Frequently Asked Questions

The following are frequently asked questions by potential investment clients

Company questions

Why would I use a sourcer?

The reasons our people choose to use a property sourcer is usually becasue of 3 things. Time, Knowledge, and Proximity. A lot of people want to invest in property but just don't have the time needed around their busy schedules to find suitable properties, then go along to viewings and do all the due diligence afterwards. A good sourcer will do all of that for you. They may not know what they're looking for, how to find it, or what to look out for and how to calculate if it's a good investment or not. Property investing is a great way to invest your money, however, there are many ways in which it can go wrong. Using an expert who has the knowledge of the local area in which you're looking is invaluable. The final reason is proximity, a lot of investors don't invest in the area they live. A lot of investors live miles away or even overseas and can't just jump in the car to go to a viewing. Sourcers also usually have relationships with local agents and professionals, and so will get deals sent through to them before they are ever on the market.

How are you different from an estate agent?

We act for the buyer, whereas an estate agent acts for the seller. Our job is to find the right property for the buyer. We will do that by going to multiple estate agents, searching the sales platforms and doing our own marketing and getting sellers coming direct to us.

Why should I choose Donelan Property?

Our focus is very much on you as the client. Our role is to find you the investments you're looking for but aren't able to find yourself. Our sourcers will find out what it is that you're looking for and then go out to find that. We will do all the viewing and provide you with an investment pack with with our findings for only the investments we feel fill your needs. Unlike estate agents or many other sourcing agents, we source to order, so we don't hold a stock of investments that we want to convince you of just to sell them. We try to give you the whole and honest picture on any investment, then its just on you to make the decision!

What is unique about Donelan Property? What makes you different to other sourcers?

We differ from other sourcers in a number of ways, the two main differences for us is 1) we source directly for our clients. We go out to find what it is they're looking for and not the other way around. A lot of property sourcers search for properties and then will try to find an investor to buy that property, we do it the other way around. We also work with a lot of sourcers who do source that way, so it's not a case of the right or wrong way of doing it, they're just different. 2) What really makes us different is how much we stress a deal to make sure that it stacks up for you. We do our best to take every conceivable cost into account when finding you an investment so that the numbers we show you are hopefully a worst case scenario. 3) We also cover multiple areas so it gives us a much bigger scope of properties and opportunities that are right for our clients.

What type of properties do you source?

We source anything within reason but our main focus are buy to let properties, small HMOs and small developments and conversions.

How do you find properties?

We search the whole of market to find properties for our clients. So we search the online platforms such as Rightmove and Zoopla, just like you would, but we also contact estate agents directly and work with a lot of other property sourcers and property developers. We also get a lot of properties sent to us directly to sell from vendors. We always make sure that they're aware that you're our client though and not them. Sometimes they're happy with that and just want a quick sale, and sometimes they're not so we recommend one of our local estate agents to look after them.

Do you source new builds?

We will source whatever the client is looking for but we tend not to search for new builds as a lot of the time they don't stack up for what our investors are looking for.

Do you source BMV deals?

Yes. We can source deals that are below market value, however, we always advise our investors not to focus on this point. We have seen investors lose out on deals in the past because it wasn't 'Below Market Value' but would have been a great deal for them. We try to find out more about what it is the client is looking for and find that for them.

Do you source flats?

Similar to New builds, yes we can source flats/apartments, however we seldom see them stacking up as good investments. If that is what the client is looking for though then we just make sure that they take into account any service charges and grounds rents which may apply.

What geographical areas do you cover?

We can source UK wide. We have sourcers now around the country who can cover the most popular investment areas. If you are specifically looking for property in an area we don't cover directly, then we work with external sourcers who live up to our high standards and values.

Do you source properties overseas?

No. This is something that is in the future plans for the business but for the moment we're staying local!

Do you also manage the properties you source?

Yes we do. We can also manage other properties you may have as well that you haven't sourced through us.

Do you have a specific kind of client or investor that you look to work with?

We mainly work with small buy to let and HMO investors who are reasonably new to investing. This is where we feel we can add the most value and help the client to get more from their investments. However we do also work with larger developers and investment funds.

