Session 6: Securing the Deal – Process, Paperwork, Rapport; How To Create a Business Plan In Under Two Hours Using The Vision Orbit Planning Tool

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Click here to download the Vision Orbit Business Planning Tool

Securing the Deal – Process, Paperwork, Rapport

All too often property deals ‘fall out of bed’. For most sourcers the reasons come down to simply that they aren’t following the right process that ensures they minimise their risk of a deal falling through. In this episode Mark shows you the ways to avoid this happening whatever strategy you’ve adopted. You’ll learn:

  • The step by step process to ensure your deals don’t ‘fall out of bed’
  • How to speed up the process to securing and signing off on a deal
  • How to show sellers that they are dealing and working with ‘proper’ professionals
  • How to build rapport to ensure the deal goes through successfully
How To Create a Business Plan In Under Two Hours Using The Vision Orbit Planning Tool

Do you have clear goals for your business and absolute clarity on how you’re going to achieve them? No? Then you need to listen to this episode. Brad will take you step by step through the process of using the vision orbit business planning tool. This is business planning 2.0! You’ll learn:

  • The steps you need to go through that forces you to think about your business goals and strategies to achieve them
  • How to clearly communicate and articulate your business vision and plans
  • How to get your spouse and family to buy into your business vision
  • How to hold yourself accountable to your business goals


Podcast Episode Highlights

09:10 – Facebook Q&A: What maintenance costs would be covered when negotiating a R2R deal? Is there a maximum amount most people will agree on?
10:50 – Covering Reactive Maintenance
13:30 – Sourcing With Mark
15:33 – The Process for Securing the Deal
16:53 – The Importance of Rapport
18:14 – The Paperwork
18:52 – Electronic Signatures
20:55 – Sourcing from Estate Agents
22:30 – Direct to Seller
23:25 – Rent to Rent
24:32 – Lease Option
30:30 – In The Lab With Brad
32:12 – Reasons for a Business Plan
34:08 – The Vision Orbit Planning Tool
35:51 – Key Business Indicators
38:45 – The Numbers
40:15 – Designating Accountability



“What maintenance costs would be covered when negotiating a R2R deal? Is there a maximum amount most people will agree on?”

Mark: Okay, so this week’s question is from Gaz Thompson from the Facebook group and the Facebook group Q&A this week is “what maintenance costs would be covered when negotiating a rent to rent deal? Is there a maximum amount most people will agree on?”

Now I came across one of our investor clients recently when we were packaging and selling a deal and we were discussing this exact topic. We were discussing the amount of maintenance that they agree to cover under the management agreement, the rent to rent agreement, on a monthly basis.

So they’ve got a maximum monthly amount that they will pay up to and their amount was £50 a month. Now, of course, it’s completely up to you but just as a scale at Goliath Sourcing Academy for the management agreements that we take on board, we actually have a maximum monthly amount of £300. So clearly there is a big, big difference there and there’s no right or wrong reason I suppose to the agreement that you’ve put in place. The key really is to have an amount that you feel comfortable with and an amount that the landlord feels comfortable with in order to move forward with the agreement.

Covering Reactive Maintenance

I thought while I’m doing this answer just very briefly run over why we actually cover a much higher amount per month. So £300 per month might seem quite high to a lot of listeners but what we work on the basis of is at £300 that really covers most, if not all, reactive maintenance issues. So up to £300, it’s going to be something like probably a circuit board, a PCB on a boiler maybe that you pay usually about £200/£250, or maybe some hefty bit of extra work to the guttering or something like that up £300. Basically the stuff that’s not likely to happen very quickly or very often and obviously, we do all the checks prior to taking the property on board.

So we agreed to that amount because what it does is it allows us to regain control for almost all maintenance items. So we don’t have to go and get money from the landlord, get multiple quotes, and get everything else that’s laborious. We can just instruct our own contractors who obviously look after us price-wise and then we can in effect go up to that amount. At £50, the problem with that for us in our opinion is that a lot of jobs will cost more than £50 which means that you’ve got to then go and speak to the landlord and you’ve got to and get permission.

If you’ve got a particularly awkward landlord about spending money, they’re going to ask for two quotes or three quotes. It’s going to become time-consuming. Time-consuming means you get an irate tenant and of course, who’s managing that irate tenant? It’s you as the managing agent. It’s the tenant that you put in, so it’s your relationship with that tenant that will be damaged. So actually, it has the potential to really affect things in the house.

