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I spoke to Aspire Property Group in Yorkshire couple of weeks ago, to discuss expanding my portfolio up north. Reviews on trust pilot are good but fees seemed quite high. £7k+ is this right? Anyone had experience of working with them? They guarantee 8%+ on their investments.

Are property sourcing companies worth it and does anyone have any experience of working with one? I'm not looking for new builds, off plan etx. Just cheap terraced, semi detached houses around the £100k mark.

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Lenders frequntly prohibit property clubs or any finders fees. They also prohibit guaranteed rental arangements. Its counter inuitive, but it distorts the true rental figures and so presents a larger risk to them than your safe income.

It all depends on how the finders fee is paid and when, and there are firms who say they can get around it and brokers willing to negotiate that, but i wouldnt accept any business sourced through such a company.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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Fee is paid upfront/or half up front other half on completion. Guarantee of 60 days to find a suitable property. Presented with the best of the lot. Other costs equal £5k refurb costs to make it an attractive rental place. The property will be sourced within a high demand area, good schools, low crime rate, good transport links and guaranteed 8% yield with it also having a capital growth potential.

As far as can see mortgage will be only on 75% of property. pay other costs separately.

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You have to look at this from a lender perspective.

Lets imagine you are hiring a property maintenance company, someone who is going to deal with tenants, appointments, respond to emergencies, manage gas safe, electrical safety and fire alarms, and generally ensure your homes stay well maintained. You have two choices:

  • A well established company thats been in business for years, has qualified electricians and plumbers on staff, a depot and branded vans, and an admin team.
  • A "company in a box" setup, like a franchise. Someone who used to work an office job, decided they want to become self employed and they have all the branding but no experience, no "team", a ready made website etc.

Who do you trust the most?

If you need a ready made investment handed to you on a plate and are prepared to pay for that, you dont represent a great client for a lender...

Added to that, you dont really know that the property in question is a great deal. an 8% yeild is only half the problem. This, backs onto the estate thats notorious for this. You think Aspire are going to tell you that? Theres a reason these properties end up on these places, the numbers look right to an investor only interested in returns, but theres a bit more to it than that.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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On 12/3/2021 at 9:15 PM, hb1 said:

I spoke to Aspire Property Group in Yorkshire couple of weeks ago, to discuss expanding my portfolio up north. Reviews on trust pilot are good but fees seemed quite high. £7k+ is this right? Anyone had experience of working with them? They guarantee 8%+ on their investments.

Are property sourcing companies worth it and does anyone have any experience of working with one? I'm not looking for new builds, off plan etx. Just cheap terraced, semi detached houses around the £100k mark.

£7k fee on a £100k property? That is mad!! How can you make the deal stack with a cash fee that high? 

Of course they can guarantee an 8% yield, they just top up the rent from the £7k you gave them! You could buy a random property and have it sit empty for a year and get the same outcome... 

I've spoken to dozens of 'sourcers'. Have yet to meet someone genuine who can actually legitimately source a good deal. Most just pass on whatever crap they can find to the first unsuspecting buyer and charge a finders fee for the privilege of looking on rightmove. Be very wary of deal sourcers...  

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23 minutes ago, sam_f3 said:

£7k fee on a £100k property? That is mad!! How can you make the deal stack with a cash fee that high? 

Of course they can guarantee an 8% yield, they just top up the rent from the £7k you gave them! You could buy a random property and have it sit empty for a year and get the same outcome... 

I've spoken to dozens of 'sourcers'. Have yet to meet someone genuine who can actually legitimately source a good deal. Most just pass on whatever crap they can find to the first unsuspecting buyer and charge a finders fee for the privilege of looking on rightmove. Be very wary of deal sourcers...  

Thanks. It's just good to share and get others thoughts. I've been doing alot of research. Every property I try and buy everyone else seems after and always goes over asking price and they about £130k for £600-650 monthly rent. For that you have to put in around £40k but feel you over paying so capital growth will take longer to come to fruition.

Kind of feel you end up paying over £5k more than u shud for a property anyway so partly think why not give someone who can find a suitable property for me.

It's possibly coming out of frustration of losing out on so many properties recently.

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On 12/7/2021 at 11:00 PM, hb1 said:

Thanks. It's just good to share and get others thoughts. I've been doing alot of research. Every property I try and buy everyone else seems after and always goes over asking price and they about £130k for £600-650 monthly rent. For that you have to put in around £40k but feel you over paying so capital growth will take longer to come to fruition.

Kind of feel you end up paying over £5k more than u shud for a property anyway so partly think why not give someone who can find a suitable property for me.

It's possibly coming out of frustration of losing out on so many properties recently.

That doesn’t sound like it’s to do with being able to source the right deals..sounds like a combination of price vs rent = investment area.

ive made 2 x purchases that have gone through in the last 3 months, £145k x 2 = £800pcm rent each. 
 

