RE Agent Tactic

General Real Estate Investing
1

So, I just spoke with a RE agent last night and told him that I will not only be using him, but many other agents in the local area. As you can imagine he was confused as to why I was using so many agents when he could just as easily get me in to a property as they could. My response to this was that I don’t just want an agent to show me properties but I want to leverage off their network and neighborhood expertise. Anyone can send me an updated MLS listing, but its the properties that are not on the MLS site that I am looking for. And since they work in my target areas, they are more in the “know” than I am.

Just curious if anyone else uses this tactic and if you think this is a good idea.

Thanks

2

Hi,

We use multiple agents but none of them know the others exist.

I don’t telegraph my intentions!

                    GR
3

Instead of playing games and wasting the real Estate Agent’s, why don’t you invest the time and money in obtaining your real estate license and become an expert? Part of being a good business person is respecting other people’s time and valuing their effort. I hope the agents you are dealing with are smart enough to request that you sign an exclusive buyer’s representation agreement, and, upon you refusal to comply, send you on your way. :flush :flush :flush

4

Hi Ponganat,

Who are you refering to that is playing games and wasting real estate agents?

Did someone disrespect other peoples time and disrespect the value of their effort?

Is there a legal or ethical principle obligating a buyer to use one agent?

                 GR
5

We use two Realtors, but they’re father and son both at the same company. One of them is always available to help us. Since we’ve done so much business with them, they’ll basically do whatever they need to work around our schedule. I’m perfectly happy working with just them.

6

I don’t understand the correlation between obtaining my RE license and becoming an expert in the area. Reading the local newspaper, the town’s website (i.e. future urban development projects, the town’s annual budget, etc.), networking with locals, and businesses in the area will enable me to become as much, if not more of an expert than any RE agent.

Also, I completely respect and value every person’s time and efforts who I work with. This is why I am upfront with each RE agent. I pride myself as always doing the ethical thing, so I tell each agent that if you provide me with a lead, I will only use you to close the deal. I merely want to leverage off their networks and resources.

I hope this clarifies my intentions

7

I use 2 agents also. You want listing agents. Most agents spend their time cultivating natural sellers to get listings. A listing agent will go out and find houses to list. Most are not deals. But if a listing agent finds a deal, he can call you and get you started before the deal hits the MLS. A natural seller is a person that has outgrown their home or the kids left the house or even have a job transfer but sell a house in a fashion that is not in distress. Theses houses are almost never a deal. I made calls similar to the one you made telling several agents what I was looking for. What I found is that agents that list investor grade houses are few. I find that I usually find he house I buy. When I am in the buying mode, I call my agent and tell him make an offer sheet up and offer this amount on that house. The agent acts as little more than a clerk. He fills out the forms and makes my offers. He knows my requirements for inspection periods, days to close, etc. He has a check of mine made out for $500 that he photocopies and enters the name for each property to send in as earnest money with the offer. I don’t need real money until the offer is accepted. He tracks to see which offers get accepted and notifies me. Every house I make an offer on I will buy at that price. These agents have found they can make a lot of money off of me by just doing what I say. Every time they send me a house it is not a deal. The only house I ever bought that I should not have was presented to me by an agent. All the houses that make me money, I found myself.

I have access to sales comps and the MLS so I have no need for a license nor am I tied to an agent “wasting” his time trying to decide if a house is a deal or not.

8

Those are great points Bluemoon. What services/tactics do you use to find your deals?

9

Using Real Estate Agents can be most valueable! I have used numerous agents to bring me deals for the past 19 years. I use agents when buying as they will bring me great deals along with comps. Any ‘all cash’ deals will work fine with agents. Many agents these days will work with you on acquiring properties via Lease Purchases. With the market depressed in many areas, they would love to get you great deals for a ‘leasing fee’ rather than going without a sale.

I am still doing FSBOs and offering L/Ps and taking title ‘Subject To’ the loans. Too many opportunities to imagine right now…great deals available!!! Just a word of caution, however, you must have an exit strategy before you take on too much. It is no fun paying on empty houses. Finding buyers with ‘owner financing’ first, then negotiate a L/P or Subject to deal.

This has been a great money maker in all economies that has worked for me and all of my students who hire me to teach and coach them around the country.

Lastly, do your homework. There are many areas where the R.E. Market is not depressed. Flipping in those areas will work well and you can receive a payment from your buyer/tenant anywhere in the Continental U.S. for 44 cents! Build a team to support this and you can make a fortune, even in this most difficult economy.

Rob in Atlanta

10

Rob - Do you only use L/P’s on single family homes and in depressed communities or will this work with any property in any community? Also, what do you mean when you say you can do a flip in a striving community for 44 cents? Are you just talking about the discount that you look for? I am new to L/P’s so any info would be appreciated.

Thanks.

11

JLS944:

When you say ‘only,’ you are boxing yourself into a mold and eliminating opportunities that might become available…in other words, no, I do not do L/P’s only. If I did, I would not have been able to do 400 transactions including cash deals, private investor funded deals, subject to deals, etc.

L/P’s, however, give you the opportunity to take over a piece of property for little or no cash and control it. In this market, however, I teach my students to be cautious and line up a tenant/buyer first so that you don’t end up paying on an empty home.

I’ve have much more profitable deals with ‘subject to’ however…many of which the seller paid me money to take over their ‘bad situation.’ If you know what you are doing, you can get a paycheck from the seller, then another from the buyer as a down payment, and another when the buyer refinances or defaults.

Lastly, the 44 cents reference was postage for a 1st class piece of mail (with your rent check enclosed). So…let’s say you live in Oklahoma City and the market is depressed. You look around and find that in Tulsa (a short couple hours of driving away) they are building a new auto manufacturing plant for a billion dollars and they have numerous other big employers. The economy might be smaller there but it is stable (I’m only using Okla City and Tulsa as an arbitrary example as I have not researched those markets…just an example) due to the many large employers or large new factories. You can find lower cost deals there, buy them, rent them, manage them, and receive your checks (either direct from tenant/buyer or from a property manager) for 44 cents, to deliver those income checks to you. In other words, you can invest anywhere and receive a check…find the areas near you city if you have a depressed market and go invest (for now) where there is a viable market.

When I coach my students for R.E. Investing, it is important to know what to do as well as what not to do!! I recently saved one of my students in N.Y. from 2 terrible choices he wanted to make on deals he brought to me. I convinced him to walk away. This saved him $40k in deposits, aggrevation, and save his credit from being damaged. Keep your greed out of deals and get another opinion from someone who is well experienced. This will hedge your bets on R.E. and allow you to shorten your learning curves to make profits quicker in this crazy business.

Hope this helps.

Rob in Atlanta
Real Estate Investment Coach

12

In Houston the MLS website has a public face. In other words you can see all the houses that are on MLS. What I do is look at all the houses that are good deals, or near good deals by placing a search for a house that because of size and price is a good deal per square foot. For example I can put in a query for single family houses with 3 bedroom, 2 bath, 2 car garage over 2,000 sqft priced under $100,000. Al the houses the come up will be priced under $50 square foot. That does not mean that they are all good deals, but they are at least priced right. I then look at which agents listed these houses. Those agents are playing in my market place. Some are listing REOs some are just listing dirt cheap houses. I started off by calling those agents. Once you have bought 2 or 3 they start actually calling you with deals.

When they call you always return their calls within an hour. When they tell you what they have ether make an offer or tell them why you don’t want to make the offer. Always educate them and hone them on what your requirements are. One day (I hope) every house they bring you will be a deal.