Investor-Realtor? Frustrated

[DG H.]

I've been an Real Estate Investor for 10+ years...I've had my Realtor License for 2 years. I'm always wearing two hats and sometimes they get confused. Since I've had my license I haven't bought a property for myself. I thought I would make a little more money being a realtor while I invested but this Realtor gig has taken on a life of it's own. I'm a Realtor with a Big National Company and they expect everyone to list, sell, close and repeat. I have to admit I'm very competive and it's not a good thing  since I spend more time being a Realtor than an investor. Everytime I start to offer on a property for myself...the listing agent says my seller won't take that! Before I was a Realtor I didn't care I offered anyway and sometimes I got the deal and sometimes I didn't. Now it's like I can't offer since I will offend another Brokerage. 

I need some input from others that have had the same problems with the investor-realtor life. Frankly I really make more money with less work being an investor but its not a steady money machine. As a Realtor I'm working non-stop and have money coming in more frequent but it's more frustrating since I work for nothing when clients don't buy, can't buy or just disappear. 

Thanks for listening...It's been a frustrating 2 weeks. 

[Federico Gutierrez]

I feel you my friend.

Take off the investor hat and just wear the realtor hat. You can't have both. Buyers don't really get attached over $5000 to make a deal work, they love the house and don't want to lose it. As an investor $5000 is a lot, new bathroom for that price. It's frustrating I'm right there along with you.

[Chris Soignier]

I'm a new agent, but I don't see it as being a problem. I can offer to buy or list sellers' properties, which provides more opportunities to convert leads into sales. Access to the MLS is huge in term of providing leads and comps. I can view props ASAP w/o depending on a buyers' agent to show them to me.

It helps having an investor-friendly brokerage - mine even lets me post my wholesale deals on the company blog.

[Michael Mcghee]

i dont have a real estate license because im more of an investor. I have agents I employ and that will move expeditiously for me because they know the deal will close. Also not being a realtor allows me to have that buffer when I need one. Which is more lucrative for you? Drop the other one and concentrate on that one thing. Ex: A realtor and investor sometimes skate thin lines. If a seller is willing to sell you a property dirt cheap and they ask is this the most you think I can get, as a realtor you have a fiduciary responsibility to advise them according to your knowledge. If you have a buyer lined up for 10k more and didnt disclose it then you could be in big trouble. As a private investor yiure not bound by those same rules and may simply say I dont know but my numbers worked out at this price and I can close in xyz days and you dont have to pay a commission. 

[Amy A.]

Yes, I've had the same problem.  Change to an agency where they let you do as much business as you want, and focus on your investments.  I've decided to tell people that I'm not taking clients right now and just take low maintenance clients.  No regrets about being licensed though.  I love the access to property, data, and info!

[Jimmy Cantave]

@Amy A. I think you should focus more on investing you control your own speed and have a realtor to summit offers for you or find an investor friendly company that understand what you are trying to do!!👍👍👍

[Ross Greene]

Use being licensed to your advantage. You get to use that commission however you like whether its toward the purchase price or to cover your closing costs.  Who cares what others think about lowball offers. As for a reflection of your entire brokerage, that sounds a little strange to me.

Saving 3% off the top is a huge savings let alone if you get their price down considerably as well. 

[Scott Beck]

Lots of good comments from @Chris Soignier. I particularly like the idea of multiple streams of income afforded to a real estate agent who is an investor.

Why did you choose your current brokerage? Before joining did you discuss your intention to do real estate investing? Maybe you need to find a brokerage that fits your needs. Have you considered working with one of the major wholesalers in the area?

Have you found any of Mark Ferguson's posts? He also has a blog at www.Investfourmore.com that has a focus on being a successful real estate agent/investor.

[Joel Owens]

I think with clients it is defining a mutually acceptable relationship. I have a system I use that I have developed over the years with commercial real estate. Simply if a potential client cannot do basic things I ask for then I do not even start with them.

Responsiveness and communication is most important along with realistic expectations. 

[Maggie L.]

