Is This Real Estate Investor Crazy? My Thoughts…

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I was cruising the forums here at BiggerPockets (which by the way, you should be doing! Lots of great discussions occurring!), and I stumbled on a discussion titled Realtor Thinks I’m Crazy. As a licensed Realtor myself, it caught my eye so I opened up the discussion to read. This was the investors original comment:

Real Estate Talking Points

The above brings up all sorts of good talking points. Each of the below talking points could easily an entire article in and of itself, but I’ll just touch on what I feel are the main components of each.

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Real Estate Agents Are Key Members of Your Real Estate Investment Team

It sounds like one of two things is going on with this Realtor.

  1. They are an absolute Saint. Working with someone for 6 months, making multiple offers, and getting none of them accepted. They must have the gift of patience.
  2. They are not a very good Realtor. Maybe the only reason the Realtor is deciding to continue to work with this person is because they can’t find other work? If that’s the case, then it would seem this person can find a better Realtor for their team.

What should you take away from this?

  • Educate. You should explain to your Realtor exactly what you are looking to do, and be upfront about it. If they think you are just a normal retail buyer, they are going to have very different expectations than if they know you are an investor. If you are getting funny looks from your Realtor, it’s probably because they don’t understand ‘what’ you are trying to do.
  • Network. Network. Network. If you’re looking for a “good Realtor”, it’s all about putting on your hunting gear and finding them. There is no magic formula for doing this other than to get out there and start talking to people.
  • Trade Shoes. Put yourself in their shoes and take a look at things from their perspective. How would you feel if you were them? If you are getting funny looks, it’s more then likely because you have not clearly set expectations.
  • It’s Not Easy. A real estate agent’s time is just as precious as yours. Finding one who understands and is willing to spend the time looking to do what you want to accomplish as an investor will be rough. “Yes, I want to wholesale. Meaning, I want you to write up offers on multiple properties that will more than likely not get accepted. Did I mention, you will be filling out this multiple page purchase agreement form multiple times per week?” How does that sales pitch sound if you trade shoes and are the agent being pitched it?

Solution – consider getting your real estate license. I can check out houses all I want, and make all the offers I want. The only funny look I will get is from myself when I look into the mirror. As cliche’ as the saying is, it could apply perfectly for you and your goals: “If you want something done right, you gotta do it yourself.”

The Real Estate Market is a Fluid Place

Three things stick out to me in regards to this current person’s situation.

  1. They have been looking for 6 months. That is a long time. That’s like 180 days! And nothing has been accepted.
  2. The Realtor comes back and repeatedly tells them, “We need your highest and best”.
  3. They are bidding on the most mainstream properties today: REO’s (foreclosures owned by a bank/government).

What should you take away from this?

If it walks like a duck and quacks like a duck, it’s probably a duck. In this case, if there are three very similar parameters to the ones above, then your strategy probably isn’t an efficient one. This strategy may have worked well a few years ago, but in many markets, things have turned around for REO’s and it is extremely common to hear “highest and best” offer.

While I understand the pro to this strategy is you are not having to spend money on a marketing budget, the obvious con is the competition is fierce, and like this person has experienced, you run the risk of going a long time with nothing accepted.

If you are doing anything for this amount of time, with no results, it is time to audit your situation and reassess. In this person’s case, I think it has very little to do with their Realtor and more to do with their strategy.

Solution – organic marketing. Quit going after the houses that every investor and their brother’s sister’s grandma’s neighbor’s uncle is going after. Sure, this may cost you money upfront in marketing, but the trade-off is much less competition.

There is No Such Thing as a “Bad Idea” in Real Estate Investing

First, the obvious. Legally speaking, yes, there “are” bad ideas.

For this person’s situation, I would not say that them submitting a list of repairs on a short sale is a “bad idea”. If the Realtor told them they would be “wasting their time”, then there is nothing wrong with that. As long as it is not the Realtor’s time, then this person has every right to spend their time how they want.

What should you take away from this?

  • You’re the Boss. If you want to spend your time doing something (like putting together a list of repairs), then go for it. You are your own boss, and that’s what is great about it. Someone (Realtor) my suggest that you are wasting your time, but at the end of the day, it is your time to spend however you want.
  • You Never Know. Just because someone says it is a bad idea that will waste your time, it just might be exactly what the doctor ordered.
  • Time Management. You need to be wise with your time, and you definitely don’t want to be wasting it. What is a good way to avoid this? Keep reading…

Solution – Ask Around. Get multiple opinions. I’m not a statistics junkie, but what I do know is that a Sample Size of 1 is not a very good way to conduct a survey. Call up some other people. Tell them what you are planning on doing. If you call five people and four say, “Well… I’ve never had any success with that.”, then you should probably just NOT spend your time doing it.

Final Thoughts

I don’t think this investor is “crazy”. I also don’t think the Realtor is a push-over or anything of that nature. From the outside looking in, it sounds like a change of strategy and a bit more education to the Realtor member of the team would do this investor a lot of good.

While it may take more upfront money (whether that be obtaining a Realtor license or beginning organic marketing), it seems to me that the trade-off would be well worth it. Avoiding the majority of competition (organic marketing) and being able to conduct your offers however you please (getting licensed) is an attractive option from my experience.

