Hello everyone. I haven’t posted here in a while and would like your opinion. When approaching a realtor do you feel that telling them that you are a wholesaler and what your strategy is helps or hurts if your trying to find a good realtor to work with on an ongoing basis? If you have successfully disclosed your strategy how did you do so?
How about first screening 6, 8 or 10 or more realtors to see if they work with investors? How long they have worked with investors? How much investor strategy they understand?
I don’t have anything against a realtor learning to support an investor, even throwing them a bone every once in a while, but I want disclosure from the realtor so I increase my chances of success!
Before you include one on your team and as a course of business disclose if necessary your strategy!
It’s better for the realtor to find out NOW what you intentions are, then go blindly and find out later that the deal could blow up in your face.
I am a Realtor who works and has only ever worked with investors. Definitely tell the Realtor up front what you are looking for so they can be sure they can provide what you are looking for. My recommendation is finding an agent with more experience listing properties vs. working with buyers…I feel they have better negotiation skills.
If a realtor is truly experienced or gaining experience working with investors they should be studying the same web sites and forums and attending the same educational experiences as the investor, they should seek education to understand:
- The benefits of investing in real estate and the techniques vital to success!
- The in’s and out’s of property management, proper CAM procedures, risk management, reducing liability and producing cash flow!
- How to structure purchases for best position (Equity to Debt ratio) and how to increase and maximize cash flow!
- How remodeling and Rehabing work and how to work within your clients best interests!
- Creative financing, financing alternatives, no money down, and structuring financing!
- How to structure transactions for best tax benefits and protection of assets!
- Wholesaling and assigning / A-B-C Transactional funding and structure for flipping property!
- Mortgages, creating mortgages, selling and discounting notes, alternative funding solutions, and structuring debt agreements!
- Foreclosure training, short sales, creating hardship packages, BPO’s vs Appraised value vs Comps, structure and reading markets!
- Recreational Vehicle Parks, Manufactured Homes, planning, cost estimating, and creating cost effective projects!
- Lease’s and Options, sandwich lease’s, Option’s, Master Lease’s, strategies and financing, state specific laws!
- Tax Deed Sales, Tax Certificate Sales and Hybrid sales, due diligience, contracts and legal obligations!
- Multi - Residential property, Cap Rates, financing, due diligience, forensic examination, market analysis and projected financials!
- Commercial Property, market analysis, cap rates, market rate’s, Net and Tripple Net, build out’s, financing and contracts!
- Industrial and Manufacturing, Environmental Compliance, risk analysis, mitigating regulatory and permiting standards!
- Passive investing, structure, using self directed IRA’s, contractual obligations, calculating risk / reward!
- Land development, environmental compliance, regulatory and application compliance, zoning, planning, variences & entitlements!
- Real Estate development, set backs, off sets, fire / life / safety compliance, site utilities, on site / off site, market analysis!
- Condo’s, Townhouses and Patio Homes, HOA’s, conversions, pre sales, rental compliance, comp’s and market analysis!
These area’s of real estate investing should be being learned by any agent who wants to be a good realtor able to serve investors and understand what an investor seeks to achieve and the methods to get there!
Anyone can list property, but can and will an agent actually market the property, actually work to drive traffic, utilize creative methods to get traffic leading to written offers, hold open houses, solicite feed back and change strategy according to feedback, and generally do what it takes to get a property sold quickly, and for the best price possible???
I find most realtors lazy, unmotivated, un-educated and unknowledgable at anything other than showing property and writing contracts, most don’t really want to work, or are working the very minimum to get by, and have no desire to seek additional education for real estate investing!!!
I don’t know how any realtor can really achieve top negotiating skills without years and years of experience as every agent recieves the same 40 hours of classroom instruction prior to testing for their state license and it takes years and years and years to become a good negotiator!
AS a Realtor and an investor for over 28 years, I see that it is most of the time the investor that is not eduacated. Your right about many agents being lazy, but mnay more work for FREE till a deal is closed. Not too many people work as long and hard as we do, and sometimes not get paid anything for the work we do. Our job is to educate you, to be the best investor you can be.