So hopefully, that answered the question. It doesn’t give you a figure but the figure really is what you feel comfortable with. If you’re retaining it for yourself, it’s what you’re comfortable with taking out of the cash flow of the property on a monthly basis if anything was to go wrong. If you’re sourcing to package and sell, what you really want to do is find out from the investor buyer of that deal what they’re prepared to accept and then start the negotiation process from there. So hopefully, that covers that question for you Gaz.

Brad: Fantastic. Thank you for that question guys and if anyone’s got another question, get onto the Facebook group, the Goliath Facebook Group. You can go to goliathfbgroup.com and just post the question and let’s carry on the conversation there. If you’ve got another question related to the question Mark’s just covered then let’s continue having that conversation on the Facebook group.

‘Sourcing With Mark’ – Innovative and Advanced strategies for doing better property deals
Securing the Deal – Process, Paperwork, Rapport

Mark: Hello and welcome to this session’s Sourcing With Mark. This session is going to be titled ‘Securing the Deal – Process, Paperwork, Rapport’. What I’m going to do in this session is I’m going to run through probably one of the most important parts of the property sourcing and deal packaging process. And this will apply both if you’re property sourcing for yourself, so if you’re looking to build your own portfolio or if you’re looking to package and sell deals for a fee.

We’ve got a seven-step system. Step three is secure which is what we’re going to go through in this session and what we mean by secure is the process of sealing the deal with the seller/landlord/property owner. So what we use is a process. We follow a flowchart which takes you through each stage, and what this does is it secures the deal and it gives the seller confidence that they’re dealing with a professional person. It also gives us the confidence that the seller completely understands the process and they completely understand what we’re doing and what we’ve agreed, so that we’re going to avoid any issues with deals falling through towards the latest stages.

So in this session, what we’re going to do is we’re going to run through an overview of the securing process. What I’m also then going to do is I’m going to run into the securing process for four of the main strategies and then I’ll just quickly summarise the session and hopefully, you’ll find it useful. Just to let you know if you are jogging or if you are driving, I know a lot of the listeners from feedback we’ve been getting do listen to the podcasts while they’re out and about, what I’ve done is I’ve made the flowcharts that we have available in the Goliath Sourcing Academy. I’ve made those flowcharts available as the content upgrade this week. So if you haven’t got a chance to write this down, don’t worry, the flowcharts will all be in the content upgrade so hopefully you’ll find those useful.

The Process for Securing the Deal

So in terms of the process for securing the deal, I cannot emphasize enough how much the process of securing the deal begins with the rapport that you build with the seller. Now, building the rapport, telling them the information, explaining everything clearly, explaining everything in terms that they understand. And don’t leave anything out thinking that if it gets to the end, we’re okay if they don’t pick that up. We are ethical sourcers and what we want to do is we want to ensure that the seller, the landlord, or the property owner is completely, 100% fully advised on the deal itself in order to avoid any issues coming up at the end.

The Importance of Rapport

But also if we have that rapport and we have that strength of relationship, what’s going to happen is if another property sourcing agent comes along and let’s say they offer a bit more money and if it’s a below market value property purchase, they may offer slightly higher purchase price, if it’s a rent to rent, they might offer a slightly higher monthly fixed rental income.

The point is that realistically to make it a good deal for them, they’re not going to be able to offer that much. So if you’ve got the rapport, you’ve got the relationship with that seller, you’ve built that, and you’ve explained the full terms and conditions and the full process, the chances are highly unlikely that they’re going to go with someone else. You’ve built the relationship, they like you, they know you and they trust you. If you don’t follow this process and you simply rush it through, don’t spend time nurturing that relationship then yeah, the chances are they probably will take a higher offer and they won’t have any loyalty or allegiance or alliance to you.

So just remember, securing legal documents and process aside, the real securing of the deal is all about building that rapport with the sellers. So remember that.

The Paperwork

But then what we’ve also got to do is we’ve got to then use a form of paperwork because no matter how good that relationship is, what they want to know is they’re dealing with a reputable company or reputable individual, a serious investor. And the best way to do that of course is to demonstrate a process, which involves paperwork. So with regards to the paperwork, there are a number of different bits of paperwork that you would need depending on what type of deal you secure. I’ll come on to those individually in a minute and the flowcharts, again like I mentioned, will be available in the content upgrade of the podcast.

