Samuel: Hey, what's up guys? This is Thursday, and we call it Thoughtful Thursday. So the
topic of the day is going to be should you buy from a deal sourcer or not? What are the
pros and cons? So I've got my guest on, Alasdair Cunningham, and you are a deal sourcer.
Alasdair: I certainly am.
Samuel: And you've been packaging and selling deals for a year or so.
Alasdair: Yeah.
Samuel: I reckon, I don't know what the largest or most successful deal packing company in
the company is, I don't know, but you must be up there, one of the best, if not the best.
Alasdair: I believe so. I believe that we are the quickest and the best at matching
investors to properties, yeah.
Samuel: And how many properties do you package and sell each month?
Alasdair: About 18, 22, something like that. It varies.
Samuel: That's a lot of properties.
Alasdair: Yeah.
Samuel: So what do you think ... Let's just really discuss this as it's Thoughtful Thursday.
Let's look at the pros and cons.
Alasdair: Let's get thoughtful about it.
Samuel: Let's get thoughtful about this. As someone watching this, someone who's interested
in getting into property, would you advise someone buy from a sourcer, or should they
just find their own properties?
Alasdair: Do you know, it's a question I get a lot, and I think it depends on the person.
It depends on the investor, it depends on their knowledge level, it depends on things
like how much time they've got. I believe that anyone that buys from a sourcer should
know what they're looking at. I don't think anybody should buy from a sourcer as a complete
beginner.
Samuel: The problem is there's so many bad sourcers.
Alasdair: That's why I think they should all know what they're looking at.
Samuel: But even if they're buying from a good sourcer, I personally ... I used to source
properties and package them myself, but I don't do it anymore. I know you do it and
I know we worked together, but I don't do it anymore because I am so passionate that
I think the best thing to do is to just get the knowledge and do it yourself.
Alasdair: Yeah, no, I think everyone should have the knowledge. I think the knowledge
is key.
Samuel: So if you think everyone should get the knowledge and source properties themself,
then is not a little bit hypocritical, you then running a sourcing company?
Alasdair: No, because I think everybody should have the knowledge so they know what they're
looking at, but I deal with many investors that just simply do not have the time. They've
got the knowledge, but they don't have the time.
Samuel: I guess I buy properties.
Alasdair: Well, yeah, you've bought properties through me, because you've got the knowledge,
but you don't have the time.
Samuel: That's true, that's true.
Alasdair: As a company, we're not really looking for investors that have never bought a property
and have never done the knowledge.
Samuel: The ironic thing is, the worst type of investors to sell a deal to are newbies.
Alasdair: I believe so, yes.
Samuel: That was my experience.
Alasdair: Yeah, I being polite. Yeah, they are.
Samuel: Yeah, yeah, because newbies, number one, they ask a million and one questions,
and they may as well get the training anyway. Number two, they just don't know what a good
deal is.
Alasdair: No. The problem I see a lot is when newbies come along, they see this what they
think was a good deal, then they go out and view it, but because their expectations are
... They feel that because they're buying from a sourcer, it's 100% guaranteed results,
it's 100% guaranteed rental income, and it needs minimal work. They don't really listen
properly when you're speaking to them about it.
Samuel: And, also, they'll sign the terms and conditions and stuff-
Alasdair: Without reading it.
Samuel: But then they won't read it properly and they'll only hear what they want to hear.
Alasdair: Yeah, 100%
Samuel: And then six months later, if there's any issues, if there's a leak on the roof,
it'll be your fault, and, suddenly, it's like jeez, if could pay someone £2,000 to make
sure that I had guarantee that the property was always going to be filled, it was always
going to be filled with good tenants, there was never ever going to be any maintenance
issues or problems with the house, there wasn't going to be any problems or hold ups with
the solicitors, everything was going to go perfect, I'd pay my two, three thousand pounds
every time.
Alasdair: I'd pay £10,000 every time, I think, because it'd be much better.
