Meeting & Working With Real Estate Investors
By Gerri Leventhal/Broker & Real Estate Agent Trainer
Consulting for Property Investors
Every Realtor knows that landing an aggressive and successful Real Estate Investor as your client is like finding the golden goose that is going to start giving you gold eggs constantly. In your case, Realtor, those gold eggs are property dealings to work on, for your new Investor Client’s behalf.
Yes, you are going to make some nice commission checks and if you keep doing an outstanding job for your client (like I know you will), there will be plenty more projects for you to advise on, in the future.
Landing one active Property Investor Client can = signing 7 or 8 of your usual clients, who are looking to buy or sell one house then you often won’t see nor hear from them again for around ten years.
Investors though, are constantly doing deals and you get another commission fee check after every transaction closes.
Why do I say that Property Investors are great, great clients?
Investors have plenty of money and bankers in tow that love to finance their ventures!
Investors are professionals so they won’t waste your time or theirs. Time is money to Investors as it is to us Realtors.
Investors know exactly what they want from their Realtor. Their dealings, projects, ideas and propositions are very clear cut, organized, orderly and well thought out. Their undertakings are for business purposes. Turning a profit is their goal, which makes them very easy to understand, communicate with and work with.
Investors are well connected. They know lots of business people, in many professions, who they can introduce you to as their genius Realtor.
Investors’ projects are often very visible, many times they are even, news worthy. Your popularity and street cred goes way up in your community when you are known as the Realtor who worked on (for example) the big development project to renovate the dilapidated warehouse district. People who visit that successful undertaking will be talking about it and shouting your praise for many, many years. Just by being associated with a prominent property developer a Realtor’s popularity grows and grows.
Investors do not haggle nor squabble over a half of percentage point when negotiating paying your commission rate. They know the game. Your Realtor’s fee is already figured into their business formula.
Investor clients are FUN and EXCITING to work for! Investors are the folks that make things happen. It is challenging work for sure but there is rarely a dull moment and you will have loads of entertaining, funny and inspiring stories to tell.
You will learn a lot and gain tons of valuable experience by working under the fast paced conditions and being involved in the time sensitive situations that Property Investors often find themselves in. Real Estate Investors are go-getters. They solve problems that others would never try to take on. There is no better real estate education for a Realtor than working with a serious minded, ambitious Property Investor.
Once you have earned an investor’s trust and confidence, you no longer have to wait for them to contact you with additional work. You can start bringing the deals to them for consideration.
So how do you convince these investors that you are the Local Realtor for them?
If you can make a Real Estate Investor’s life easier, save them money or make them money, they will hire you…PERIOD!
If you can speed their projects along, clear some roadblocks, they will happily add you to their team.
If you can convince an investor not to get involved when a deal looks to be more trouble than it is worth, they will be appreciative.
You have to get inside the head of the particular investor you wish to consult for. Walk in their shoes. But know that every investor is somewhat unique. They each have developed their own business methods, strategies and theories that work for them, due to their individual strengths, weaknesses, likes, available resources, their personalities and their personal business styles.
Your task is to figure out what each investor needs help with. How can you be of service? How can you make their particular projects more successful?
Let’s look at the most usual types of property investors:
Find a Bargain then Fix then Flip Investors – House flippers are property rehab experts. They are great at repairing, reconditioning, re-building, remodeling, reconstruction and achieving makeovers of properties inexpensively. Flippers are usually very hands on, do-it-themselves people because they want to save money but they also know lots of various kinds of contractors and pros who give them discounts due to the large amount of steady work they supply them with.
Buy and Hold Real Estate Investors – The Buy and Hold Method of Investing in Property is more than just buying Real Estate and then waiting for it to go up in value and price, as the name would suggest. The strategy is for the Buy and Hold Investor to also rent or lease the property out too, so they are generating income while they wait for the market prices to go up, up, up over the long haul of many years. Can you see how the Buy and Hold Investor stands to make money both in the short term, from collecting rent payments plus also gain in the long term as the property appreciates and rises in value a little bit each year? Years later, after collecting lots of rent money, the mortgage will be paid off and now the owner can sell the property at a much higher price than they bought it.
Investors that purchase Single Family Homes to lease out – Large families may need a lot more rooms and space than an average apartment or condo can provide. Thus, many Investors like to specialize in purchasing whole houses with front and back yards to rent out to nice families. Buying a Single Family House to lease out is a great way for first time Property Investors to get their feet wet when they are just starting out to learn about property investing. Dealing with just one renter is a lot easier than jumping right into having to handle multiple tenants in a multi-unit complex.
The tenants that rent a whole house are usually a higher class tenant making a larger salary than the typical apartment renter so investor/landlords usually have fewer problems and can count on their rent being paid on time. Utility bills can be set up for the tenants to pay the suppliers directly, which means fewer headaches and less work for the Investor/landlord to worry about. Once an investor masters the art of the single house investment model, they will often stick with it, continuing to add one house at a time to their portfolio over many years. Don’t you want to be their Realtor, finding them their next houses and closing all those deals?
