I met with buyer agent; Now what?

[William A.]

I met with a buyer agent this week to start looking for investment property.  What should my expectations be from her, and what should I be doing to make this a successful relationship?

[Jesse Waters]

When ever I get a new buyers agent I always like to find out their experience with investment properties.  I try and avoid agents who aren't also investor's.  Most agents will start spouting off random numbers that they think the property can rent for, some are wildly off.  Do your homework.  Before you look at properties you should know what the target rents go for in your area, where I live the best properties sell for about $100k and rent for about $950, that is our sweet spot, generally referred to as the 1% rule (property should rent for 1% per month of purchase price $100k property=$1,000/ month).  We usually get just under 1%, but we have low taxes and I can still cash flow even at 0.7%.  

Don't let them talk you into going above your market's sweet spot, but do consider the appreciation of an area and likeliness of keeping long term tenants.  Agents earn more when you buy a more expensive property.

If you are going to use a property manager it wouldn't hurt to meet with them to get some ideas on good area's to look at and your best price range.  After you have looked at a few meet with your manager, if you are using one, to go over the pro's and con's of each.  

The biggest thing before you buy is to do your homework and don't let the agent over sell you. When you analyze each property over estimate your expenses, use 10% vacancy, use the low end of your rental range, and the numbers still look good, you might have found a deal. Get a book or two on REI, learn as much as you can.

Hope this helps you some.