I didn’t use a sourcer, didn’t send 10,000 leaflets out or view 10s of properties hoping to get a good deal in a hot market. Just knew my investment area I’ve researched in heavily, knew my numbers in terms of cash flow and % on capital employed and offered what it was worth to me based on that. FYI I paid asking price for both, both have gone up £15k between me offering and now and I’m getting a good monthly return on a 5 year fixed and both houses rented with a week of listing.

I’d be looking at the geography - £7k is a lot of post tax money to be giving to someone…I’d be staying clear, unless that money was coming back with plenty of money following a re-finance , but I doubt it 

 

 

 

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38 minutes ago, ayns said:

I’d be looking at the geography - £7k is a lot of post tax money to be giving to someone…I’d be staying clear, unless that money was coming back with plenty of money following a re-finance , but I doubt it 

When you think a solicitor makes perhaps £1500, your accountant and mortgage broker perhaps £800 - £1000 you realise you are not getting good value for money out of that £7k...

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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  • 4 months later...

I almost fell for this! I was told that they'd source BMW properties so the 7.8K fee wouldn't feel like a cost!. As a first time landlord and buyer (no residential property) I felt it was best to go down this route as I felt that I couldn't compete with experienced landlords, but having done my research I am so glad I went with my gut. 

I have looked into other sourcing companies and this is by far one of the most extortionate because not only do they charge that fee but their legal fees are around 2K, broker fee around 1K and then they charge for everything else under the sun and before you know it you've spent over 10K before you've but down a deposit or paid stamp duty. 

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17 hours ago, edobor said:

I almost fell for this! I was told that they'd source BMW properties so the 7.8K fee wouldn't feel like a cost!. As a first time landlord and buyer (no residential property) I felt it was best to go down this route as I felt that I couldn't compete with experienced landlords, but having done my research I am so glad I went with my gut. 

I have looked into other sourcing companies and this is by far one of the most extortionate because not only do they charge that fee but their legal fees are around 2K, broker fee around 1K and then they charge for everything else under the sun and before you know it you've spent over 10K before you've but down a deposit or paid stamp duty. 

Most property sourcers know less about property than you. They listen to Youtube 'property gurus' who say you can get into property with no money. So they become a deal sourcer.  

If someone wants £3.5k upfront, then why are they going to bother to find you a property? They've already been paid. They'll find someone else to pay an 'upfront free'. Why do they these people charge so much? Because they have no customers. So on the off chance that someone pays them, they try to charge as much as possible

Rather than finding a property sourcer, it's better to find a property. You don't need a property sourcer - you really don't..

If you're interested, I've written a load to introductory articles about property investment. Full details here
 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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Absolutely agree with Vineet on the above there, if i could give one piece of advice to anyone and i have 14 houses, instead of shelling out thousands on property deal sourcers or whatever name they give themselves nowadays and expensive property courses, put it towards your first buy to let property, start of with a regular buy to let house get the feel for managing tenants and the issues that come with it, then start progressing to HMO and SA or other other strategies, i now have a mixture of all three

sure you will make mistakes and it might cost you a few pound but its the best learnings you can get, it always amazes me here the amount of people that panic about being left high and dry by an agency or an Agency that they are having problems, i can't for the life of me work out why in this day and age you need a property Agency and paying them a big chunk of your margin, i can only speak for myself but apart from the serviced accommodation apartments i manage everything else remotely on my phone through whatts app

for example, how do you know the costs the agency are charging you for repairs are legit and they are not adding a bit on for themselves, i have heard many stories of that whereby Agents are charging for broken down boilers etc and billing the landlord but they are in cahoots with the tradesman and adding their own bit on as well as charging you the monthly managing fee

i would be interested to hear other property investors views on this but honestly nowadays build your own team of tradesmen and handymen and people you trust and everything can be done by whatts app.

There are two many chancers and scammers now in property all trying to make a fast buck through the social media platforms, you dont need sourcers or agents and i can testify to that, there is nothing you can't do yourself, do your own research and read plenty and join your own local networking property meet up

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1 hour ago, barry hughes said:

for example, how do you know the costs the agency are charging you for repairs are legit and they are not adding a bit on for themselves, i have heard many stories of that whereby Agents are charging for broken down boilers etc and billing the landlord but they are in cahoots with the tradesman and adding their own bit on as well as charging you the monthly managing fee

i would be interested to hear other property investors views on this but honestly nowadays build your own team of tradesmen and handymen and people you trust and everything can be done by whatts app.

There are two many chancers and scammers now in property all trying to make a fast buck through the social media platforms, you dont need sourcers or agents and i can testify to that, there is nothing you can't do yourself, do your own research and read plenty and join your own local networking property meet up

In agreement with this.

I have agencies manage all my properties, because it's not work I want to do. I can't guarantee that they're not ripping me off, but I think the charges are appropriate (for the most part). I prefer to work with bigger agents. I'm sure they take a cut on the maintenance fees, but I don't think they'll do something completely dodgy, like dip into my deposit funds, or claim that the boiler is broken and split the fees with the tradesmen. 


 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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