Connecting with Agents that own Buy and Hold properties

[Shawn Mcenteer]

Curious to hear what realtors thinks....  As a realtor that owns buy and hold properties do you market to your tenants, try to convert them to future buying clients?

[Matt Nico]

Originally posted by @Shawn Mcenteer:

Curious to hear what realtors thinks....  As a realtor that owns buy and hold properties do you market to your tenants, try to convert them to future buying clients?

Shawn,

I own properties and have a couple dozen tenants. I allow them to "buy from me, break the lease for free" but no tenant of mine has ever used me as their agent as of this writing. This is mostly because none of them are ready to buy a house yet.

Most renters seem to be habitual renters, so I wouldn't expect a lot of business from this anyway, but I offer it to anyone who needs it to make ending their lease much easier.

[Bruce Lynn]

I think this is a delicate balance.  I personally never market to tenants in properties that I sold to investors.   Allowed, but I would not feel good if an agent that sold me an investment property and put a tenant in it, is now trying to get that tenant to buy a house.  I never want my investor clients to feel like I am working against them.   I would also never buy a house out from under them.  You hear that from investors all the time, why would my agent send me a good house to buy and not keep it for themselves?   (Can't buy them all right.)   I want my investor clients to feel great about their purchases and investments and buy 1 a year for their lifetime.

Now on the flip side, if I put a tenant in someone else's property I don't know...then sure...I am doing my best to get them out in a year or two.   People in my office laugh at me for handling leases.   Typically I make no money on the tenant side helping them get in a rental, but I think about 80pct of the time I will end up selling them a house.  I know what rent they are paying, I have an idea of their financial status, etc.   So if they will be here long term, I start getting them ready six months later, get the preapproval, start online search, etc and pick up the pace about 3 months out.   When I know they bought, then I'm after the landlord to list their rental with me or sell the house, so I'm after all sides of the transaction.  Less successful on that side since I don't have a relationship with the landlord, but I know all the dates, etc so I try.

My market or clientele is probably a little different than some areas.  Are rents are high and mostly I work with professional type tenants...so often they're just renting to get a feel for the area, commute times, time to sell their house in the transfer city, things like that.   If they're on a 2-3 year rotation and don't want to buy here, then I want their referral to the next city where they transfer, so working that service for them and revenue stream for me as well.   That's just the way I think....and also want to service a few people who call and need assistance up front finding a rental, even though normally at best I'm break even on the rental commission or even loose a bit of money.   I also explain how it all works up front...and ask them if they are happy with my service and knowledge during the rental process to come back to me when they are ready to buy.

[Nathan Gesner]

I'm a property manager with about 400 rentals under management, 25 of them are my own. I don't "market" to the renters regularly but I do talk to them about ownership if they express interest. If they choose to buy, why send them to someone else? I know them better and can make it a smooth transition for all parties concerned. If they buy through someone else, it's far more likely to cause problems.

[Sean McDonnell]

I like to keep a wall up where I never communicate with my tenants. My wife and I learned quickly that we are not good at managing our own rentals because we let emotions get involved to much. 

Our property manager handles all the communication with our tenants and I am very happy with that. Maybe as an agent, I am missing out on a few potential buyer clients but that is ok with me.

[Steve K.]

@Shawn Mcenteer I don’t market to them or try to convert them to buyer clients necessarily, but I do have a clause in my lease that states if they want to buy a home, and use me as their agent, they can terminate their lease early. The topic often comes up during lease renewals when we discuss how long they’re planning on staying. I’m happy to provide info on the local market and talk about how they can become a home owner themselves (most don’t realize they’re eligible to buy/that 3.5% down is a thing, so it’s rewarding to see them light up at the prospect of being a home owner). I’m actually working with 2 existing tenants now who are looking to purchase in the next year. These tenants are in a Class A rental. Most of my Class B and C rentals don’t have a tenant base that would be able to qualify for a mortgage just yet.

[Shawn Mcenteer]

@Steve K. that makes sense.  Getting into a rental in my market is in some case more then a down payment. 

[Shawn Mcenteer]

@Matt Nico I hear you man, thanks for the input.  What market are in?

[Matt Nico]

@Shawn Mcenteer

Disney World area in Florida.