5 steps to setting up your property sourcing business

5 Steps To Setting Up Your Property Sourcing Business Legally and Properly

www.GoliathSourcingAcademy.com


If you’re thinking about setting up a

property sourcing business, one of your

biggest concerns should be how to set up

your business legally and properly. If you

don’t get this right, there could be

consequences to your business and to

you individually as the business owner.


SETTING UP AS A PROPERTY SOURCING BUSINESS1The first thing to think about is whether your business is in

fact, a property sourcing business. If you’re purely sourcing

properties for yourself, rather than packaging and selling on

for a fee, you don’t have to set up as a sourcing business. If

you’re going to be a property sourcing business, you will

need to have all of the relevant legal checks in place.


REGISTERING WITH HMRC AND REGULATORS2The property industry is highly regulated to protect all parties

that are involved in property transactions. Property deal

sourcing comes under the same category as estate agents in

terms of governance, so we have to work by the same rules.

You must register your business with HMRC in the correct

way, so select the relevant set up such as limited company,

sole trader or limited liability partnership.


The property industry is governed by three separate

ombudsman schemes, which offer independent

bodies for customers to raise complaints through.

This would happen if the customer wasn’t happy

with the way that you dealt with their complaint, so

the ombudsman is the next stage of escalation.


The three property ombudsman schemes are:

1. Ombudsman Services

2. The Property Ombudsman (TPO), and the

3. Property Redress Scheme (PRS)

Property deal sourcers must be members of one of these

schemes. Goliath Property Solutions are members of the PRS,

which costs around £95 plus VAT each year.


REGISTER FOR ANTI MONEY LAUNDERING LEGISLATION3Criminals often use the property industry to launder

money. If you’re not familiar with the term, money

laundering basically means that they try to hide the

money that they gained through criminal activity by using

what looks to be legitimate methods.


Property sourcing businesses must be registered with

HMRC for the Anti Money Laundering Legislation. This

means that any suspicions of such activities must be

reported and you can be subjected to fines if you are

deemed to have not taken appropriate action.


TAKING OUT INSURANCES4Setting up the correct types of insurance will protect you from

potential issues such as being sued. In the property industry,

where large sums of money are involved, this is more common

than you might think. For example, you may find yourself in a

situation where investors try to sue you for what they perceive to

be giving incorrect information on a deal. If you take out the

correct types of insurances, you will protect yourself from this.


The two types of insurances we have as brokers, are:

1. Professional Indemnity Insurance, and

2. Public Liability Insurance

It is really important that you get these set up, ours costs

around £500 per year for the combined policy.


REGISTER UNDER DATA PROTECTION ACT5We also have huge responsibilities in regards to data

protection. We are holding lots of personal information about

buyers, sellers, landlords etc. and we are responsible for

protecting that information. Property sourcing businesses

must register under the Data Protection Act with the

Information Commission Officer. This only costs £35 per year

and is really important.


We’re not trying to scare people but property is an industry

where you must comply with all the regulations and

register and set up correctly. Missing anything out could

lead to huge consequences; look at what happened with

PPI/miss-selling etc. You really do need to ensure that you

dot all of the i’s and cross all the t’s when it comes to

setting up a property sourcing business.


FREE RESOURCE

Ensure you’re set up correctly by downloading our free

‘Property Deal Sourcing Business Setup Checklist’

Just go to www.GoliathSourcingAcademy.com/upgrade02

http://www.goliathsourcingacademy.com/session2

For More Property Deal Sourcing Strategies,

Tactics and Tips Listen To

The Goliath Sourcing Academy Podcast at


5 steps to setting up your property sourcing business

Real Estate