How can a Financial Planner serve Realtors?

Question

Good mornin' folks,

I am currently a financial planner in the DFW area researching the financial needs of real estate professionals. Below are some of my questions:

• As a real estate professional, how could an a financial planner best serve you personally? 
• How could a financial planner serve your business? 
• Have you heard of/been apart of any successful referral agreement(s) with a financial planner? 
• What would be the best way to get in front of successful real estate professionals? Below is what I've gathered from my research thus far:

Before reaching out to professionals in my area, I want to ensure that I am the best person to fit their needs. Thank you in advance for your thoughts!

James Orr · Answer

@Jacob Mallison... I am a full time real estate agent that works primarily with real estate investors. I do about 40 transactions a year and about 35 of them are probably with investors and most of those are probably investors buying properties like single family homes or multi-family residential in Fort Collins, Loveland, Windsor and Greeley Colorado.

> I am currently a financial planner in the DFW area researching the financial needs of real estate professionals.

Excellent.

> Below are some of my questions:

> As a real estate professional, how could an a financial planner best serve you personally?

If you're asking how they can serve me in the capacity as a financial planner, then they need to be able to model real estate investments like they do stocks and use real estate investments in their financial plans. Doing monte carlo for stocks, but just listing my real estate in my assets column and mortgages in my liabilities column without doing monte carlo modeling of my real estate holdings is not enough. I have particular strong feelings about this, but I may be the exception.

The insurance and annuities side of your business will be a very distant next area of importance for me, but for a younger person that needs to provide for a young family without other assets this might be a little higher on the list for them.

There is a financial planner in my local market that will also shop insurance providers (including car, home, health and rentals) to find the best value on insurance as part of their service for their clients. So, that could be something you'd offer to your clients as well to add value. I think this is a helpful service especially for investors with a number of properties since it can significantly improve cash flow for them.

> How could a financial planner serve your business?

Maybe, you could help with insurance for the business, but my guess is that most real estate agents are independent contractors and do not have large businesses. There are some with employees and teams, but I think they're a small percentage of all real estate brokers.

> Have you heard of/been apart of any successful referral agreement(s) with a financial planner?

Yes. I have financial planners refer people looking to buy and sell properties to me. They also refer people to my investment classes. I also refer people who are looking for a financial planners to them. There is no exchange of fees for these referrals. I am not allowed to pay a referral fee unless they have a real estate license and I'm not sure I'd refer to them if they had a real estate license. Not sure if they're allowed to pay referral fees; I never asked nor do I expect it. I am really just trying to refer the best resources I know of to my clients to help them with what they need.

> What would be the best way to get in front of successful real estate professionals?

I suspect this will vary quite a bit depending on who it is. For me, I keep lunch spots open to meet with people wanting to do business with me including potential clients, mortgage brokers, title reps, insurance agents and financial planners. I suspect this may vary from person to person, but my experience has been that real estate brokers tend to be upstream of a lot of business so the folks that are downstream tend to want to meet with producing real estate agents to see if they can be on the receiving end of the down stream business. If you were local to me, you could attend a class I teach or reach out via email and ask to grab lunch to discuss how we might do some business together. I suspect there are others that prefer to talk on the phone, but cold calling me would be a turn off and I rarely answer my phone if it is a number I don't already know. I am probably unusual in this regard. I'd rather you email or, even better, come up to me after a class I teach. That's my preferred way of meeting new people. Sometimes people will get creative and leverage someone I already know to meet me like inviting me to play golf or going to an event and meeting their colleague or friend. I am an introvert (despite the rumors to the contrary) and this is not my preferred method of meeting people.

When they do approach me about getting together, I probably feel a little better if they phrase it as, "I want to know more about what kinds of clients I should refer to you" and of course we'd also discuss what their specialty and areas of expertise are and clients would be good referrals for them at that meeting as well. If they start off the conversation all about themselves and what the want or what they can do, it is a little bit of a turn off for me. Not a deal killer, but I do notice it.

> Below is what I've gathered from my research thus far:

> Before reaching out to professionals in my area, I want to ensure that I am the best person to fit their needs. Thank you in advance for your thoughts!

I would imagine this would incredibly difficult to discover so not sure how you're doing that. I doubt someone could determine what my needs are without meeting with me.

I do prefer to have referral partners that have specialties that I can refer people with that specific need to them.

So, if I know a financial planner does fixed-price financial plans for high net worth individuals and a client asks me about that, they'd get that referral. If a financial planner does AUM for working class folks and I have a client that wants that, I'm more likely to refer for that. It is extremely uncommon for someone to tell me they have a life insurance need.

Since I know that I have specialties in real estate and not everyone is a perfect fit client for me, I strongly believe that is true for financial planners (and other referral partners) as well. When newer people to an industry come to me and give me a very general, "I can do everything from A-Z" pitch over lunch, they almost never get referrals from me because they're just like 12 other people that told me the same thing. The ones that get referrals are the ones that have a niche and own that niche... they get referrals because they are THE PERSON, THE EXPERT, THE SPECIALIST that handles this and does an amazing job at it. I want to look good to the people I am referring to my referral partners. I want to know that the person I am referring them to know specializes in and is an expert in that particular area.

In my market, I am the Investor's REALTOR. I don't do luxury homes, I don't do BPOs, I don't focus on fix and flips, I don't market to first time home buyers, I don't focus on sellers wanting to sell a home. Do I occasionally help an investor buy a luxury home to live in themselves... sure, but it is because I am an expert at the investment stuff and they want to continue working with me to buy their personal home. Do I get first time home buyers that are new investors and want to get started buying their own home first... sure, but I not telling referral partners that is who they should refer. Do I work with people wanting to sell a home... sure, but I don't tell referral people that's who I want them to refer. I tell people I meet with that if they have someone looking to buy investment rental real estate, I specialize in that. I am an expert at that. No one is better at that than me in my market. I teach about 50 different classes a year to help people do that, I have checklists and processes that specialize in that, I write books to help people with that and so. I own that niche. I get other business, but I consider that my domain.

Sorry about the rant toward the end... but I hope that helps you with the way I think about this stuff. And, as I mentioned, I am sure there are a number of differing opinions from others on this as well.

Charlie MacPherson · Answer

@Jacob Mallison I'd say the best thing you could do for a Realtor is to provide leads for your clients that want to transact real estate.

We're always looking for leads - especially those from referrals.

You might not know this, but in most, if not all states, it is illegal for a real estate licensee to pay any kind of referral fee, finder's fee, etc to an unlicensed person.

That said, if you want to find a good agent, look for someone who is full time and hungry.