Electronic Signatures

What we also do is we use electronic signatures to get this signed fast. So gone are the days where we had to put the documents in an envelope, we had to put a stamped addressed envelope inside, and then phone after a few days to chase them to return it. Everyone is busy. Everyone finds it hard to find the time to go to the post office. Nowadays, we do everything on electronic signature. We do our management agreements electronic signature. We do our options of purchase and heads of terms. Everything is done electronically.

Now, we use a website called HelloSign. There are a number of different platforms out there for you to choose from. It’s up to you to do your research. We are more than happy with HelloSign. We would certainly recommend it. It’s very cost-effective especially if you’re going to add multiple team members. We’ve got multiple members of the team that’s are able to sign contracts in behalf of the business.

If you just need one, again it’s very cost-effective but once they’ve had that and they’ve signed it electronically, the sellers feel like they’ve committed to that agreement. They’ve agreed the terms. The heads of terms of course are going to outline all the details that we have discussed in the phone call and reiterate what we’ve put in the offer. And then that contract will give the seller that security that they’ve committed to a deal, but more importantly that you’ve committed to that deal as well.

So just very briefly, what I’m going to do is run into the process for the rent to rent strategy, the outright purchase with estate agents, the outright purchase direct to seller, and lease option. And again just to remind you, you don’t need to stop the car and write this down and you don’t need to stop jogging to write this down. This process, the flowcharts are all available in the podcast content upgrade. So we will refer to that during the session as well but just don’t worry too much about having to stop and write this.

Sourcing with Estate Agents

We’ll start off with the estate agents. A lot of you will be property sourcing with the estate agents. Now, with the estate agents, this is a very difficult process to secure. The reason being is that estate agents act on behalf of the client and the one thing they don’t want to do is secure a deal, where in effect, you’re granted exclusivity. This is because of course, they’re going to be pushing hard to get a higher price. The ideal scenario is going to be once your offer is accepted, you want a lockout agreement signed that needs to be signed by the seller. And then once that lockout agreement’s signed, depending on whether you take it for yourself or you source it onto someone else, a memorandum of sale will be issued. This goes to solicitors, where the solicitors will be instructed to act on behalf of the buyer and the seller.

So the process for estate agent securing, your offer is accepted and you request a lockout agreement to be signed usually for a period of 14 to 21 days. That gives you as a property sourcer, time to find the buyer without the risk of anyone coming in and gazumping you. And I won’t lie, this is very hard to get signed and really if you’ve got a good relationship with the agent, they shouldn’t really be pushing things if you can buy quickly. But if you can get a lockout agreement signed, it does offer security for investors that are looking to buy those deals.

Direct to Seller

So direct to seller for an outright purchase is slightly different. Once the offer has been accepted, we send out an offer letter. What we then do is we put together an option to purchase agreement. So it’s not a purchase lease option and it’s not a massive long document. It’s usually about two to three pages long. What this does is detail the purchase price, any special terms and conditions and the length of time, usually a shorter period, so usually about 90 days for you to exercise that option to purchase. So similar to a lockout agreement, it grants you an exclusive period but obviously, it is an option to purchase agreement. Then we go to memorandum of sale and a memorandum of sale is just in effect a heads of terms, which is sent to the solicitors to start the conveyancing process. 

Rent to Rent

Now moving on to rent to rent, a very popular strategy at the moment and of course, the thing with rent to rent is that there is no real solicitor involvement generally and it’s done on sort of a paperwork basis. The process for rent to rent is – the offer is accepted by the offer letter, then we issue a specific heads of terms that’s designed around the guaranteed rent. So it details all the numbers, fixed rental income and also the responsibilities of the landlord and the buyer or the investor for that contract. That includes maintenance limits, renewals of licenses, etc. etc.

And then once the heads of terms have been signed and returned, what we do is we draw up the relevant contract. So depending on if it’s for us, we use a management agreement but there are different types, common law tenancies, commercial leases, or company lets. So these all depend on your client if you’re packaging and selling, or depending on if you want to do the strategy. Seek your own education on this but that paperwork is where you would get that signed and then once parties have signed the contracts, the deal is done.

Lease Option

And finally, the lease option process, just a little bit of extra information in here just because lease options, there is an element of a legal system in here. We always insist that there is legal representation on both sides for lease options. So the process we follow again is the offer letter. Everything starts with an offer letter. That then goes to heads of terms. Then we issue a key facts illustration which explains what a lease option is, then a memorandum of understanding if required, if the lease option is a portfolio for example. And then we instruct solicitors to draw up the option contracts and represent the parties legally.