Landlords who specialize in Owning and Managing Apartment Buildings – Find an investor a property with a lot of units and you get yourself a bunch of ongoing business. Yes, you make the commission on the original purchase of an apartment complex but you can also get a piece of the action of finding good tenants for all of those apartment units. Years after the original sale you could still be collecting a fee now and again for renting an available vacant unit.
Property Wholesalers – These pros work within an often tricky but lucrative business model. Wholesaling Real Estate relies on completing a high volume of very time sensitive endeavors and thus these are quite high pressure ventures. Wholesalers locate desirable properties usually below average market prices then sign a contract to purchase them. The thing is the wholesaler’s real goal is to find other buyers, hopefully, before their original closing date, who are willing to pay a slightly higher price. The wholesaler will then transfer their interest in the properties that they have secured under contract, to their new buyers for a small fee or a modest profit. Wholesalers typically need to transfer their interest in lots and lots of property deals over a year’s time, to many 3rd party buyers which is why they often work with house flippers. Luckily for wholesalers, there are plenty of craftsmen and craftswomen, as well as many house flippers, who enjoy the fixing up and repurposing aspects of house flipping much more than they like searching to find the properties they work on. Wholesaling being such a high volume business, it is easy to see how working with just one or two Property Wholesalers can keep a Realtor very, very busy.
Commercial Property Investors – Many industrialists develop properties that are suited for businesses to use, such as, retail spaces for stores, office buildings or the facilities for restaurants, bars, hotels and clubs to operate out of. Some lease out the properties in their portfolios to companies, others build or remodel business properties to sell them for a gain.
Commercial Realty includes just about any property that is bought to make its owner money, for examples; a shopping mall, a gas station, a used car lot or a funeral home. An apartment building must have at least five rentable units in order to be considered Commercial Realty. Yes, Self-Storage facilities are considered Commercial Real Estate, so are mobile home parks and even cemeteries.
Due to the technology spurring recent trends such as more employees wanting to work from home, less office buildings are necessary in society than in the past. Lots of shops too have been closing due to the popularity of online shopping with delivery service. These once thriving, filled office structures and store fronts now sit empty as eye soars, along our highways and are cluttering up our inner cities as well as our suburban downtowns. They have to be repurposed and a wise Local Realtor is there to smooth the way with politicians, the zoning board, building inspectors, the public and the media.
These sitting idle commercial properties can often be had at inexpensive prices but you have to have a great plan to turn them profitable again because lenders are not approving loans for these properties, since there are so many of them sitting vacant.
So you see that there are lots of different kinds of Real Estate Investors, most specializing in specific kinds of investment property. There are surely many ways to profit from and monetize different kinds of real estate.
Sometimes what can be done with a property has very much to do with where it is located. A place does not need someone to create a property type that there is no necessity for in that neighborhood.
You, being a Realtor, will have to do your research on the investors for whom you wish to consult. You need to learn things about the clients you wish to help or how can you assist them?
Some info you need to find out includes:
How experienced are they with Real Estate Investing? You are going to treat novice, beginners very differently from seasoned pros. You have to hold the hand of new investors, teaching and encouraging them thru every step. Accomplished investors will tell you exactly what they need you to do for them.
What properties are in their portfolio already and how long have they owned each? Are they happy with the performance of each of the properties that they currently own? Also important to know is how successful were they with each deal from its onset and did they run into any specific problems in the past? Knowing an Investor’s history gives you clues as to how their investing has been progressing over the years. Are they getting better at investing and learning by each new experience? Are they taking on more ambitious projects with each purchase? Are they being more cautious? You need to learn what makes each of your clients tick to know what they are ready to take on next.
How are their finances? The amount of money they have to invest with, will ultimately determine the price range of the properties that they can think about acquiring. There is no value in bringing an Investor a deal that is way out of their league or that they are not ready or capable of tackling yet.
What are the locations, neighborhoods and communities where they are interested in investing in? How open are they to exploring opportunities in other locations?
How anxious are they to find and start their next property investment project?
Are there any kinds of property types that turn them off, that they simple do not want to have any part in owning or managing and why?
Would they next, rather invest in a few smaller less expensive properties projects or would just one, much bigger, high price ticket property venture be better?
Yes, research is more work. The good news is that most of your competitor realtors will not take the additional time nor want to make that extra the effort to learn about the individual tactics and quirks of each investor working in or nearby your consulting territory.
By learning more about the investors, whom you are trying to impress, you will have an advantage over your competition when it comes to approaching these valued and coveted, sometimes high profile, Investing Clients.
The more you know about a potential new client, the easier it is for you to speak their language and thus make a connection with them.
Land a few Property Investing Clients and not only will your life as a Real Estate Agent get a whole lot simpler but you’ll be steadily successful and wealthy for years to come.
TIP: Sometimes you have to offer a little FREE advice to highlight your worth before a client will hire you.
As always, I recommend that you choose one property investing type of client to specialize in helping. Considering there are currently about 7 million folks calling themselves Real Estate Investors, who are actively involved in investing, you should have no problem finding plenty of potential clients in your preferred, chosen, investor client niche category.
Now, once you know who you wish to consult for, you need to do everything that you can to become an expert in your selected property investment niche.
Start signing Investing Clients and I assure you that you will be the envy of all the other Real Estate Agents in your firm and consulting territory.
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