How do you calculate the work needed on a property?

We estimate work based on average costs of previous jobs we have completed. Our allowances for works are estimates and we always recommend and can arrange for quotes for the works from our build/trade teams before a purchase completes.

How do you calculate the property value?

We calculate this by looking at comparable properties in the area which both are on the market currently and properties that have sold within the last 2 years within a half mile radius.

How do you calculate rents?

Similar to how we calculate property values, we look at comparable properties in the area which are currently on the market to rent.

What are your charges?

We charge a one-off commitment fee of £500, that fee is to show us that you are committed to us as we are to you, but it also gets us to search for properties specific to you and your needs. This also gives you access to our power team of trusted and vetted suppliers. Solicitors, brokers, surveyors, trades, etc. Once that’s paid, we’ll start searching for you straight away. We’ll send any deals we source to you in the form of a deal pack with as much of the information in as possible, this will include information about the property, photos, as well as area information to give you an overview. It could take a week or a month to find you the right property, but we’ll keep searching until we find it! Once we do, the sourcing fee is 2% of the property price, or £3,000, whichever is higher. That’s charged at 50% on the instruction of solicitors, and the last 50% on the completion of the sale. Which means you’ll know that we’ll keep pushing that sale through for you until completion. We’ll do all the chasing of solicitors, brokers, agents, and anyone else, so that you know everything is running as efficiently as possible throughout the whole process.

What does the finder’s fee ‘do’?

Our finders fee covers the time and energy our team puts into finding you the right investment and progressing that deal through to completion.

Why would I pay you a finder's fee for on-market properties?

We are always very open about where we source our properties from. A lot of properties we find from platforms such as Rightmove and Zoopla, and a lot come from properties which haven't quite made it to market yet. If you are purely looking for 'Off Market' properties then we won't be the right sourcing company for you. It takes our team a lot of time to search through all the possible properties that could suit you, arrange viewings for them and do all the due dilligence on them.

Why do you charge a commitment fee?

Our commitment fee shows us that you're as committed to us as we are to you. It also give you access to our trusted power team of vetted professionals. This is a one off fee that we ask all new clients to pay.

Is the £500 commitment fee separate to or a part of the finder’s fee?

This is completely separate to our sourcing fee and you will only ever pay it once when you start working with us.

Why would I pay a commitment fee when I have other sources who don't ask me for one?

We try not to focus on what other companies charge, they will have their reasons as we do for their fees. We charge this to work with the clients that want to work with us, to avoid timewasters and ensure that both the client and we are committed to working together.

How will you make £3,000 of my money work for me?

We source to order, so we go out to the whole of the market. We look at online platforms like Rightmove and Zoopla, as well as contacting estate agents directly. We also have some good relationships with estate agents and other Sourcing agents who send us properties off market before they go online. As well as that we do all the initial viewings on any properties so that you only have to view the property you decide is worth buying, and even then you don't have to view it if you don't want to.

Investment questions

Is now a good time to buy property?

It depends on the reason you're buying. If you're looking to buy for cashflow or long term capital growth then now is always the best time to buy, as we can't predict what is going to happen in the economy. If you're buying to flip (buy and sell for a higher amount), or developments which rely on the market being high once finished then we would recommend looking at the current marketplace a little more. Make sure that you have more than one exit and that all exits are not affected if there is a market crash. Speak to us if you want to know a little more about this at a particular time.

Which areas would you advise to invest in?

This completely depends on the type of investment you're looking for. If you're looking for capital growth then you want to buy in slightly more affluent areas, however if you're buying for yield, or cashflow, then you want to buy in more working class areas. Treat this like a scale, if you want a mix of the two, then the nicer areas you go to will have a lower yield but a higher capital growth potential.

What type of mortgage do I need if I'm buying a commercial property?

Typically for a commercial building you would need a commercial mortgage. However if you're looking to develop the building into residential accomodation then you most likely need bridging finance. We would advise speaking a specialist broker for more information on this.

What type of mortgage do I need for a HMO?

