Deal Packaging for Investors

 


If you want to get into deal packaging and sourcing and are thinking of offering the full service from finding a deal, securing it for an investor, costing the works for refurb/conversion, project managing the build phase, furnishing and filling with tenants - the full ‘hands-off’ service to investors, there is one stage in the process that will trip you up more that any and you need to consider carefully if you want to get involved in it or not.

🏗 Building works and dealing with/employing builders 🚩
This is where money is wasted, issues are caused, delays happens, people get ripped off and reputations are lost - and it’s normally not the fault of the ‘deal packager’.
I’ve been there, lots of times, and only truly scaled up in terms of volume of transactions (we’ll complete on 250 + houses this years) when I rid myself of the burden of dealing with refurbs and builders.
I had to learn the hard way that being a project manager isn’t for me and that I can build a bigger, more profitable business with a great reputation by sticking to the disciplines that I’m good at. Not saying yes to everything.
Lots of deal packagers I see find a few deals but then struggle with volume of scaling up because they then spend the next 3 months being a project manager and get bogged down with builder or site issues. This role is very low paid as some charge £5k, for example, for the whole project management which could be as little as £400 a week for a full-time job.
Offering the complete front-to-back service increases your responsibility over the ‘deal’ and you’ll be held accountable right the way through to the re-finance of the completed property which is a big risk.
Sure, there’s plenty of deal packagers who are ex-tradespeople and it’s a natural progression to manage sites for investors as it suits their skill set but the gravy train of people learning to go into ‘sourcing’ did not used to work on the tools.
Being a project manager on a build site is the polar opposite to hunting deals and crunching numbers in terms of skills you require. Some have the full toolbox to cope with all of the roles successfully but it’s worth a cautionary word and some extra thought too.
Scaling up a sourcing or property brokering business to £100k + per month can be done (I’m doing it) - it’s not an entry strategy for me, it’s a business and one that I am proud of and have found a niche in.
Scaling up a deal packaging business where you also do the refurbishments and project management is MUCH harder and the profit margins are much lower, the staff costs are higher, the risks are higher and there’s more variables out of your control.
It’s a good system to find a house, do a good job, charge a fee, and move on.....
Saying no to project management can be the most profitable thing a deal packager can do.

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