How to become a property deal sourcer (and stay compliant)

A deal sourcer finds properties that work for investors, secures a deal with the seller, and introduces it to an investor for a fee. Fees are commonly a few thousand pounds per deal or around 2–3% of the price, usually with a reservation fee paid upfront.

The rules that apply

Introducing buyers and sellers of property counts as estate agency work, so most of the rules for estate agents apply to sourcers too. Trade press reports suggest most sourcers fall short, which is a risk to them and a reassurance you can offer investors if you get it right.

• Register with HMRC for anti-money-laundering supervision, and carry out identity and source-of-funds checks on buyers and sellers.
• Join a government-approved property redress scheme, such as The Property Ombudsman or the Property Redress Scheme.
• Register with the Information Commissioner's Office, because you'll hold personal data.
• Take out professional indemnity insurance.
• Use a written sourcing agreement setting out your fee, refund terms and what you do and don't provide.
• Don't pool investors' money or promise returns: that can turn a deal into a regulated investment.

Running it as a business

• Pick a patch you know and learn its prices, rents and streets.
• Build a list of investors and what each one buys before you need them.
• Write to motivated owners consistently and follow up.
• Track reply rates, offers and fees so you know what works.

Upstream covers the whole process: finding likely sellers, letters with tracked replies, a lead pipeline, investor matching, sourcing agreements and invoices. This guide is general information, not legal advice.