How to find an investor-friendly real estate agent, part 1 of 2
Finding an investor-friendly real estate agent, part 1: Meet the agents
Many real estate investors work with real estate agents when buying property.
After all, real estate agents have ready access to the Multiple Listing Service (MLS), a robust source of properties for sale. And real estate agents can be great sources of information about cities and neighborhoods, housing trends and local vendors.
But the reverse is not true. Many real estate agents don’t work with real estate investors.
They might tell you differently, but dig a little deeper and they often have limited experience with investment property purchases. This makes it difficult to find a real estate agent who can think like an investor and is prepared to help you find a good buy.
So, how does one find an investor-friendly real estate agent?
Just ask: Do you work with real estate investors?
There’s a big difference between knowing real estate agents versus finding ones who are knowledgeable and prepared to work with investors, especially when buying an investment property.
Real estate agents aren’t the only sources of properties for sale, but they’re definitely a source. It pays to know good ones who can help you in your search.
The search process for finding an agent is similar to looking for an investment property. First, you need to define what you’re looking for, then understand the types of real estate agents you’ll meet, and finally choose the one that’s right for you.
When I meet real estate agents, I always ask, “Do you work with investors?” Most say yes, occasionally some say no. These are three types I’ve repeatedly met over the years.
Meet Real Estate Agent 1: Paul
Hi Paul, do you work with real estate investors?
Yes, I work with everyone. What are you looking for?
Paul’s been a real estate agent for many years. He’s professional, friendly and knowledgeable about all phases of buying and selling single family properties. He does well through referrals and has good connections in the community.
Paul doesn’t own investment property himself. He has a good handle on housing supply and demand in his community, but doesn’t track rental statistics and has never put together a cash flow projection for an income property. He considers investors to be buyers who aren’t overly motivated. They want to make offers, but infrequently buy.
How to work with Paul: Keep in touch. Paul can be a source of leads and community knowledge. If you’re looking for a property, be specific with him on your criteria. You’ll run into Paul from time to time at community events. Maintain a business relationship, but don’t expect investment insight that isn’t there.
Meet Real Estate Agent 2: Maria
Hi Maria, do you work with real estate investors?
Yes, and I have several investment properties myself.
Maria represents a rarer type of real estate agent. Like Paul, she’s professional, knowledgeable and has built great community connections. Her business is primarily referral-based and she’s known by her peers as an investor-savvy agent.
Because she owns investment properties, and has for many years, she knows the benefits, pitfalls and demands that go with buying and holding income property. She’s a great source for knowing about local housing and rental demand, as well as dealing with tricky tenant situations. She can advise on home improvements that pay off, how to retain renters and how to project cash flow.
How to work with Maria: If you’re looking to buy and hold single-family income property in her area, she’s a great resource. She knows her stuff and how to think like an investor. She also knows what appeals to renters and can run a cash flow projection. She can be especially helpful for investors new to her market, because she often generously shares her expertise.
Meet Real Estate Agent 3: Peter
Hi Peter, do you work with real estate investors?
Yes, I specialize in rentals and property management. I frequently work with investors.
Peter’s a specialist who focuses on a specific area of real estate. Like other specialists, he handles a high volume of a specific property type. His specialty varies – it might be property management, distressed properties and foreclosures, relocations or a number of other areas. He’s seen many real estate deals close, many that don’t and has a treasure-trove of stories to tell based on the experience. Peter may or may not own investment property himself, but he works with investors or their agents due to the nature of his business.
How to work with Peter: It’s good to have specialists like Peter on your team. Whatever the specialty, from property management to working as an REO listing broker, specialists are a great resource for their area of expertise. They can answer questions about process, help navigate hurdles and often have the ability to understand deals from the perspective of the buyer, seller, bank, agency or other third party involved in real estate transactions.
Bottom line: Who to choose?
If you’re like me, you’re generally looking for two things:
First, to find real estate agents in your target market who have the right combination of skills, experience and connections to help you find good investment property deals.
Second, to build relationships with people, including real estate agents, who can help you build and manage your investment property portfolio over the long term.
Just as there are many types of real estate investors, there are many types of real estate agents. The best ones can help you find good investment property leads and navigate the landscape.
If you’re considering buying an investment property, or actively looking, it’s well worth your time to get to know reliable, knowledgeable real estate agents. Generalists, agent-investors and specialists each have something to contribute. The real estate agents described above represent people I’ve met, but they’re not specific individuals.
As a real estate investor, you’ll be well positioned if you develop a network of trusted contacts. These include real estate agents, contractors, vendors, property managers, attorneys, CPAs and others with both broad and specialized knowledge of investment real estate.
And don’t forget fellow real estate investors, who have hard-won experience to share and great stories to tell.
Who’s on your investing team?Join my mailing list and read Part 2: How to find an investor-friendly real estate agent, part 2: Key questions to ask.