Deal sourcing has become a very popular and lucrative way of making money from property with zero or very little of your own capital required. Like many sectors, there are reputable companies and some not so reputable companies.
As a property mentor, I always teach my mentees that the very first thing you should do before looking at your first deal or speaking to an investor is to become fully compliant. This not only protects your prospective clients but more importantly protects you from any potential disputes that may become extremely costly. I advise my mentees that they should budget around £1,000 – £1,200 to become compliant.
“Deal packaging is the easiest way to make money from property using zero or very little of your own capital.”
Here is our checklist for becoming fully compliant!
Set up a Limited company
Setting up a limited company is the first thing you should do. It’s simple and quick by visiting Companies House. It will cost around £12 to do yourself, alternatively, you may ask your accountant to assist. Once your company is set up, you will be able to apply for your business banking account.
Take out the correct insurances
This should be the next thing that you do. There are two types of insurance policies that you will need.
Public Liability Insurance
This is essential if you are going to be escorting potential buyers on-site visits and will cover you if the buyer injures themselves whilst attending a viewing.
Professional Indemnity Insurance
It can cover compensation claims if your business is sued by a client for making a mistake that leads to financial loss.
Register with a Redress scheme
By law, Property Agents are required to join a government authorised consumer redress scheme. The purpose of this is to give consumers of the Property Agent an escalated complaints procedure if they are unhappy with how their complaint has been dealt with by the Agent. You will need to have the above insurances in place for this application.
Register for Money Laundering Supervision
If you are involved in the transaction of properties, then you will need to register with an anti-money laundering scheme. More information can be found on gov.uk.
Get GDPR Compliant
Every organisation or sole trader who processes personal information needs to pay a data protection fee to the ICO (Information Commissioner’s Office).
If you would like to learn more about how you can make lucrative profits from property deal sourcing get in touch with Belcroft Investor Hub today.