If you're buying a ready made HMO then you would require a specialist HMO mortgage but if you're looking to buy a property to convert to a HMO then as above, you would most likely need bridging finance. But as above, speak to a specialist broker regarding any lending requirements you have.

Is bridging finance risky?

It depends on the reason you're getting the bridging finance. When used correctly with the right advice from reputable professionals, then it is no more risky than any other lending,however, all lending comes with risks. We would strongly advice speaking to a broker before taking out any finance.

When do I need to get a HMO licence?

You need a HMO license on any property with 5 or more unrelated families.

How much does it cost to convert a property to a HMO?

We tend to allow anywhere between £8,000-£15,000 per room as a refurb cost when we're calculating the costs of a HMO build. This is very much an estimate though. We would strongly recommend getting a quote for any works before buying a property and making sure that the deal still works for you. The cost or works will depend on the level of finish that you want but also the amount of work that actually needs doing.

How many bedrooms make a HMO?

Any more than 2 unrelated families in one house makes an HMO. Although an HMO doesn't need to be licensed until there are 5 or more unrelated families.

Who would be the target market for renting the property?

This completely depends on the location of the property. You wouldn't look to rent to students if there was no university/college near by.

How does stamp duty work?

You pay stamp duty on any property purchase over a certain amount. For the most upto date Stamp Duty Land Tax information check out the governments website. https://www.gov.uk/stamp-duty-land-tax.

What is an article 4 area?

An article 4 area is an area in which a local council has brought in an Article 4 Direction. The purpose of this is to restrict permitted development rights. Meaning changes to a property which you could normally do without planning permission, now would need to go through the planning process to be granted permission by the council. These are generally brought in by councils where they want to prohibit certain alterations which might otherwise be allowed under different councils or areas. For instance, an Article 4 direction may be brought in for a conservation area where the council wants to maintain certain architectural features. Another example is where a council might bring it in to a certain area to stop developers converting properties to apartments of HMOs (House in multiple ocupation). An article 4 direction does not mean that you cannot make these changes, it just means that you need to get permission to make them. Also an article 4 direction does not need to brought into an entire council borough and is usually only brought into certain smaller areas within the borough.

Can you recommend builders/Brokers/Solicitors?

Yes. As a benefit of signing up to become a client of Donelan Property, we will give you access to all of our trusted network of professionals.

How much do you need to get started

To invest in property you might not need as much as you think. At Donelan Property we don't agree with the view held by many "gurus" trying to sell training courses in the industry that you don't need any money to get started. However, depending on what you are buying and where, the minimum you need is simply a deposit, stamp duty land tax, legal fees and searches. And depending on the mortgage products available to you, that could all be as little as £10,000. That said, that would be buying a property for the minimum mortgageable amount of £40,000 and hoping that it doesn't need any work doing to it. We recommend the minimum needed to work with us is between £40-50,000. This also takes into account covering the cost of our fees as well as being able to find you a decent investment.

Can I get all my money out of a deal?

The simple answer to this is yes, if you choose the right deal. However this isn't always as simple as many would have you believe. When the market is up, this is even more difficult to do.

What happens if a deal goes wrong?

We do our best to give you as much info as we can so that you can make the best decisions for your investment. We recommend solicitors we have worked with lots in the past and we always recommend getting a survey on any property.However, as with any investing, sometimes things can go wrong. We have relationships with trade professionals around the UK which allow us to help in most instances.

Can I pull out of a deal?

Yes. You are under no obligation to complete on any deal until you have exchanged. However, if you pull out of a deal after we have instructed solicitors, you would forfeit the initial 50% of the sourcing fee which has already been paid. If however you want to pull out of a deal due to for example, cost of works quoted are significantly higher than we have estimated, or a problem has come back on the survey, then we would refund this amount or just transfer it onto the next property we find for you.

How long will it take you to find me a property?

There is no exact answer to this question. It could take a week, a month, or even a year. It completely depends on the type of property you're looking for and the market at the time you're looking. We have usually found your first property within a the first month though.

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We’d love to talk to you about property investment and how we can help you grow. Call us now on 0330 0414 578, or use the contact form and we’ll call you back.

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