deal needs from you.

Guerrilla Deal Packaging TIP The broker strategy is the exact strategy I currently use in my business. I made a partnership with a quality deal sourcer and I send their deals out to my list and the sourcer pays me a commission for any deal that one of

my investors purchases. Not bad for sending out a few emails!

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ETHICS IN PROPERTY

INVESTING Before we close, I want to say a word about ethics. The deals that you do will say

a lot about you. They need to be conducted in an ethical manner. Your reputation

will grow and work through your local market as time goes on. If you have a

reputation for finding great investments, dealing with people in an ethical manner

and being fair then this will follow you. The way that you treat others will come

back in the way that they treat you in return.

If you agree a deal with someone then you must stick to it. Leave all the games

and messing people around to others. Your focus should be on delivering excellent

customer service and integrity that prompts people to come back to you again and

to recommend you to others. Unfortunately you may come across others that

don’t play by the rules—

The mortgage adviser that falsifies and income to the lender

The solicitor that cuts corners

The buyer that messes you around

Don’t get involved with these people. They are not worth your time or effort. Cut

them out of your business, find an alternative and move on. There is a murky side

to property investment that involves rogue traders and slum landlords. You don’t

want any part of that so protect your ethics and see things are done in the right

way.

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CONCLUSION Deal Packaging is something that can make you good money over a prolonged

period of time. It is a way to earn money by being a part of property deals without

having to either go out to spend tens of thousands to become a solicitor or

mortgage adviser, or to buy property yourself. So any deal packager can sit in the

middle of deals, facilitate their progress and make money from the hard work,

time and effort they put in.

Deal packaging is a great way to make a living. The more you learn about it, the

better you will become. Every deal you make will help the next one to pass through

more easily. Every issue you encounter and overcome means that you will know

how to deal with it the next time.

Now that you have read this manual you are in the ideal position to become a deal

packager. I have given you the knowledge to go Out there and succeed. Refer back

to this manual when you are working and it will become your friend through the

deal packaging business that you set up.

WE WANT YOUR FEEDBACK! We are always wanting to find ways to improve our trainings, so if you have any

suggestions or requests to make this course better, please let us know and we’ll

do our best to provide it, if we think it is relevant to the topic.

WE WANT

YOUR SUCCESS STORY! Hearing about people’s successes makes it all worthwhile so don’t keep yours

secret — let us know about the deals you’ve done, people you’ve helped and

profits you’ve made!