Samuel: But if you could guarantee ... When you were selling a property, if you could
guarantee that, then you wouldn't charge £2,000 or £3,000 you'd charge £10,000 or £20,000.
Alasdair: Exactly. The thing is, it all comes down to expectations.
Samuel: What is it then? What are they paying for? If someone pays you £3,000, or whatever
it is, what are they actually paying you for?
Alasdair: So they're paying for us doing the legwork, essentially. So a busy investor that
hasn't got time to travel, traipse the country looking at all these houses. For instance,
for us to find one house, we've probably looked at 12 to 14 properties.
Samuel: Yeah.
Alasdair: And we've done all the legwork looking at them houses. So we might spend a day and
a half on the road to look at one house and to find one successful deal. So we've done
the legwork, we've done the due diligence, we've found local agents, we've assessed the
property, the condition, and we've done, basically, all the legwork for them. But it's not a guarantee
that it's going to rent out. We've done the homework to make sure that there's good rental
demand-
Samuel: Yeah, but presumably, if someone's buying from you, it's a package deal. So you'll
have done the due diligence on the property, you'll give them the facts and spreadsheets
and the figures, and put them in touch with the agents and all that kind of stuff, but,
again, it's not a 100% guarantee.
Alasdair: No, no, and that's-
Samuel: Because nothing's guaranteed.
Alasdair: No, course it's not. I have had a few instances where we have sold properties
and they've been completed three or four months, and then you get a phone call from them because
there's suddenly a problem in the property, like electrics or something goes wrong, and
they're wanting us to refund them their finders fee because the property had a problem six
months later, and that's not realistic, come on. We're introducing them to a property,
they've got to be realistic about it.
Samuel: And before completion, they've had however long it takes, two months, three months,
to do all their own research.
Alasdair: Surveys, all that sort of stuff, yeah.
Samuel: And do all the surveys and do all the stuff. So, okay, so you're buying from
a deal packager to save yourself time.
Alasdair: Yeah.
Samuel: Is there ever anything wrong with buying from a deal packager because you don't
know how to find the deals? Like, would it be a fair enough thing, say, someone's reasonably
new, they're a business person, they understand investments, but they haven't got their knowledge
to go and find HMOs, they haven't got the understanding, and they say, "Look, I'll pay
you £2,000, £3,000, £4,000, whatever it is, and I just want you to figure it all out
for me," or not?
Alasdair: There is, there is a case for that, as long as they understand the risks of that.
Because if they don't understand what a good investment is, they need to understand the
risks of just putting their faith in somebody else. Now, I do have a lot of people do that.
I have a lot of overseas investors do that. They're not going to come over here and look,
and they've got the knowledge to look at the numbers, but they don't even actually want
to view the property for instance, so they're sort of taking my word on reputation. However,
what I do see as well, if I get a complete newbie come up to me, I listen to them on
the phone, and if I'm not convinced they know what they're talking about, I just send them
to the crash course. I just say, "Look, just get to the crash course, mate. Get educated."
Samuel: The safest thing to do, in my opinion, the safest investment is to invest in yourself.
Alasdair: I believe so, yeah. 100%.
Samuel: I think so. If you invest in a property, it can go wrong. If you invest in a property
sourcer and pay them a fee, it can go wrong. If you invest in yourself and get the knowledge,
no-one can ever take that away from you.
Alasdair: Yeah, and you can't blame anybody else for it going wrong, that's the thing.
Samuel: Well, the only thing that can go wrong when you invest in yourself is that you don't
implement.
Alasdair: Yeah.
Samuel: But that's down to you. As long-
Alasdair: It's down to you, yeah.
Samuel: As long as you're investing in the right kind of knowledge.
Alasdair: 100%.
Samuel: You know, as long as you're not, you know. But I personally think deal packaging
is great. I think it's a great way to save time. I've just paid Paul and Ann a few thousand
pounds and they've found me a great property, and my thinking is, well, if I'd have found
that myself, it would have taken me at least a couple of days.