Help you to find the right properties for you, at the best price, and help you make the best deal for you. For us to do our JOB, you have to give us the information we need to best help you. Many of my investors never see the homes they buy, I am their eyes and ears, so I look at a property like I am the one buying it.
Interesting post Linda. I haven’t had much experience with realtors yet, but fom what I have seen, your sentiments about being an investor advocate are pretty rare among agents.
to me, it’s similar to the healthcare profession where the people who are supposed to keep you well are only rewarded (paid) when you get sick. It would seem that it is difficult to not be swayed by money.
Not necessarily a bad thing, I don’t want anyone’s family to starve. Just saying that I can see how working with investors isn’t really in the best interest of the agent. It’s akin to the physician trying to find a cure for a disease. Once it’s cured, he has cut his earning potential to a fraction of what it could have been. Obviously, as investors, our goal is to get the lowest possible price.
Am I completely off base here?
On a recent post somewhere else I mentioned the point about coming across with the other business people I deal with (lawyers, inspectors, mortgage brokers etc) as a fellow business person who can bring business their way. This is the way I approach realtors too. When I first interview them, I cut to the chase immediately after pleasantries by telling them that I don’t buy from the MLS, so we get that out of the way right now. BUT I tell them I do a lot of my own marketing, to which some of those leads are listing type material. In fact nowadays, I have it down to where I gear my marketing volume such that I know I’m doing enough marketing if I can throw 1 to 4 warm solid leads every month to the agent. I tell them I don’t want anything in return, except for comps when I email that request for one. Here’s the point of what I’m saying. You have to figure out a way with EVERYONE you deal with in this business how to spin things in such a way that benefits everyone. Win-win-win. Now if I pass 4 leads this month to an agent, they list, of course they make their money on the sale. They simply called up my warm lead to them, listed the property. I get nothing, nor do I want nothing from them financially. Agents love working with me as a result. Very seldom is there a situation where I get one of those agents to list a house I have that I’m selling. It sucks into my profits too much. Those times I list usually happens if the home I’m selling is slightly outside of my area, and I don’t have time to sell it. Just a quick note about agents who work hard or who don’t, given the way I spin it, I only work with top notch people. So agents have to prove their worth to ever get a chance to work with me. So it’s like a real job interview where they tell me why I should hire them (or work with them) over the other guy, then prove it over time.
Thanks for the reply Chunk. I definitely agree with trying to make it win-win-win.
I do have to ask though, out of curiosity, why would people who are willing to list themselves, going to even want to list with an agent? Or, ar eyou talking about your marketing generating leads by people who saw your ad but haven’t decided whether or not to list yet?
To dwilliams, yes, if you are going to use an agent, we need to know your investing strategy. When you go to a doctor and when they ask “what’s ailing you?” do you say, “Guess!” Doesn’t work too well.
Rogalio, the reason there is a strong love-hate relationship among investor/agents is that a) neither side takes the time to learn how or why the other party could benefit and b) we usually see the worst sides of each other
Example: As an agent, I frequently get only two kinds of new potential investor clients: 1) the new investor that knows next to nothing but expects me to educate them for free (not to mention waste a lot of valuable time on poor deals) or 2) the experienced investor (like chunkoftheearth there) that expects to me to do a sing and dance routine in order to be allowed to grovel at his feet (no offense, chunk). As you can probably see, neither paints a good picture of investors.
On the flip side: as an investor, it took me months of looking to find an agent that a) wanted to work with investors and b) either understood enough about investing to be useful or was willing to learn about it. So, from this perspective, most investors feel that agents are idiots because they “don’t understand” investors.
As to the agent getting paid, yeah, I think you’re totally offbase (but then again, I’m not your average agent). Using your analogy of a doctor (agent) treating a sick person (the investment property), yes, we only get the opportunity to be paid when you want to buy. BUT, once you’re sick have visited the doctor, try to only pay him AFTER you get better!
When I work with investors, once we know what type of investment strategy they have, we can determine what type of services they need from me AND we develop a payment plan that fits those services. That could be anything from commission upon closing, a flat-fee, hourly based OR a mix.
Rogelio, EVERYONE is swayed by money. That’s exactly why you’re an investor, right?