Realtor Help

Rehabbing, Fix and Flip, Rental Properties
1

Hi all,
How do I make long story short here??? Okay, the central issue is that I’m going through Realtors like you-know-what through a goose. With all due respect to DeeIn Austin and any other Realtors here, the only reasons I really need one is their MLS access, and physical access to REO and HUD homes. I don’t rely on them to run the deal numbers or anything else, etc…

It seems that despite claims to the contrary, the 4 realtors in my recent past seemingly do not grasp the concept of buying at wholesale in order to rehab. Won’t bore y’all w/ some of the other “shortcomings” I’ve experienced…

Can anyone suggest a means to better screen, assess and successfully engage a competent Realtor? A questionnaire perhaps?

Thanks in advance for any suggestions,
David

2

You don’t really mention what the problem was, but I think it’s probably the same problem everyone else has. The property you’re currently looking for probably doesn’t exist yet. Even a regular buyer will have some specific requirement that usually can’t be met. Several of my clients love new construction, however in this area over 70% of the housing stock was built prior to 1970.

We would all love to find the perfect properties for our clients, sometimes they just don’t exist.

What specifically was the problem with your past Realtors? I’ve shown REO and Hud homes to clients. Usually when they see the condition they’re in, they run away very quickly. A few times we didn’t even get out of the car to look at it. If they’re in MLS, I’ll show it.

If your problem is the fact that you’re trying to lowball in order to get that wholesale price, the Realtors you may have been working with probably felt you were wasting their time. Remember Realtors do this to make a living and to take care of their family. Their experience has told them that it’s worthwhile to work with certain types of clients and other types of clients need to be fired because they will NOT earn them a commission, they will just waste the Realtors time trying to get the deal of the century.

3

Henryinma,

Thanks for the reply…The basic problem is that while the Realtors have claimed to understand rehab/flipping and to have worked with investors, apparently the types of investors they have in mind are what they call “California investors.” These folks apparently buy houses sight unseen - hard as that is to believe - but it sure makes a Realtor’s life fairly easy, I presume!!

In each of the 4 cases, I’ve told the Realtor the same thing at the very beginning, such as:
I am a new RE investor intending to rehab/flip houses;
I have to buy at a deep discount in order to make a profit on the back end and the houses I’m seeking are going to be ugly (they all said "I know!);
I will not rush into any deal and won’t do a deal just to do a deal;
I need them for leads and to provide comps and their estimates of a resale price. Promising houses will then be seen in person;
If it takes looking at 15-20 houses before finding one whose deal numbers work then that’s what I’ll do;
I do not expect them to drive all over creation with me, as I will give specific MLS search parameters and criteria;
I will use them on the sell-side as well;
I will show proof of funds on the spot if they desire.
And last but not least, if you don’t like anything I’ve said, then tell me now and no harm, no foul.

Oddly, no one ever had a problem, at least that they admitted. But the subsequent service, well, I felt as though I was teaching them what kind of houses to look for, what MLS keywords to use, couldn’t get calls returned, etc…

I fully appreciate they’re trying to make a living…but if they thought about it, they have an opportunity to make a commission on both sides of the transaction annnnnd, I’d be a repeat client. The first few deals may be slower to fruition, but unless they’re going to have their own skin in the game - which they’re not - then I decide what deal works and when.

I’m just a bit frustrated because I feel that I gave full disclosure up-front as to who/what I am (new to rehab/flipping), what I expected, and when asked if they wanted to pass on working with me, no one availed themselves of the chance to bail out before signing on. Frankly, I suspect that these 4 so far have been either lazy or just dabbling as a Realtor (such as a mommy doing it part-time - when she wants to mess with it or when Junior isn’t sick).

If anyone has an idea as to how to find/screen/assess competent, professional Realtors, please enlighten me!!

Thanks,
David

4

Hey David…

My wife and I own our business together and I have worked with a few different realtors with minimal success. The thing I tried to do was get realtors to understand investing. Most understand how to be a realtor, not an investor. We decided that it would be beneficial for us for my wife to get her license and act as our realtor and that’s it. She found a firm that will hold her license for a cut of the commission when we buy, no floor time, and they take no commission when we sell one of our houses. Sweet deal. MLS access, an education on the real estate agent side of things, and knowledge of real estate laws, some tricks of the trade, all kinds of things. So basically she is a real estate investor with her realtors license. Why not get your license and cut out the middle man or woman???

:beer Jared

5

It’s funny how people always claim that Realtor’s don’t know how to be investors.

Many people don’t even realize that a Realtor is actually a member of the National Association of Realtors. States issues real estate agent and broker licenses. Once people have their license, they can then just pay a fee and be a Realtor. You just have to attend this half day class which is about ethics once you join. There’s really nothing specific about investing, just basic things like cap rates and methods of determining the value of a property.

So what were these Realtors missing about investing?

To answer your previous question about why 4 Realtors passed on you, my experience has been that someone with good motivation is the best client. Your profile of a buyer who needs the right deal to come along just isn’t a motivated buyer and could just end up being a tire kicker. I tend to prioritize my time such that I spend it on the most motivated people first as those are the ones who will buy. I’ve got a few investors that I’ve been working with off an on, but in my market, there aren’t a lot of great investment deals so they just tend to keep looking.

