Are Real Estate Investors Really Necessary?

by | BiggerPockets.com

Welcome back!

At least once a week this question is emailed to me from newer investors trying to wrap their heads around real estate and mobile home investing. In the start of my career I too asked these same questions about the need for us if buyers and sellers are actively looking for each other.

The answers I received in the past were less than suitable to me; however, over the past decade I have come to learn different reasons for our true need in most markets.

Related: 12 Simple Tips For Beginner Real Estate Investors

Let’s look at each part of this two-part question.

Can’t Sellers And Buyers Just Work Out A Win-Win Deal Between Themselves?

Yes, of course they can, but how realistic is this?

Real estate investors choose to become experts in real estate investing strategies in order to help sellers sell and ideally save a seller’s credit.

Conversely, non-investor-buyers have their own areas of expertise (i.e. doctors, mechanics, etc). Many non-investors simply do not look at real estate as an investment tool. Many sellers and buyers will simply prefer to react to your advertising and ability to help them quickly. Until this mind-set in non-investors changes, there will be a need for us investors to help.

In reality many investors begin investing with little money, less-than-perfect credit and only moderately educated about real estate investing. When I first began helping sellers and buyers I had less real estate experience and education than most regular single-family homeowners. In my career it is only because I cared about sellers and buyers and took daily action that I was able to make a career and name for myself in my mobile home investing market.

Over the years investing, I have made countless mistakes and errors throughout the investing journey along the way. Additionally, during this time I have created tremendous value helping many sellers and buyers finding, holding and selling homes.

Investors are busy daily changing lives and their local real estate markets everyday.

Are Real Estate Investors Necessary?

Yes, in many cases investors may be needed. In almost every real estate transaction, investors bring more than just a signature to the closing table.

Investors can help motivated sellers by:

  • Closing quickly or on a specific date
  • Bringing cash or other financing to the closing table
  • Being more flexible with purchase terms than traditional buyers
  • Bringing clarity to a seller
  • Giving sellers more options than ever thought possible
  • Helping where no other options seem to be available
  • And in countless other ways

Many times when we investors approach sellers we are first here to listen to a seller’s situation and wants, then to educate the seller to their selling options. After this we can ideally present a plethora of methods, prices, terms and strategies to purchase almost any seller’s property.

Related: Why Real Estate Investors Shouldn’t Be Afraid To Ask In Spite Of a Likely No

Conclusion

An end user that will be living in the subject home will almost always pay more for a property than an investor will pay. In short if a seller can sell for more money to an end user, then great for the seller. However, sometimes you will find you are one of the only buyers willing to help a seller and actually pull the trigger on the property.

As a real estate investor, what value do you feel you bring to the market?

Let us know your thoughts in the comments section below!

About Author

John Fedro

Investing since 2002, John started in real estate accidentally with a 4-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to his cash-flowing portfolio. Since these early years, John has gone on to help 150+ sellers and buyers sell their unwanted mobile homes and obtain a safe and affordable manufactured home of their own. Years later, John keeps to what has been successful—buying, fixing, renting, and reselling affordable housing known as mobile homes. John shares his stories, experiences, lessons, and some of the stories of other successful mobile home investors he helps on his blog and YouTube channeland has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest here and on other prominent real estate podcasts, authored a highly-rated book aimed at increasing the happiness/satisfaction of average real estate investors, and spoken to national and international audiences concerning the opportunities and practicality of successfully investing in mobile homes.

4 Comments

  1. Great post John! I’ve always wondered what investors mean when they say “we find solutions to people’s problems”. You outlined what that means wonderfully! I will definitely be adding your reasoning into my ‘scripts’ when I start my marketing campaign. The preparation will make answering those calls a little bit easier!

  2. Good article, John! This week I closed on a “sub2” deal. Seller was behind $8K and property needs over $18k of work. She had met with other investors and even that ugly house buyer but no one was able to make her an offer. It feels good helping this client save her credit and giving her a way out besides letting the home go into foreclosure. A knowledgeable investor brings many options to sellers that a typical buyer does not understand.

    • Hi Rocky,

      Thanks for commenting. Congratulations on the home!! Additionally congratulations for finding a profitable and win-win solution to the problem. Even between investors there are so many differences in what each investor will consider a “good” deal. I have found the buy and hold investing strategy typically will allow me to pay more to the seller over time and typically wins out in my negotiations. Love the last sentence of your comments, ‘ A knowledgeable investor brings many options to sellers that a typical buyer does not understand.”

      All the best,
      John Fedro

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