Alasdair: Yeah.
Samuel: Because, also, when you view properties with estate agents, these days, 50% of the
time, the estate agent doesn't show up, or they cancel at the last minute.
Alasdair: Case in point, I was-
Samuel: And I can't be bothered-
Alasdair: No, I know.
Samuel: ... To stand outside in the rain, calling the agent. I'd rather pay Paul and
Ann £3,000.
Alasdair: I know, 100%.
Samuel: I know how to find it myself, but it's going to take me a couple of days and-
Alasdair: It's not worth it.
Samuel: Messing around. I've got to drive up, probably, three hours away, depending
on where it is, so I'd rather pay someone a fee.
Alasdair: I mean, last Thursday, I was out with a couple of people for a day of viewings,
we had 11 viewings booked, we only got inside five houses.
Samuel: There we go, and that's standard. Some of them sell.
Alasdair: Yeah, some of them. Well, what it was was tenants wouldn't let us in, agents
didn't show up, and that is day to day life of property sourcing.
Samuel: Now, for a deal packager, maybe that's ... Now, you've got a deal packaging business,
so you've got staff, it's a bit different for you, but for someone that's just starting
out and they're brand new and they're deal packaging, if an estate agent doesn't turn
up, it's not a massive deal, because they're learning, and they're out on the road and
they're learning, and for a lot of people just starting out, if you can just sell one
deal a month and make £3,000...
Alasdair: Covers your wage.
Samuel: Like, jeez, take two or three days to find a deal, package and sell it, and then
take the rest of the month off.
Alasdair: Yeah.
Samuel: I think the thing is, everyone is at a different season in their life, everyone's
at a different season, but, you know, sometimes I'll sell deals. I come across ... Although
I don't have set out to sell deals, if I come across an opportunity and I'm like, "You know
what, it's great, but it's outside of my patch, or it doesn't fit my strategy, or I've just
got so much going on right now I can't buy it," I'll pass it on and I'll charge a fee.
But then, the next week or the next month, I'll pay someone a fee.
Alasdair: Yeah, I know.
Samuel: And that happens all the time in the academy.
Alasdair: Yes, it does.
Samuel: Sometimes people will sell, sometimes people will buy.
Alasdair: I think it's a strategy that everyone should have in their toolbox.
Samuel: I do.
Alasdair: But it should be like anything. So when you're going looking at houses, if
you can't buy it, you've got that knowledge and strategy that you can then pass it on.
So I would never discount deal sourcing or deal packaging.
Samuel: It does concern me sometimes though with all these people selling, especially
when people are selling rent to SA deals, and I'm just thinking if it's a no money down
rent to SA deal, then why are you selling it?
Alasdair: Yeah. Look, I'll tell the real reason why is because most of them don't stack.
Samuel: They don't.
Alasdair: They don't stack it up.
Samuel: So they'll rather charge £5,000, make a quick pop, and then disappear. I would
be very careful.
Alasdair: Do you know what I hate, and you see this day to day on social media? People
advertising deals on social media. So they're advertising the latest rent to rent deal,
the latest whatever deal they've got.
Samuel: Why do you hate that?
Alasdair: Because they don't stack. They just so not stack up.
Samuel: Yeah, but if it did stack, would you mind it?
Alasdair: No, because I think it's unprofessional.
Samuel: Why is it unprofessional?
Alasdair: What, advertising a deal on Facebook? No.
Samuel: I advertise my crash course on Facebook.
Alasdair: Ah, no, no. Yeah, but you don't ... No, I just don't agree with it.
Samuel: I know, man.
Alasdair: I don't agree with it.
Samuel: What's wrong with advertising your deal on ... If it's a good deal that stacks?
Alasdair: No, it's unprofessional. I think it's unprofessional, because I would rather
advertise my service on Facebook and get the customer into my database, as opposed to just
doing one quick deal.
Samuel: Okay, what's the ... I don't understand the issue.
