Real Estate Agent or Banker first?

Question

I'm new to the investment game and I'm still trying to make the connections I'll need for my first purchase.

I am interested in purchasing SFR(s) to rent, and I have heard conflicting things about whether I should seek out real estate agents or bankers first.

One thing I've heard is that I need to get pre-approved before I go talk to real estate agents or they won't want to "waste time" with me.

The other advice I heard is to find a good real estate agent who works with investors and then get their recommendation for some good bankers to deal with.

Which makes more sense? Thanks in advance for your help in figuring out where to get started!

Brie Schmidt · Answer

I am an agent, and I have lots of clients ask me for a lending referral.  I don't mind if they don't have one yet, but I can't even start looking for property will I know their budget and have a pre-approval.  It only takes a day so as long as the client is on top of it then it isn't a big deal.

I strongly prefer they use my contacts though, only because I have worked with them and know their strengths and weaknesses and how to manage them.  When I don't know the person it is much more labor intensive as I need to follow up about every little thing to make sure it is getting done.

Robbie Reutzel · Answer

I am a broker and, while I will do some searching on the MLS for clients without a pre-approval, I do not do any showings without one.  I also keep a list of lenders who I have worked with in the past and who I know I can rely on.

My rule is that you want a lender who 1) funds their own loans; and 2) can get on the phone with the underwriter in 45 minutes if a real emergency starts to happen with the closing.

Hope this helps.

Anthony Ogletree · Answer

Welcome to the Bigger Pockets Community!

As a fellow semi-newbie, I'd recommend finding some good wholesalers if you intend to do some investing. While it's certainly good have a solid real estate agent in your network, they generally tend to lean on retail properties for their sources versus wholesalers who can find you great deals at below-market prices. Unless you're looking to invest in some turnkey properties, I'd certainly start there.

I'd also recommend downloading the ULTIMATE BEGINNER'S GUIDE TO REAL ESTATE INVESTING. Its a great read for people just starting out.

Good luck Frank and happy investing!

Jerry Padilla · Answer

@Frank B.  Getting a lender that is knowledgeable when it comes to investor financing is important. I would suggest getting pre-approved first.

Brian P. · Answer

God it sounds like your just planning to be a retail buyer so I would toss out using the investor title for yourself. Try the buyer title,  using an agent and a bank, just like the average home buyer. The investor title foundation you need at this level is how to be a no money down, no bank loan investor and that info is available here and on other good sites too.

Start cracking the books and study,study, and study and become a investor which is not really just someone who invests. My investing goal is to double my money every x years using the rule of 72. People who invest their money in a savings account at 1% now days will double their money every 72 years at that rate but they tell me it's good for them because it is safe. These are some of the potential lenders you should be hunting, good for you, good for them.

William Hochstedler · Answer

I'd suggest going to your local REIA where there will be both lenders and real estate agents who, by definition, will be investor friendly.

Try to talk to several agents and lenders and, if you meet someone you feel comfortable working with, expand your network through their recommendations.

Certainly fill out a loan application as early in the process as possible to know your borrowing power.

Wm

Anthony Ogletree · Answer

Also, depending on the type of rental investments you're looking to purchase (turnkey or fixer upper), keep in mind there are different types of loans that you may qualify for as well. It all depends on who you go to for financing (credit unions, savings and loans, community banks, a broker, etc). Also keep that in mind in case you have a hard time with the first lender you talk to. Just like investing, financing the deal provides lots of different avenues to explore.

Max Fisher · Answer

Get in Touch with two or three well respected and seasoned agents in your area. Ask each agent for two lenders who can get the job done. Pick two of those lenders. One who you feel is a good canidate and the one to work with. Keep in touch with your second choice just in case the first can't preform. Then go find your real estate agent!

Steve Vaughan · Answer

Good question.  I would get pre-approved first if I was going your route.  Let's you know what you can look for.  Buyer reps are everywhere.  Try not to get locked into the first one you meet.  Good luck!

Real Estate Agent or Banker first?

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