Because you’re not motivated you’re going to have to do the work to find the properties that you want to look at. Occasionally I’ll see some interesting deal, but because they’re so rare, they don’t tend to last long and are usually gone after a couple of days. I remember one time I was going to see something on a Wednesday, but it was raining that day so I figured I’d wait til Saturday. It was gone by Friday and it only came out on a Tuesday.

Oh and the reason I became a Realtor was so I could spot some of those deals. Some of those Realtors you may be working with may just keep those great listings they see for themselves making you think Realtors don’t understand investing, but they’re the very ones snapping up the deals you’re looking for.

6

Excellent…I get “all due respect”.

DCS, I found that the best way to find an agent who understands wholesaling is to network among investors. Get a referral from a good wholesaler that you respect. You may even find that they have a license. You may want to read some books like Millionaire Investor or Flip. Flip is excellent. I rarely recommend books, but I’ve been recommending it to new and experienced flippers so I don’t have to teach them so much.

Both books tell you that you need an agent to do more than use MLS for comps. Even if an agent gave you access to comps, if they don’t understand wholesaling, the comps can possibly be off. They need to provide more value than that. Check with your local investment club or you may come across true investor agents who are selling a rehabbed house on MLS.

It will take some time and it’s not easy. Most of my investors went through about 4 agents before they found me. I went through about 4 before I got my license. :biggrin

7

With no disrespect to our attending realtor (and present company excluded), I come into contact (in the capacity of a lender) with a large number of realtors that don’t get real estate from a investment perspective.

Your definition of “motivation” is more akin with a residential transaction (find me a home/shelter) and not “find me a profit center”.

To put a real estate investor’s motivation in a different perspective; what other clients do realtors come into contact come with a proof of funds and the ability to purchase/finance multiple properties at once (as is the case with hard money).

This lack of education is so prevalent where I am from (I’m from MA too; central), that I’m contemplating getting my license and branding myself as the areas first and only “investment realtor”.

Regards,

Scott Miller

8

My thanks to all who replied to my latest post!! :slight_smile:

Henryinma - believe it or not it’s crossed my mind that the good deals might actually be being snapped up by the Realtors themselves!! As far as motivation goes…I am indeed motivated - to find a good deal - and I’ve tried to communicate that to them, but have evidently failed miserably. I’ve gone so far as to reiterate to them that I am doing this full-time and intend to make my living doing it…if that’s not a basis for motivation, dunno what is!

DeeinAustin - Hey, you’re only 80 miles up 35 from me!! You could sure be of assistance Dee - I’ve gone through the 4 agents!! :wink: I agree w/ you on FLIP - it’s the only book I thought was so good that I wrote a review on Amazon.com!! (Incidentally, I asked the latest Realtor if she would please read just one section of FLIP, so that she and I were on the same proverbial page…and that went over like a lead balloon. I figured at that point that either she knew it all or wasn’t really interested in learning more in an area where she supposedly did business.)

Jared and EZLoanz - my own license wouldn’t be a bad move, I agree. It’s just finding a broker willing to sponsor/hold my license under the conditions Jared refers to might be as problematic as finding a good agent in the first place!?

Jared hit on a point that is quite possibly the root of the issue…It seems that despite my “disclosure speech” I’d given to each Realtor and despite their representation they understood wholesale buying, the reality is/was that they’re “retail” Realtors, experienced in homes bought/sold by owner-occs. Similarly, I was a commercial banker and I didn’t and don’t know squat about consumer lending - nor did I ever care to learn.

Again, thanks to all who’ve replied!! Y’all have a great weekend! :slight_smile:

David

9

To be fair, the most agents don’t want to invest. According to industry research, the “average/typical” agent demographics is a 50+ age caucasian woman who is not internet-savvy. When companies are making products and software for agents, they target it to this person.

We have to remember that investing is a niche, so less than 10% of the industry will cater to it. Most agents like selling luxury homes and representing buyers because it matches their lifestyle and personality. Agents are typically great salespeople who like to talk to “everyone” and have outgoing personalities.

From what I’ve seen of investor agents, here are the differences:

  1. We probably started as investors and/or currently invest.
  2. We have backgrounds in business and/or analysis. The ones I’ve met worked at corporations or started their own businesses. They seem to think “out of the box”.
  3. We don’t like your typical home sale because it’s boring. We like challenges and putting deals together.

This is a rare person who has specialized knowledge, so it will just take time to find the right folks. Unfortunately, we can’t just get our licenses and take the “investor education track”. We have to seek the knowledge, network among investors, and gain experience.

10

What DeeinAustin said is right on target. Most real estate agents don’t believe in real estate. They are not bad, they are just realists. If you think about it, what they see 10 times out of 10 are an investor coming to them saying "I just lost my shirt on this investment house and if you don’t get it sold for me in a week my kids are going to starve” They never see the guy that is going to sell a successful investment for a big profit. I always say that you can’t learn from others (or your own) mistakes because if you see 1000 mistakes you know 1000 ways to not do something and still don’t know how to do it. What you need to find is an agent that knows how to do it. That person has seen it done right. Those guys you will find hanging around your local real estate investor’s club meetings.

11

If its any consulation (no fee :smile)I spent 5 years and countless hours rumaging through realtors I got so fed up I got my license and do it myself.Like they say. If you cant beat them … join them, and save yourself 3% of your profit.I only ask myself,WHAT TOOK ME SO LONG? BUT, I am a patient man.