Tips to become an investor friendly agent?

Question

Hi everyone!

I have been super interested in real estate investing and been a listener to BP since my junior year of college (2018). I finally decided two months ago that I couldn't wait any longer to get into real estate, and I became a realtor 2 months ago.

I was curious if anyone had any tips or things I can try to learn to be a good real estate agent for people who are real estate investors or looking to get into investing.

Any help would be appreciated! I am super excited to get my real estate business rolling. Thanks in advance if you reply.

Brian Miller · Answer

@Jacob Theado, my advice in starting out is to find another investor agent in your market who is willing to mentor you, and join their team or brokerage. Most teams and brokerages have splits or compensation for agents working underneath them or along side them, so they have some financial interest in your success and are compensated for their time to teach you. It's also "free" for you since you're not technically writing a check to your mentor, it's just coming out of your commission check. I started at a large team at KW who mostly did retail and not a lot of investment properties, nor did most of the agents understand them. I moved to a brokerage who specialized in rentals, had a PM, and a construction company. That increased my knowledge 10 fold as I had no experience with PM. My broker was available for questions that came up with the transaction, leases, or PM in general. Having a quick go to is great to have, and I felt more confident in advising clients on which properties to buy and how to navigate the countless things that can come up during a sale. I purchased two rental a few years ago, which also grew my confidence and business.

To wrap, my advice is to find a mentor, get a year or more of sales under your belt, then buy a rental when your comfortable. You'll find that one of the best tools of being a great agent is being able to problem solve, and these should give you the knowledge and confidence to do so. Good luck to you!

Eliott Elias · Answer

Be as versatile as possible, and be ready to submit many offers. Investors are hesitant to work with agents that do not understand their investment criteria. Be well connected in the investor community and see what different techniques they are using to make money in real estate, pass that information along to investors.

Joshua Janus · Answer

@Jacob Theado I think this describes what an investor friendly agent should be.

"You really want someone that invests in their market themselves and understands the numbers. They should be able to determine the COC, annualized return, estimated ARV of a BRRRR, accurate rent comps and more. The valuation and market value of a multi family property differs from a single family and you want someone that understands the distinctions if you go that route. If they just represent first time single family home buyers and aren't constantly finding off market properties and reviewing deals, you'll find a better investment through someone else."

Karl B. · Answer

OK here's my list:

-Know the typical investor terminology: 2% rule, etc. An amazing amount of RE agents don't know what the 1%/2% rule is.

-Bring deals to RE investors based on their investment parameters. I've bought properties from RE agents and asked them to send me more similar deals in the future. They'll either A) Disappear (which is silly as one would think they'd want a potential 'repeat customer') or B) The ones who do bring me deals send me deals send me ones that don't meet my parameters.

-Send them a Christmas card once a year (most RE agents in general don't do this; the agent who sold me my house in L.A. did this and guess who sold my house when it was time for me to move? Her!). The agent also had a picnic every summer which was a cool idea. I was always out of town or busy but the fact she had a gathering with her buyers/sellers she had worked with over the years was a really neat idea.

There are some other good ideas already mentioned like have a list of good tradespeople who do good work at a good price. That's gold to an investor.

Joe Facenda · Answer

I think @John Mendez mistook my comments.

Yes, you need to be an investor to be a great investor-friendly Realtor but as a new Realtor and one with no investment experience, which comes first the chicken or the egg?

You are billing yourself as an investor friendly Realtor, not a Realtor friendly investor.  So the emphasis is on your Realtor skills and how you add value because you know the market and know your contract.  You have negotiating skills.  You know how employ leverage in a transaction so your side gets a little more of what they want.

All of this comes from getting transactions under your belt.

Think of it another way.  An investor comes to you who has bought a few properties.  Sure they want your help on the investing side of things.  But they really want you to artfully and skillfully navigate the sale process for them.  They probably already have an idea as to what the home would rent for or the ARV and probably have a set of financial parameters they use to decide if a deal is good or not.

