I’m a worried Dad. My beautiful little girls are growing up too fast. They’ll be dating soon and I pray they make wise choices. I certainly don’t want them hanging around the wrong crowd. So rather than leave this up to chance or divine intervention I decided to start establishing some criteria for them. Their friends (the male kind) must be able to produce the following before a courtship can begin:
- A W-2
- A business plan
- Profit and loss statement
- Balance sheet
You may be saying to yourself, how many teenage boys can produce this kind of stuff? Very few right? Exactly! With this criteria in place only the best and brightest will show up at my door on prom night. My girls will quickly weed out the unmotivated, lazy slackers that have no idea what they want in life.
As a fix and flip real estate investor, I’ve discovered that setting high standards is also important when entering into a relationship with a Realtor.
Now this may come as a surprise but I am a Realtor. I chose to get licensed in 2007 because I wanted access to the Arizona Regional Multiple Listing Service (ARMLS). But just because I’m a Realtor doesn’t mean I want to practice real estate. I’d rather pour hot coffee in my lap than deal directly with a retail buyer or seller.
Realtors have their strengths and weaknesses. Some work well with buyers, others with sellers. Some have multiple years of experience, others are just getting started. None of this matters to me. Here’s what I really want from my Realtor:
- A great deal I couldn’t find on my own.
- An honest, thorough assessment of the property’s value.
- A ballpark figure for repairs and maintenance.
- Prompt offer preparation and submission to the seller.
- Proficiency with technology (zipForm, DocuSign, email).
These things are what make my Realtor, J.D. Manning so valuable. He scours the MLS almost every day for bargains. When he finds one I get an email with the property listing and recently closed comparables. This email also contains his estimate of repairs. If I agree with the valuation he prepares the contract in zipForm (real estate forms software) and sends it to me in DocuSign (electronic signature software).
J.D. and I just closed an REO deal he found on the multiple listing service for me last month. I bought it on July 6th, had it under contract by July 25th and sold it August 23rd. I net $16,300 in profit. That makes J.D. a real estate investor’s Realtor.
Whether you’re looking for a contractor, attorney, accountant, Realtor, or love, it’s important to have minimum criteria in place.
And if you have a son that will be dating age in the next 7-10 years – he better start getting his financials together now. A Dad like me will be reviewing them.
{ 16 comments… read them below or add one }
Using a Realtor on a fix and flip property they found for me. Looking to close the deal using “subject to”.
As such, what is the best way to compensate the Realtor for their involvement?
Donno, if you’re going to flip the house then why not use the Realtor to list the property for you when it’s ready to sell? That’s how I do it. If a Realtor finds a deal for me then I give them the listing. It’s a win-win.
I totally agree that a good vetting system needs to be applied to weed out all the bad kids that go creeping around our daughters! I personally have taken a more generic view. i.e. make sure the he has good predicted grades at school and that he dresses well, but I think its so important for kids to be thinking about their finances from an early age. The credit card boom is over, thank the lord!
Hey Chris,
I think the point of the analogy was having high expectations and applying that to your business as a realtor. Did you read the entire article?
You are right Drew. But Chris gave me some good ideas I can use in a few years when my daughters start dating. The more criteria the better!
Good advice Chris. I’ll add that to my criteria.
Your best article yet Marty!! lol
Good article. And J. D., it’s great that you can give an estimate of fix-up costs. This is hard to do, or at least hard for me to do.
Nancy, I didn’t mention that J.D. has been working with investors like me for quite a while. It comes with experience. He just emailed me about my repair costs for this house. It helps him with doing estimates in the future.
I would expect you to say that J.D.!
Great words of wisdom for anyone looking for a long term relationship.
Thanks for the very good article Marty! You are helping to educate investors. As an investor and Realtor/Broker I work my tail off for buyers. As commissions are low I don’t want to work with buyers that waste my time.
Richard, it’s always a good practice to work with the serious, not curious. Ask a potential client these three questions BEFORE you start working together:
1. What kind of ROI are you looking for?
2. How much money do you have to invest?
3. How long can you invest that money for?
If the client can’t answer these three questions quickly then refer them to a Realtor you don’t like.
Excellent points here.
Great article! I am a full time real estate investor now, but I had a home inspecton business for 17 years. I always had a great working relationship with Realtors. They should be part of any real estate invstors team.
Sharon, a good Realtor will make you money. Find a good one and get after it!