Alasdair: Right, I'll tell you why, right, because if you advertise a deal on Facebook,
you might get two or three people message you. Whereas, if you advertise your service
on Facebook, there might not be interested-
Samuel: What's the difference? What is your service?
Alasdair: What, as a deal packager. So if you're advertising my mailing list on Facebook.
Samuel: Okay, yeah.
Alasdair: So, for instance, say an investor sees a deal, but they're not interested in
it, so they won't contact you, but if they know that you're a deal packager and you do
lots of different deals, they'll be more inclined to join your list.
Samuel: I'm not going to argue, because, at the end of the day, you're the best in the
country in this, and when you have deals, I know you sell them within minutes.
Alasdair: I sold two deals this morning, so-
Samuel: Yeah. And you do, and you drop an email out, and it sells within minutes. I
think the scariest thing is people advertising deals on Facebook that don't stack, especially
when they haven't got a reputation, haven't got any comeback, haven't got terms and conditions.
Alasdair: What I'd say to anybody that's going to buy off a deal sourcer is understand the
deal yourself, and make sure ... Don't just think because you're buying from a deal sourcer
that it's a guaranteed. It's not. You must understand the deal.
Samuel: Also, find out what the comeback is.
Alasdair: Yeah.
Samuel: So if the deal goes wrong ... Because when you look at any ... Whenever you go into
any business decision, you need to always look at best case, worst case, likely case.
If the worst case, if the deal packager is saying, "Look, if the figures aren't what
I said, and if it turns out to not work out, and you're not happy once you've viewed the
property and stuff like that, then you can get a refund," then that's not a problem,
because, okay, well, worst case is I'll get a refund, especially if the deal packager's
got a reputation. So they will have to do what they say, because otherwise they'll be
damaging their reputation. No problem. But always look at what's the best case, what's
the worst case, what's the likely case. If the worst case will financially cripple you,
then don't do it.
Alasdair: Yeah, don't do it.
Samuel: Don't get a loan at out of a bank or borrow money from your grandma to put it
all in with some deal sourcer that's promised you the world, who you've just met on Facebook.
Just be sensible. I'm all for taking action.
Alasdair: Common sense prevails massively.
Samuel: But, unfortunately, there are people that will pull a fast one.
Alasdair: I think what happens is, especially people that are new to property, they get
so excited about getting that first deal, that they gloss over all the imperfections
in the deal.
Samuel: And they think if it's a rent to rent, it must be brilliant, but, no, is it a good
rent to rent?
Alasdair: Just because it's no money down doesn't mean you should take it.
Samuel: No, because it might be no money down, but then you might lose money monthly.
Alasdair: Yeah, exactly.
Samuel: Also, there's also ... I know there's scams going on, on places like Gumtree from
the other side, from landlords that ... I don't know if you've seen this.
Alasdair: Yeah.
Samuel: Yeah. They pretend that they're tired landlords, and they go, "Oh, yeah, I'm happy
to give it you on a rent to rent," but, actually, the property doesn't exist.
Alasdair: Mm-hmm (affirmative).
Samuel: Do you know about this?
Alasdair: And they put it on Airbnb.
Samuel: Yeah.
Alasdair: They say, "Mate, I'll tell you what, just pay for six months on Airbnb, and then
we'll sort out contracts because I'm out the country." Yeah, I've seen it.
Samuel: So, again, how would avoid?
Alasdair: Again, common sense. Don't pay anything to just ... I don't know, common sense, mate,
common sense.
Samuel: Well, what is common sense? How would you avoid being scammed by someone on Gumtree?
Alasdair: I would would to speak to them-
Samuel: Because you take people's money before they've seen the house.
Alasdair: Yeah, I do take people's money-
Samuel: But some people would say that's not common sense. Some people would say, "Why
on earth would you pay Alasdair when you've not seen the house?"
Alasdair: Yeah, I agree with that, but I put good terms and conditions in place, and-
Samuel: And a good reputation.