With Zillow and all of the other sites, for listed property anyway, finding the property is not the trick.  Getting it under contract with great terms and getting it to settlement is where the value is added.

When I go to a new market to invest, I want a Realtor with both Realtor experience and investor experience.

However, I had to choose between an experienced investor who just got their license and an experience Realtor with no investing experience, I would take the experience Realtor every time.

Rob Kishi · Answer

Along with everything already said, having strong connections (contractors, property managers, lenders, etc.) and a creative perspective (room conversions, value-adds, financing, etc.) to piece deals together goes a long way. Helping clients (especially new investors) complete their projects successfully beyond simply acquiring the property provides incredible and often unexpected value. If they win, they will be back for more.

Building a network and gaining knowledge and experience comes naturally if you are investing consistently and doing good deals yourself.

Andrew Moore · Answer

To echo some of what has been said before:

In order to be as valuable of an asset to investors as possible, you need to understand what they are looking for. You need to understand the metrics they are using to analyze deals. For all of my investor clients, I find out what their initial criteria is for a property, and if it doesn't meet that mark they don't see it.

I believe if you plan to work with investors you almost have to have your own investments, or be working towards that. You have to be able to speak the language, you have to think like an investor, and in my opinion the only way to really do that is to go through the motions of analyzing your own deal.

All of that is only one part of the deal. Once you locate a property that is identified as a good investment, you have to also be a good enough agent to get it locked up for your client. You can't be so investor focused that you forget that you have to work with a realtor on the other side. Educate yourself as an agent. Find a good group of people to learn from. Be the agent that can identify a good deal, and can make sure it closes as smoothly as possible.

Lastly, be a resource after that. Be a resource they go to for rental rate estimates, or recommendations for contractors. Provide updated market values. A lot of investors like to know what their investment may be worth from more of a net worth standpoint.

Zachary Inman · Answer

@Jacob Theado I think determining ways to add value to investors is your greatest asset. Bring them deals, have local connections, be able to negotiate better terms, etc. Most of these skills are gained through experience and expanding your network.

Also, an investor-friendly agent is different from a normal agent. Meaning, your business is going to be a lot of quantity of lower-cost deals rather than fewer, higher list price deals. This means it's going to be a lot more work on the front end to build your business, but investors are more consistent in deal flow than typical clients.

John Mendez · Answer

Hi @Jacob Theado

The best way to become an investor-friendly realtor is not to become a great realtor, it's becoming an investor yourself. Only 9% of agents own a rental property of their own, yet they claim to be investor-friendly. It's one of those practice what you preach situations. Once you start buying properties and getting experience being an investor you'll be able to put yourself in their shoes and truly understand their needs because you been through the process. Start connecting with local investors and ask them about things like deal structuring, what they look for when doing walkthroughs, calculating repairs, etc. Also, learn another language if you can, it opens you up to an entirely new world of opportunities.Just to be clear, I am not saying to neglect your agent skills those will come in handy. Also, don't rush into getting your own investment properties just to say you're an investor friendly agent. You won't be able to become a great investor agent until you actually immerse yourself into the world of investing.

Joe Facenda · Answer

Best way to become an investor friendly Realtor?

Become a great Realtor, first.

Meaning?

Get a Realtor mentor.  Do deals.  Work with traditional buyers and sellers.  Do rentals.  Prospect.  Market.  Get transactions under your belt.

You can know all the ins and outs of investing and recognize a good deal but if you can't get to the settlement table, you haven't helped anyone.  Or, more likely if you are not skilled at negotiating and spotting the minefields in a transaction, getting to the settlement table will be like flying a plane thru a thunderstorm.  Having your clients pull out the air sickness bag and place the oxygen mask over their nose is not a great way to build a business and get future referrals.

Yes, to top it off, you should have your own investments. But learn the skills as a Realtor first.

The Out of Town Landlord site I created requires all Realtors on the site to be both experienced Realtors (at least 3 years) AND investors.

I value the Realtor expertise as much as the investor expertise.

Hope that helps.

Tips to become an investor friendly agent?

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