I certainly don’t have all the answers though, so please leave your comments below on how else you think this investor in particular, or investors in general can make their life a bit easier when it comes to the above mentioned things.

Photo: Micha? Koralewski

About Author

Clay Huber

Clay (G+) is a licensed real estate agent and the owner of Huber Property Group, LLC, a real estate investment company located in Grand Rapids, MI. His company purchases distressed properties with the main exit strategy of fixing them up and reselling with owner financing, particularly, land contracts.


  1. Our agents are very busy but they do work with investors. However, they do train their investors.

    To get offers accepted on REOs and short sales, as you mentioned in your article, they have to be good, solid offers in today’s market. Everyone and their brother is offering on them. Our agents submit offers, sometimes accompanied by a list of needed repairs, usually accompanied by a BPO justifying the offer, always with a proof-of-funds letter. We have even had full price offers submitted on these deals submitted with full price earnest money and still had the offers rejected. So, I hope this buyer is for real and has cash on hand to back up his offers. Otherwise, the agent is truly wasting his/her time.

    This agent has been working for 6 months and gotten zero income from this client. In the past when this has happened for me, I’ve written a note to the agent thanking them for all their time along with a check for $150 and something like, “Hang in there; this will work eventually!” The agent is shocked, thrilled and re-energized.

    As you said, Clay, put yourself in their shoes – would you want to work 6 months for someone for zero return?

    Thanks for your post.

  2. Good read! I am an Reo listing agent and investor. Submitting a repair list is usually not a good idea. The problem is it suggests the listing agent is incompetent and failed to mention any of these repairs to the seller. 99.9% of the time the seller already knows what needs repaired and has priced the home accordingly. If the investor is getting beat out on multiple offers every time them that suggests the home was priced just fine or under priced.

    If this investor is continually submitting offers well below list price the listing agents will begin to notice this as well and not take him very serious. Like you said, on another time when things were slower that might work once in a while, but not now.

    • Thanks for your thoughts Mark.

      Good points on the REO listings. In this investor’s case, it was a short sale he was submitting the list of repairs on, which I don’t think hurts when it can help bring the BPO into reality.

      “If this investor is continually submitting offers well below list price the listing agents will begin to notice this as well and not take him very serious.”

      Great point. Your name and reputation goes a long way in this business, so you don’t want to develop the “oh here comes the no chance of offer being accepted” guy/gal.

    • For me, I didn’t have the time nor desire to “train an agent”. If you do, then by all means go for it, but in my case, since that was my attitude, my only solution was to become an agent myself… so that’s what I did 🙂

      As always, thanks for the comments Brian.

  3. As others mentioned, as a Realtor I would set realistic expectations about competing or walk away. Therefore, I’d really need to know more about what kinds of offers you are writing. There’s no way I’d agree to write dozens of low offers myself which have virtually no chance of being accepted.

    I just pulled MLS data from the Twin Cities. There were 396 single family REO sales in the area in the past 30 days.

    Only 3 sold with a 20-30% markdown from list price
    Only 9 more sold with a 15-20% markdown from list price
    Only 25 more sold with a 10-15% markdown
    171 of them sold at or over list price

    As you can see, your chances of succeeding aren’t great at going more than 15% off of list (at least here). I would agree that you should consider getting your own license and then analyze what types of offers might actually win.

  4. I think many new investors assume that realtors will just do all this leg work because there is a big payday at the end. How big is the payday really on a low end property. If you are new, they aren’t even sure you can close the deal after all that work. Many a realtor has been jaded by the new investor with big plans, but little follow through.

    If an investor would put themselves in the shoes of the realtor, they may be able to make the processing a little more appealing.


  5. “Many a realtor has been jaded by the new investor with big plans, but little follow through.”

    I’ve noticed that too, and I don’t blame them. If I put myself in their shoes and that is their experience, then yea, I’d be a bit jaded too.

    Thanks for the comment.

  6. Also just because you get your licence doesn’t mean you can’t work with other agents.

    I have mine and put in offers myself all the time.
    However I meet tons of Realtors that talk to me about finding me places and I tell them that if they bring me a deal I’m interested in they can write the offer and I’ll list the resale (assuming it is a flip) with them.
    I tell them I am interested in deals not maybe saving money on a commission so it is well worth it if they find the deal, and will bring me more since I DID pay them.

    • Excellent point Shaun.

      By no means does having your license lead to not being able to work with other Realtors, but as you pointed out, it will probably lead to actually working with MORE Realtors. The more you work with, the bigger your network becomes.

  7. Buying any property with any of these goals, buy and hold, buy and flip, you need to know your numbers. Buy/sell costs, rehab cost, after repair value and your profit. That being said, I my first offer is ALWAYS at asking price. Then if asked for best and final, I have the agent ask the LA what it’s going to take to get the property, some will tell you, some won’t. BTY, it’s always a good idea to have the LA represent you so they can get both sides of the commission.

    If you get the deal, it’s tied up. Now is the time to get a home inspection. After you receive the home inspection report and have estimates on all, major repairs, as well has all health, safety issues and code violations negotiate with the seller. Never attempt to negotiate before you tie the property up.

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