As a fellow agent and investor I feel your pain.  I've had investor clients who (half-jokingly) ask me to use a different voice when I'm answering a question as an agent versus as a fellow investor.  Needless to say, it's a bit of a tightrope.  I also work for one of the big national brokerages, which I chose because it offered more training to new agents and my particular office is number one in sales for our metro area.  For me, that means I can give better service to clients, especially listing rehabbers properties.  That said, I don't know if I'll want to stay with this brokerage in the long term.  Right now it's helpful, but some of the priorities don't fit with the type of business I want to run.  Part of that is unique to my situation.  I choose to ignore some of the opportunities in the office that won't be as helpful for me - medical issues mean I can't sit in a "class" prospecting for an hour without pain, let alone 2-3 per day for weeks.  There is also advice I take with a grain of salt because I work a lot with investors, and that's very different than most of the business in my office.

There were two thoughts that came to mind when I read your post.

1) Look for a different brokerage.  Someone a bit more focused on investors rather than the retail market may be a better fit and make you feel like you're free to spend some of your time on investing.  If you're lucky your competitive side can shift to the investor side rather than retail.

2) Shift your niche as an agent.  Start to focus more on investor-clients.  Repeat business may become more important than referrals, and it requires a different mindset.  You're be dealing with more agents who are comfortable with the low offers; it's more common in this business.  It's helped me not feel guilty making a "low ball" offer to an agent.  There's a certain amount of you do it enough for a client ("they've run the numbers and this is the offer") and you hear the responses from the listing agent...and the client taking the offer.  Might help you get over that fear of offending the other brokerage.

[Ramon Jenkins]

I feel your pain also

Heck , I spend a lot of time in car repair shops and gas expenses

Time value of money

---------------------------------------------------------------------------------------------

Especially while you view three or more properties and never receive offer to purchase

Worse part is chasing a buyers or sellers down to complete 

the basic paperwork :(

Some days I feel like I would be making more money working a part time w2 job versus being an agent

[DG H.]

Thank ALL of you for giving advice. I was almost ready to say "Im done". Reading all of your posts has given me ideas and a different view on my next step. I hope I can reach out to some of you as a sounding board. I'm also here to help with questions for anyone. I believe give to get.

My last two weeks has been spent showing a total of 15 homes to two different buyers....these were referred buyers...and we all know you do the work and don't get much cash. BOTH of these buyers have just disappeared...won't return calls, texts nor emails and the same goes for the referral agents! I don't understand this...My word is my bond..if I did something that wasn't to their liking why don't they respond to my messages?????

Also many have said to change to an investor friendly brokerage. I live in a small very rural area outside of Weatherford Texas and the brokerages are usually owned by people that have being doing this for 20+ years. There way is the only way. The big brokerage I am with isn't investor friendly it's selling as much and making as much as you can to make the stats look the best....nice people but I'm realizing it's not really what's best for me. 

Another questions: Has anyone hung their license with the online brokerage just to have access to the information so you can have all of the time you need to invest and sell and close deals as you want?

Thank all for being so nice and jtaking the time to answer my questions!

[Guy Gimenez]

@DG H.

You're going to spend a lot of time and effort because you're fishing in the retail pond. Yes, you can a find a deal here and there on the MLS, but investment grade deals more typically found off market.

[Elizabeth Colegrove]

Honestly that is why I never went the realtor way. I found that there were too many feet to step on. On the other hand by being the "uneducated" buyer with no connection using a realtor. I can focus on my investing side and not worry about the politics.

[Jay Hinrichs]

@Ramon Jenkins  do you actually drive clients to houses and show them places ?

If so ... we stopped that practice Years ago.... you meet with client one time in office or home and get them pre qualed ... 

you then set them up on top producer or what ever on line system you have that gives them e mail alerts for their target property.. we have them do the drive by's ( this eliminates the houses they don't like because of curb appeal etc) and in our market the buyers usually have all the school crime walk score etc etc done themselves ..

We then show up and only show houses they are really keen on .. rarely show more than 2 or 3 before offer is written.. and NEVER drive them in our cars. 

