Working with investors..tips?

[Jany P.]

Hi all!

I've recently joined my mothers real estate brokerage firm and one of the goals is to start working with real estate investors.

For the investors out there: do you generally work with realtors in your deals? If so, do you actively seek agents or is it the other way around? Also, what are things that you look for when working with realtors?

I appreciate all of the advice!

J

[Tom Goans]

Jany P.,

Great questions and a great way to begin your career.

I am an old investor with almost 50 years or experience. During this time, I have met many other investors. My father and grandfather were very successful investors.

It seems to me all investors have different methods for seeking investment opportunities. Some prefer not dealing with real estate agents for numerous reasons. Primary negatives are most agents push retail and above prices, the information they provide can be very questionable, time consuming and delays, and not fully communicating between the buyer and seller. This speaks to my experience as well.

I cannot tell you how many times a real estate agent told me my offer was not good, and yet, the seller accepted the offer. Investors are not afraid of rejections of their offers; they are steamed when the offer is not presented in a positive light or not at all.

Then again, some investors rely on certain agents. Typically, the preferred agents take the time to fully learn and understand the buying habits of the investor. You need to know the way the investor wants the opportunity presented for consideration. You need to know the risk vs. reward the investor prefers. It is not just about yield, or cap rates, etc. You will also need to develop an understanding of how the investor likes to buy. Know how the investor feels about the business as a whole. Learn of each investor’s concerns and opinions. You do not want to present what you feel is an opportunity in a neighborhood where the investor feels the neighborhood is on the decline.

The older and more experience the investor, the less puffing you should apply. Blue sky - unrealistic assumptions - will generally receive an immediate rejection of the opportunity and greatly diminish your creditability. Facts, not assumptions, influence investors.

Did you recently read the Department of Defense furloughs is equal to a 20 percent reduction in pay for those people? This will affect many people outside the government. Did you recently read 1 in 3 people are getting some type of government food assistance - a number that has been growing for years? Investors do not ignore facts or factors. Understand how each potential investor feels and reacts to news.

Best of luck. Be the best prepared and informed and you will have more business than you can handle.