Alasdair: Good reputation, and I'll speak to anybody, whereas most of these Gumtree
leads, you can't ever speak to anybody, it's all done by email. There's never any personal
touch. I'm accessible, I have a website, I have all my address, all my details on the
website. Like I say, anyone can contact me. I'm not here today, gone tomorrow, whereas
these Gumtree guys are. I do hope you're not putting me in the same category as these Gumtree
people.
Samuel: Not at all. So my thoughts are feel free to pay a sourcer, but only if you know
how to do it yourself and you're trying to save yourself time, because ... Or you just
have no intention of going ... Here's another one. If you've no intention of going into
property, and you've got a business that's making a lot of money and you want to dump
that profit into property, but you can't be bothered, you haven't got the time or the
inclination to learn about property, then fine. Find a good person you can trust that
can find the properties, do all the hands and feet on the ground stuff, pay them, no
problem.
Samuel: If you have the knowledge and you want to save yourself time, no problem. But
don't think it's a shortcut. Get the education, because, otherwise, deal packagers will pull
the wool over your eyes.
Alasdair: 100%
Samuel: Because you could make a deal look fantastic on paper, but, in reality, it could
not stack up, so-
Alasdair: The problem is there's too many dodgy deal sourcers out there. They're everywhere.
Samuel: Well, unfortunately, there's good and there's bad people in every industry.
You know, in every industry, there's always good and bad people, so just get the knowledge,
I think.
Alasdair: I completely agree with you.
Samuel: Every YouTube video I ever do, whether it's Thoughtful Thursday, whether it's Winners
Wednesday, whether it's Mentoring Monday, the conclusion is always get educated and
get the knowledge, so I think-
Alasdair: I agree with you. I wouldn't be where I'm at today if you didn't get educated,
so I would say bang on, get educated.
Samuel: So don't let anyone pull the wool over your eyes. Buy from deal packagers. Also,
if you want to learn about property, a really good way to learn is to do, so to pay a deal
packager, you're actually robbing yourself of the experience of figuring out the process.
Alasdair: Well, the reality is, I actually became an accidental deal sourcer. I didn't
choose to do deal sourcing, it's because I was out doing it all, like looking all the
time.
Samuel: You were looking for a lease option agreement for yourself.
Alasdair: Yeah.
Samuel: And then you ended up-
Alasdair: And I ended up finding loads.
Samuel: Yeah.
Alasdair: And just-
Samuel: HMOs.
Alasdair: What do you do with all these deals? So I thought, oh, let's do doing deal sourcing.
Samuel: That's fine.
Alasdair: But because I was out there doing it, learning. So, yeah, just get out there.
Samuel: I encourage people do to deal packaging, but, again, if you're on the other, if you're
a deal packager, do it, but just do it properly, do it ethically. Only sell a house that you
would be prepared to buy yourself if you were under the right circumstances to buy it.
Alasdair: I think it comes down to the person, you know, because it doesn't matter what business
a dodgy person's in, they could make deal sourcing dodgy, they could make buying cars
and selling cars dodgy. If they're a dodgy type of person, they'll always be dodgy. If
they're good people, they'll always do good, it doesn't matter what business they're in.
Samuel: I mean, if you're in the right kind of circles, like I know with us at the crash
course on the academy, we've got dozens of deal packagers on the academy, they're all
brilliant.
Alasdair: They're all very ethical, yeah.
Samuel: Because they've been trained well, so that's awesome. So, if you're considering
buying a property from a deal packager, do it, but get the knowledge first, so they cannot
pull the wool over your eyes.
Alasdair: 100%.
Samuel: And if you're a deal packager, continue doing it, kick some ass, but do it ethically,
and always make sure you look after your clients.
Alasdair: Yeah, absolutely. Completely agree.
Samuel: So that's this week's Thoughtful Thursday. We'll be here same time next week. Put your
comments below, subscribe. Also, if you've got any questions, bang them below and we'll
do our best to answer. See you next time.