Online property portals:
One of the attractions of modern property development is that it can be a spare-time enterprise in the same way that owning rental property can. The arrival of the internet made a huge difference to the way we find deals, heralding the appearance of the property portals. The likes of Rightmove, Zoopla, Estates Gazette, and your local estate agents’ websites suddenly made it possible to look for deals twenty-four hours a day, seven days a week. Enter your search criteria and scan thousands of properties and plots from the comfort of your own laptop, tablet, or phone. Register for free, and you can save your searches and get email alerts when new deals arrive. For those already busy between nine and five – namely most of us – the portals are fantastic news. But while they’re hugely convenient, they’re also convenient for your competition. You’re going to be seeing the same opportunities as every other Tom, Dick, or Harold that has an internet connection. These portals have another downside; they’re not the first place agents would choose to sell properties. And if the portals were your only source of leads, you’d likely only see around half of what’s for sale and will almost certainly be missing out on the best opportunities, as I’ll explain shortly.
These are my favourite people from whom to source deals, and arguably represent your best bet for finding a good project. Let’s first understand why agents don’t always automatically put every property straight on Rightmove. Imagine you were looking for a commercial building to convert into flats and a nice lady called Donna was selling precisely the building you were looking for. As luck would have it, Donna is talking to her friendly local commercial estate agent and has agreed to put it on the market. Now, as you watch yourself sitting there in your pyjamas, glued to Rightmove, you might have thought it’s only a matter of hours before the agent’s team has measured up, taken photos, and listed it on the portals. Any time now, surely a Rightmove alert for Donna’s property will pop into your inbox? Unfortunately for you, that’s not what happens. Instead, much to your horror, Donna’s estate agent digs out her list of hot buyers (a.k.a. her ‘black book’) and calls a handful of people she knows that will almost certainly be interested; a list on which you’re conspicuous by your absence. She tells them that if they get their skates on, she can get them in to have a look at Donna’s property first thing in the morning before it’s gone on the open market. Of the six hot buyers she calls, four view the property, and two make offers, one of which is accepted. This is a great outcome for nearly everyone. Donna is happy because she sold her property within twenty-four hours. The agent’s happy because she earned her commission in record time and without spending any money on advertising (she didn’t even have to produce any particulars or measure up). And the developer who bought it is happy because they got to bag a deal that was effectively off-market. The only person for whom it’s not such a good result is your good self, as you sit at home waiting patiently for a Rightmove alert that will never come – you never even got a whiff. Here are the cold hard facts. Assume most agents will sell a property this way if they can. Only if they can’t, will they revert to the portals. Therefore, you need to learn how to create the right sort of relationships with agents so that you’re one of the hot buyers who gets an early call. We spend a lot of time teaching students how to build relationships with agents – it really is that important.
There are some common mistakes I see when new developers look to engage with commercial agents. Many new developers fail to systemise their engagement strategy. Some even think it’s a good idea to drop by the agent’s office unannounced on the way back from Sainsbury’s to introduce themselves. This is a terrible idea. You want to meet a senior member of the agency, and you want to have some quality time with them. You also want them to take you seriously. Imagine how you’d feel if someone dropped by your office for a meeting on the off-chance, completely unannounced, brandishing a bag of courgettes and heaven knows what else. You’re not going to think them particularly professional, and you probably weren’t twiddling your thumbs waiting for someone to turn up out of the blue either. So how much time would YOU feel like giving them? Two minutes? Less? Perhaps just enough time to make a mental note to swing by Sainsbury’s on the way home? Well, the same applies to agents. Make an appointment with the right person first and get some quality time in the diary. And leave the courgettes at home.
Getting on to an estate agent’s mailing list is easy (in fact, it’s probably easier than getting off it). But simply being on their database won’t nail you that black book phone call. The fact that you’re getting emails from an agent doesn’t mean that the agent remotely remembers who you are. You’ll need to build rapport to the extent that you’re front of mind when a suitable opportunity comes their way. You do this by having a comprehensive follow-up strategy, another area where developers can let themselves down. Not only do you need to stay in touch regularly, but you also need to find agents with whom you can build a great relationship. It won’t be all of them by any stretch, and in fact, many developers have special relationships with only a small number of agents. Luckily, you’re only looking for one deal, at least initially, so you don’t need to be in everyone’s black book. Rapport is your friend here; people prefer to do business with people they like and who are like them, so focus on building relationships rather than just finding deals.