So all of those are parts of the content upgrade so hopefully you’ll find those useful and just to reiterate, just to conclude this session of Sourcing With Mark, we just want to make sure that we’re following this process every time. We want to ensure that we’re using the right paperwork. We want to make sure that we’re telling sellers absolutely everything there is about the deal. Don’t come up with any hidden terms, any hidden numbers and just make sure, I cannot emphasize enough how you need to maintain that relationship.

You need to build that rapport and continue to stay in touch regularly throughout the progression phase and if you have all that and you get all that done, the chances of your deals falling through at any stage or someone coming in and stealing the deals from you is minimized drastically. So hopefully you find that useful in this week’s Sourcing With Mark.

‘In The Lab With Brad’ – Marketing, systems and outsourcing hacks for property pros
How To Create a Business Plan In Under Two Hours Using The Vision Orbit Planning Tool

Brad: Hi, welcome to In The Lab With Brad. In this episode we look at how to create a business plan in under two hours using the Vision Orbit Planning Tool. Now, the traditional way of creating a business plan is pretty long and boring. Traditional thinking is that you spend days or even weeks, pawing through the details of a document and you come out the other end with this 40-page monster.

In my experience, traditional business plans just don’t really work. It saps all the entrepreneurial energy out of you and you end up just sticking the plan in a drawer never really looking at it again. And really what you want to be doing at this point, at the early stages of your business is actually getting on and doing business and not sitting in an office or wherever for weeks putting a plan together. Now as much as anything, if you’re relatively new to an industry as well, you don’t really know what you don’t know. So if you don’t know what you don’t know, how are you going to make a whole bunch of assumptions about your business in maybe two years’ time? (which is what a traditional business plan would want you to do and go into great detail). You’re going to get it wrong most likely. There’s nothing wrong with getting things wrong but it’s a lot of work which is pretty much based on guess work. But the thing is if you don’t create a business plan then it’s really like getting in a car and not having a destination and a sat nav or a map to get there. You’ll just drift aimlessly. So don’t allow yourself to get into that position and that’s really why you need a business plan.

Reasons for a Business Plan

Well, let’s look into more of those reasons why. So it gives you a process to go through which forces you to think about your business now, in the months and even in the years ahead. And what hurdles you might face and what strategies you ultimately need to adopt in order to overcome those hurdles and achieve the goals that you’ve looked to set for yourself.

You can also clearly communicate and articulate what your visions and future plans of your company are when you’ve got a solid business plan together and it’s really important that you know this. For example when you are in a networking event, it makes it easy and clear for people to understand where you sit, what your positioning is, what you’re looking to try and achieve, and is there an opportunity that you might be able to work with each other based on what your position is.

And moreover, you can use it to ensure that your wife or your husband is on board with your vision. Do they share it? Are they excited about your path in the journey that you’re on? And the business plan, having a clear set of goals and strategies on how you’re going to achieve that is going to help you bring them into your vision much more effectively.

You can also use a business plan to hold yourself accountable. Now, I have the Goliath Property Group business plan for both the academy and solutions pinned up on my office wall. So everyday I’m reminded of what we’re looking to achieve, what our goals are, and what our milestones are, so it’s hugely effective for me.

I know every day I come in and I glance at it and I know what work needs to be done essentially and why we’re doing it, why I’m sitting down and doing the work. So there’s a whole bunch of reasons why you need the business plan. There’s more but I won’t go into them now but rest assured, I think the arguments are clear that you absolutely need one.

The Vision Orbit Planning Tool

If the traditional business plans are bulky and time-consuming to create, as I’ve alluded to before, what do you use? Well a couple of years back, I came across a great planning tool and it’s called the Vision Orbit Planning Tool. Now I’ve given you the opportunity to download it as a complimentary resource to this session so if you go to goliathsourcingacademy.com/session6. It will make more sense to have it in front of you as you listen to the rest of this segment here but it’s not imperative that you absolutely do have it. I’ll do my best to talk you through it and give you some kind of visual cues if you like.

The great thing about the Vision Orbit is that it is a very visual tool, which lends itself well to just being glanced at to remind yourself of your goals and your plans. Like I said, I have it pinned up on my office wall but unlike traditional business plans, this, the Vision Orbit Tool uses very few words. It’s quite top-level and strategic and it doesn’t require you to go into huge levels of detail.

Now recently, me and Mark and Paul, the three Goliath Property Solutions partners, we met and we used the Vision Orbit as the framework to plan for the rest of this year and into the next two to three years as well. So what I’ll do now is I’ll just talk you through how we did that and maybe use what we did as a sum level of example for you.

