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The Second Step in Buying a Rental Property: Should I Be An Agent or Simply Work With One?

by Dawn Anastasi on May 24, 2014 · 3 comments

  
Should Investors Be Agents

This is a follow up to Brandon Turner’s blog article on 8 steps to buying a rental property. The second step that Brandon mentioned is to get in touch with a real estate agent.

If you’re a new real estate investor, you probably don’t have much experience with working with a real estate agent. And after reading the forums, there are tons of questions that new investors have about real estate agents.

The #1 question I see being asked:

If I Want To Become A Real Estate Investor, Should I Get A License?

There are lots of posts on this topic and quite a few blog articles as well. Those who have gotten their license almost always say YES, definitely get your license.

Why?

Several reasons:

a) You have direct access to the MLS and don’t have to wait for someone else to be able to let you into properties you want to see.

b) You can write your own offers, and if you want to write 100 offers in one day and make a ton of crazy lowball offers to see what gets accepted, you can do that and you’re not tying up someone else’s time.

Related: Buying and Selling Tips in a Multiple Offer Situation

c) If you find someone who wants to sell their house, you can help them and get some commission money.

J Scott actually wrote a great blog article on why real estate investors should get their real estate license, which covers the above points and a lot more. Now even though J made some really compelling arguments, is getting your license necessary? NO.

As a buy and hold investor myself, I do not hold a real estate license. And yet, I’ve purchased 11 rental properties. The key is to find a real estate agent who is comfortable working with investors.

Ben Leybovich (the king of counter arguments) wrote a blog article that made the case that in some situations, getting a real estate agent is not really necessary or desired. Two such examples: if you market for off-MLS properties, or if you only do one deal a year.

So to answer this question, you have to look at your own personal situation.

How Do I Find An Investor-Friendly Real Estate Agent?

Related: How to Find an Investor Friendly Realtor

When you’re new, more than likely you’re going to have to look at a lot more houses than someone who is more experienced, for several reasons:

a) To get a good sense of the market; to determine what type of properties are available in the area in which you want to invest.

b) To get estimates for how much rehab work properties will take in order to get rent-ready.

c) So when you see a house listed for $50,000, you’ll know if it’s a deal or a dud.

Some real estate agents might not like working with new investors because they have to put in a lot more work showing properties than someone who knows exactly what they want.

Rather than take a shot in the dark with a random Google search, one of the best ways to find a good investor-friendly real estate agent is through a referral.

How do you get a referral?

Ask around to other, more experienced real estate investors. You can meet other investors at a local REIA (Real Estate Investor Association) or other networking events (such as local meet ups happening around the country coordinated through the Bigger Pockets forums), or even by sending a private message to someone local you connect with through the Bigger Pockets meet page.

You will even find realtors who read this site and are active investors themselves.

If, through your contacts with real estate agents, you find those who don’t want to work with investors, and only retail buyers, you may want to give them a copy of Brandon Turner’s guide “The Real Estate Agent’s Ultimate Guide to Working with Investors“. They may change their mind and thank you for it one day.

Should I Work With Multiple Agents?

Some people say yes, some people say no. (A real estate agent who wants your business would generally say no.)

Well, when should I leave an agent I’m currently working with for another one?

Ah, this is a tough one. Generally, when someone develops a business relationship with someone, as long as it isn’t horrible, we tend to keep working with that person. But if the agent isn’t returning your calls, or can’t answer questions about properties you want to look at, or gives you the wrong answers, or you just generally have a personality clash with that person, then it may be time to find another agent to work with.

Hopefully, if you are new, this covered a lot of the questions you might have had about finding a real estate agent to work with.

Do you have your own tips for new investors working with a real estate agent for the first time? 

Share them below!

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{ 3 comments… read them below or add one }

Mark Ferguson May 24, 2014 at 11:12 pm

Nice Dawn, I have been slacking I didn’t realize you stared writing for BP until now! Congrats.
I am a huge proponent of getting a license for anyone that wants to do a lot of deals. It is also a great way to make money as a career.

As far as the working with multiple agents question, I think it can be done, but mostly with experienced investors who find their own deals. Agents don’t want to work with buyers who use multiple agents and they won’t send deals to them.

Reply

Eric May 26, 2014 at 1:57 pm

When i bought properties, I generally had the property and just used an agent to handle the PA. I always got 25% of the buyers side of the commission. It saves a bit.

Reply

Shaun May 27, 2014 at 2:07 pm

I think when figuring out if you are going to work with multiple agents you have to think about what you goals are and how you will be using the agent(s).

If you are looking in a particular smallish area and will be asking the agent to send you listings and comps for them, then bring you to the places and write up a bunch of offers for you I would look to solidify a relationship with one agent (as long as they perform up to your expectations, but if you not drop them don’t just start working with another one as well).

If you are looking over a very broad area and are just looking for strong leads and won’t ask the agent to do much other than send you a good lead which you will then try to buy through them let a bunch look at things for you. You might not be able to call them up to do an analysis for you on short notice or something, but you basically are doing the agent equivalent of getting on a wholesalers buying list.

I actually have a license myself but do the 2nd approach now with other agents. Basically if they bring me a deal I like and didn’t see myself then they can be my buyer agent and if it is a flip they get the listing. Since I have MLS access I can comp with myself and I just ask for their opinion to see if we are on the same page. If they want to see it together we do, if we can’t work around each others schedule I make my own appointment. This all going to show that I don’t make them do much work, they just find the lead and do the paperwork.

Reply

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