@DG H.  Being an agent is a huge advantage... and nothing better than pulling a 10k commission check on a deal when you have NO monetary risk compared to investments.

Plus the constant networking you get.. I built my entire career based on the clients I met in the sales end of the business... Many turned into very large investors with me.

Also as things ebe and flo in the business you can do whats hot.. Like in PDX right now and has been for about 3 years now.. Average day on market is under 30 days.. Listing agents are killing it.. Not much more proficient money than 1 hour listing appointment put in MLS another 30 minutes sit back sell in less than 30 days.. show up for home inspection ( sometimes) appraisal ( sometimes) maybe 10 to 20 hours into a listing and drop 10k in your jeans.. do that twice a month and its not a bad gig.

[Harriet Baldwin]

Many investor-realtors eventually get their broker's license so they can be a one-person shop and work (mostly, or completely) for their own account.

Spouse is a broker, when we make an offer to a listing realtor who's new to us, he does a little explaining before making the offer.  He explains what we do and that an owner occupant might offer more $, but we can close quickly and as-is.  He stipulates up front that if the buyer wants to wait for a better offer, we understand - our offers tend to expire quickly, but several times the listing agent has called us back a few months later and asked us if we're still interested in making an offer.  If it's a property that an owner occupant is going to want, we're likely not making an offer anyway.  Also, if he is making an offer for a house we are buying, he usually foregoes the buyer agent commission - makes it clear how we intend to make our money.

Our first deal in Elmira the listing agent tried to talk us out of making an offer (too low, seller would never accept).  Less than an hour later she got back to us - 'much to my surprise, the seller has accepted your offer'.  Sometimes the seller hasn't told the listing agent everything.

Tone and explaining can help, but don't be afraid to insist that the listing agent presents the offer to their seller - at least in CT and NY, an agent is required to present all offers.

On the buyers-disappearing front, many folks think they want to buy but aren't actually ready.  I would suggest interviewing them more carefully up front, laying out *your* expectations and a typical time line/activity level.  That way if the buyers aren't serious, you can adjust your investment of time more quickly.

[DG H.]

In small town Texas we don't prequalify them before we show them property. Brokers say unless you prequal everyone it's profiling and they don't want to take the chance they might make someone mad and they will go to another Brokerage. We have the buyers follow in their cars sometime and sometime we drive them. In my area it's slow...oil is down..many out of work so it's a buyers market. It's common place to show 5-6 properties in a DAY to a buyer and then not have an offer....also those buyers will then jump you and go with another agent. It's not pretty business now in rural Texas. The deals are great with Buyers that have money. Investing is cautious because of so many without jobs and moving to work leaves many rentals not full and older neighborhoods with many homes on the market. 

BUT if you are looking for investing in rural Texas  in rentals and can hold out moneywise until things turn around you can pick up some good deals.

[Jay Hinrichs]

@DG H.  OK thats a completely different slant I was thinking you were in DFW.

In our market NO one does not re qual ... your wasting time.. its not mandatory of course but only a very soft agent would not re qual a buyer. No listing agent will recommend their seller accept an offer without a strong prequel.. so its a waste of time to show property.

For what its worth.. I started my career in a rural area of Northern CA.

and the economy in the late 70s was generally as you describe it.. I learned very quick that trying to sell SFR's was going to be tough.

So I don't know if this will work in your area.

But I specialized in AG and Land... And I only sold properties that the owners would finance with 10 to 20% down and carry paper.. I would take half the down payment and half the monthly payment until my commission was paid.. and because the market was slow and frankly I was pretty good at what I did I charged anywhere from 10 to 25% commissions...depending.. the 25% were for very rural properties that sometime took me 1 to 2 years to sell.. price points were 20k to 500k.  I was my own broker and doubled ended virtually every deal I did.

I have to assume Texas has a lot of land ,,, lots of AG and ranches etc. you may want to check in with a Ranch specialist or land specialist and see whats up. 