Key Business Indicators

So as you open up the spreadsheet, you will see there are a number of different tabs. Now, the first tab is three-year growth targets, the second tab is what’s called the Orbit diagram, and the third tab are the objectives. Going back to the first tab, your three-year growth targets. Imagine this in your head. You’ve got four columns. In the first column are the key business indicators. The second, the third and the fourth column are the years 2016, 2017 and 2018.

Now, in the first column are the key business indicators. These are the objectives. These are the end goals essentially for you. So what are you looking to try and achieve? Now, you can choose anything. There are about eight rows here in this vision orbit so you should be looking to choose anything between about three and eight and I would say, a minimum of three. Anything more than eight, it becomes unwieldy. It’s too much detail and we start to verge into that traditional business plan situation again.

Using the example of Goliath Property Solutions, a couple of the key business indicators that we decided to choose were portfolio revenue. As we continue to grow our rent to rent and guaranteed rent portfolio, we need to make sure that we understand what our revenue targets are for the rest of 2016, 2017, and 2018. So that’s one of our key business indicators. Another one of our key business indicators is sourcing fees. So these are obviously fees, which we’re looking to get to bring in from other investors for packaging up deals that we are looking to drive leads for.

So that then leads us onto well if it’s so important to have a portfolio revenue target and we’re looking to bring in packaging and sourcing fees, one of the other key business indicators that drives those two are going to be the number of leads that we bring in. So we made a decision that there were two areas of lead generation that we were going to concentrate on. And we decided to make those as the key business indicators because they were going to drive the packaging fees and the portfolio revenue for us as well. Another key business indicator for us was the number of investors that we have on our list and we wanted to make sure that over 2016, 2017, and 2018, we have a sufficient number of investors growing on our list every single month.

The Numbers

Okay, so now that we’ve got those key business indicators, we need to put numbers against each of those for 2016, 2017, and 2018. Now, I’m not going to go into the numbers but essentially what you end up with is your key business indicators, the numbers associated with each of those. Now, that information gets fed through into a very visual-looking orbit diagram.

Now, imagine a big target like a target if you’re going pellet gun shooting or whatever; archery let’s say. In the middle, the bullseye is the name of your company so that’s Goliath Property Solutions for us. Leading out from all of that and right out at the edge of the target like spokes on a wheel, we’ve got those key business indicators. There are three lines going around the middle of the target moving out on those spokes and that’s where these numbers related to each of the key business indicators can now be found. So it’s very visual. You can see that in a snapshot.

Okay, so let’s move onto the next thing, which is our objectives. In year one, so we’re now drilling down from three years into year one: what is our breakthrough plan for year one? So imagine on this particular tab, you’ve got objectives, you’ve got a number of different objectives so you want to be picking your key business indicators. They become your objectives and you’ve got objective one, which essentially is key business indicator one, objective two, key business indicator two.

So for us, we’ve got objective number one is packaging fees, objective number two would be the investor list, and objective number three is the internal portfolio. Then we need to think very clearly: What are the strategies, the techniques and the methods that we are going to adopt in order to reach those specific targets? So for example for packaging fees, we know that we’re going to continue to work a lot on AdWords and Facebook for our lead generation. And we’re going to look to see if we can build some new campaigns in house, what kind of campaigns are we going to build, etc. etc.

Designating Accountability

So we go into a reasonable amount of detail and each one of us becomes a driver for that how. So particular strategy that we’re going to adopt, one person in the business if it’s just you, it will be you but one person in Goliath Property Solutions for example is responsible for that strategy. So they are answerable in all meetings for that specific strategy and if the strategy doesn’t get implemented on a continuous basis, they are accountable for that.

Now, you can go into even more detail and you probably will go into more detail. However, once you go further beyond the overall strategy of how and the method and the technique of how you are going to achieve your objective, you start going into quite task-based stuff and that’s when we actually stop using the orbit.

There is another tab in the template that I’ve given you where you can use the orbit to actually start plotting out specific tasks but that’s where we move over into Trello because we found it’s just a lot easier to deal with. I wouldn’t create a spreadsheet for tasks. I would put all tasks in Trello. So you can see that basically we’ve gone from the top-level objective key business indicator and we’ve just drilled down.

Depending on the size of the business, what you’re looking to try and create with your business, and what you’re looking to try and build, you might only have two, three and maybe a maximum of four objectives. So this really shouldn’t take you more than two hours, three hours, four hours at the very max and the great thing about this is you can keep coming back to it time and time again.