Investor Friendly Agent?

Question

Hey all,

I am an agent in the Chicago area (mostly South Side, South, and SW suburbs). In my 6.5 years, I have mostly focused my efforts on traditional homebuyers and sellers. Considering that I want to get started and get in deep with BRRRR and multi-family investing for myself, I would like to work with more investors. What are some traits or skills I need to develop so I can effectively work with (and meet) more investors? I am currently reading David's Book (BRRRR) and I have taken the CCIM Foundations course for commercial real estate. Any advice or tips would be helpful.

Bruce Lynn · Answer

A couple of tips I might give you is like @Nathan G. suggests, start attending some of the area networking groups for REIA.  You can find some here, on meetup, or facebook.   Not sure I would expect a lot of business from those folks, but you can hear more about what they're thinking, where they find deals, network with trades, etc.   I was just shocked one time at a big networking group like this some years ago...200-300 people in the room...and they asked for a show of hands of who was licensed...about 1/2 raised....then another question was how many people had more than 1 property....and it was like 10% of the hands.  Many of these people I had seen for years at these meetings, so just be aware you could be meeting lots of realtors and people who want to be investors, but never do anything....I always like the guy who told me he is a wholesaler and would never buy from me off MLS.  He has the truck with the big WE BUY HOUSES CASH logo, etc.  Then I asked how many deals he had done in the last year or two and he said none.

I think the biggest hole for most newer investors is rehab costs and contractors...so if you can help nail that down for them, you could be helpful.  I've had too many newbie investors think reno will cost $100K, when it should cost $25K, so when they're using the wrong numbers, it's tough for them to buy.  Nothing around me has that kind of spread or padding.   There is a bigger pockets book on estimating rehab costs, so that is also a start, but talk to contractors, stop by houses in progress, ask for references, see the work, ask about costs.   Know how much a roof costs, know what interior paint and flooring costs, Know what a bathroom costs to reno.  Know what appliances package costs.  Know what granite costs if that is in your market.

Good luck and best wishes.

Eudith Vacio · Answer

Hey @Raven WItchard!

Welcome :) I agree with everyone here @Nathan G., @Bruce Lynn & @Scott E. with their suggestions!

But I would like to ask you a few more questions regarding your specific investing goals. Are you trying to get into commercial real estate, too? I started off buying a property for myself, and house-hacking and then started attending networking events, bought another property, and then became an agent, and then my 3rd property was a BRRR. Slowly but surely you will get there! If you want to connect, let me know :) I'm on the south side, too!

Scott E. · Answer

I think the most valuable trait you can have as an agent who wants to work with investors, is learn how investors underwrite deals.

Agents are a dime a dozen but very few understand how real estate deals work for investors, which has always surprised me. If you simply are just able to understand and answer these questions when looking at properties, investors will love you:

1) How much work really needs to be done to make this home marketable to a future buyer?

2) What work needs to be done that is not cosmetic like plumbing, electrical, sewer, roof, HVAC, windows, etc.

3) How much will all of that work cost, approximately, and how long will it take to complete?

4) What are the holding costs going to be on a deal (points, interest, taxes, insurance, utilities, lawn maintenance, etc)

5) What ARV sales price needs to be achieved for the investor to make money, and do the comps support that value?

Agents for years have called me with a "deal" and loosely just say something like:

"Check this place out for $800k... just needs a little work and an addition and it'll be worth $1m when you're done with it!"

I laugh because I don't even need to see the house to know that if I bought a house for $800k, remodeled it, added square footage, and sold for $1m, that I would lose money on that deal.

Nathan Gesner · Answer

You can search for investors and investor groups in your area. Joining a group and networking face-to-face is a great start.

You have to speak the language, so taking classes on investing and commercial property would be a great start. Learn what you can, see where the holes are, and start filling in where you lack. Take a couple commercial lenders to lunch, get their advice, let them know what you're looking for. Build a relationship with them, refer business to them, and they'll reciprocate.

Michael Ansusinha · Answer

Hi @Raven WItchard

To add to what others said, investors appreciate is having a wide network.

This is especially attractive to OOS and newer investors who may not have their own list of vendors and contractors.

If the investor is any good, they'll remember your referrals and want to work with you in the future!

Raven WItchard · Answer

Hi Eudith!

Well, I got my license thinking I would go right into commercial, but I went into residential. It also seemed like a good fit because I have had a couple of personal experiences that allow me to empathize with buyers and sellers. My ultimate goal is multi-family investing. The sales side is cool but doesn't excite me like investing...I know investing comes with a lot of ups and downs, ebbs and flows.

I  would be interested in connecting. You have 1000% more experience than me in this!

Raven WItchard · Answer

Such good advice! I'm not shy but I have to get out and meet people. Many of my friends and family know my desire to invest, so I hate to bring it up around them when I don't have a property under my belt yet. I want to invest more than I want to sell. I don't want to be one of the 90% from your meeting but I am ready to learn NOW.  LOL. Thank you again!

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