Taking the monthly payments in lui of cash up front was one of my most brilliant moves I think I ever made ( humbly speaking) sellers liked that I was invested in the deal.. and I could sell a property for 10% down and the seller still got cash and after 18 months or so of this I had a very nice residual income coming in.. My sellers never stiffed me on my monthly payments .. they were grateful that I sold the property in the first place.. most had had the properties listed with SFR agents for a long time before they found me.. I also generally got at least what my commission was more for the property than a non specialist could do.. I never MLS listed anything ..

so in your area also it may be best to be a low balling investor after all... 

[Ramon Jenkins]

Actually the clients drive their own cars, but I need to work out a better 

system so my transportation is not being utilities in a wasteful manner. 

I would agree Jay that I definitely need to improve my buyer agent systems.

[Jay Hinrichs]

@Ramon Jenkins  PDX has a pretty switched on buying public.. the average clients know more about the area and houses than we do many times.. they get it all on line and are very detailed in their desires.. 

[Ramon Jenkins]

okay

[Ryland Taniguchi]

Originally posted by @DG H.:

I've been an Real Estate Investor for 10+ years...I've had my Realtor License for 2 years. I'm always wearing two hats and sometimes they get confused. Since I've had my license I haven't bought a property for myself. I thought I would make a little more money being a realtor while I invested but this Realtor gig has taken on a life of it's own. I'm a Realtor with a Big National Company and they expect everyone to list, sell, close and repeat. I have to admit I'm very competive and it's not a good thing  since I spend more time being a Realtor than an investor. Everytime I start to offer on a property for myself...the listing agent says my seller won't take that! Before I was a Realtor I didn't care I offered anyway and sometimes I got the deal and sometimes I didn't. Now it's like I can't offer since I will offend another Brokerage. 

I need some input from others that have had the same problems with the investor-realtor life. Frankly I really make more money with less work being an investor but its not a steady money machine. As a Realtor I'm working non-stop and have money coming in more frequent but it's more frustrating since I work for nothing when clients don't buy, can't buy or just disappear. 

Thanks for listening...It's been a frustrating 2 weeks. 

 Realtors have a different mindset than investors. If you want to focus on investing, I would focus on investing and find a great realtor to your team to handle your clients. I left Keller Williams a couple of months ago and although a great company felt they were not in alignment with investors.

[Jonna Weber]

Originally posted by @DG H.:

In small town Texas we don't prequalify them before we show them property. Brokers say unless you prequal everyone it's profiling and they don't want to take the chance they might make someone mad and they will go to another Brokerage. 

I don't think it matters what type of market you are in...always get a client pre-approved before taking them to the inside of homes.  I let new clients know that I would be doing a disservice to them if I let them fall in love with a home that they were not able to purchase.  Same with investors.  It is definitely not a matter of profiling, it is a matter of seeing if they are actual clients or not.  

[Joel Owens]

I think of it this way in commercial real estate.

If I have 10 leads come in and a function of my success is how well I screen for clients.

Potential clients that do not meet basic requirements it's a NO GO. I have had people fill out my PFS ( personal financial statement ) that are worth 8 figures with no issues and say  ( What's next? ). I have had others with much less net worth complain for 2 weeks on why do I need this or that etc.?

They contact me and I tell them the process. If they can't follow basic requests then they will not be timely when we find a property and go under contract on something. It takes a lot of time to buy a commercial property. It is not like buying a house. You are talking millions to tens of millions of dollars  and lenders will cross every I and dot every T because if that loan goes south that is a huge deal compared to a 200k house.

So you have to trust the process. If someone calls me but wants to run their own ship with little to no experience in this asset class then they are delusional. I have built a reputation of having serious, screened buyers that can perform and are committed to the process. When I talk with a seller directly or a listing broker with an off market property and put my rep out there the buyer better come through. I am not willing to risk that on a flaky buyer.

Some are more private with data and I can have my commercial lender review. I am not asking for account numbers and tax returns but a general assessment of where they are at and where they want to go. I ask the hard questions because I do not want problems later.  

It often amazes me that buyers want you to TRUST THEM with nothing to back up what they are saying. Private or not there are certain expectations of disclosure to do a deal.