As we are in a curious time in the market and with all sorts of litigation floating around the industry, I have a question for investors. How can Real Estate Agents like myself bring you value? What is important to you in our working relationship? How can I help You?!
@Dru Hill I've worked with some highly experienced agents (and I've also encountered plenty of agents who had no clue what they were doing).
My primary agent is in the top 1% of volume and expertise, and he's made himself into a key part of my operation over the years, so I'm happy to keep bringing him business.
So, what makes an agent great?
An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.
Aside from investing experience, a really great agent can do two things really well that most agents can't (or won't) do: 1) they facilitate an extremely strong due diligence process, and 2) they see opportunities that other agents and buyers miss.
I'll give you a real example of each:
First, an example of an agent going all-in on due diligence, which saved me a ton of cash and headache, and ultimately secured the agent millions of dollars' worth of future business.
Years ago, when I was a completely inexperienced aspiring investor, looking for my first property, I found my "dream house". I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs, and looking at the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out).
I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish much of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $50k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $50k (which could have bankrupted me at the time) and a massive headache.
A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem.
That's the value of an agent who goes hard in the paint on due diligence.
Importantly, this agent's willingness to walk away from a commission in order to protect me showed me that he was trustworthy and would put my interests above his own. At that time, this agent did not know me at all (we had spoken twice). He was a top-grossing agent, but I was just a kid with virtually no money and no experience. He had zero reason to expect that I would ever buy another property with him. His willingness to sacrifice for me proved that he was the real deal--which is why I went back to him again and again over the years as I bought more properties.
As the years passed and we did more deals, I learned that this agent understood how to inspect properties more thoroughly than many home inspectors! Fast forward to today, and that agent is a key player on my team--I never buy or sell a property without him. He has saved me hundreds of thousands of dollars over the years because of his thorough due diligence, and we've transacted millions of dollars' worth of real estate.
Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". Specifically, some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (including the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. A grand slam.
It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues.
Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!
We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!
To sum this up, a rockstar agent understands how to save their client money (and headache) by going above and beyond with an extremely thorough due diligence process, and they understand how to make their client money by finding value-add opportunities that everyone else misses.Note that many (perhaps most) agents don't do either of these things. Most agents think to themselves "inspecting the property is the property inspector's job" or "figuring out the rehab budget is the GC's job"...I don't work with those agents.
Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!
Even though I'm no longer an inexperienced investor, I still work with my buyer's agent--because the money he helps me save and make is far more than his commission (an ROI that most other agents can't or won't produce).
Good luck out there!
As we are in a curious time in the market and with all sorts of litigation floating around the industry, I have a question for investors. How can Real Estate Agents like myself bring you value? What is important to you in our working relationship? How can I help You?!
Hi Dru,
Always tell the truth. Inform clients of the ramifications of their decisions. Be as presient as possible for your clients. Don't ghost people during communications. If you focus on your customers the $ will follow, if you focus on $ clients will notice.
Buzz words and catch phrases like "can you picture yourself bla bla" & really don't help your sales.
Sorry if I sound rude, not intentional
Very best to you
@Dru Hill I've worked with some highly experienced agents (and I've also encountered plenty of agents who had no clue what they were doing).
My primary agent is in the top 1% of volume and expertise, and he's made himself into a key part of my operation over the years, so I'm happy to keep bringing him business.
So, what makes an agent great?
An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.
Aside from investing experience, a really great agent can do two things really well that most agents can't (or won't) do: 1) they facilitate an extremely strong due diligence process, and 2) they see opportunities that other agents and buyers miss.
I'll give you a real example of each:
First, an example of an agent going all-in on due diligence, which saved me a ton of cash and headache, and ultimately secured the agent millions of dollars' worth of future business.
Years ago, when I was a completely inexperienced aspiring investor, looking for my first property, I found my "dream house". I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs, and looking at the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out).
I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish much of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $50k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $50k (which could have bankrupted me at the time) and a massive headache.
A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem.
That's the value of an agent who goes hard in the paint on due diligence.
Importantly, this agent's willingness to walk away from a commission in order to protect me showed me that he was trustworthy and would put my interests above his own. At that time, this agent did not know me at all (we had spoken twice). He was a top-grossing agent, but I was just a kid with virtually no money and no experience. He had zero reason to expect that I would ever buy another property with him. His willingness to sacrifice for me proved that he was the real deal--which is why I went back to him again and again over the years as I bought more properties.
As the years passed and we did more deals, I learned that this agent understood how to inspect properties more thoroughly than many home inspectors! Fast forward to today, and that agent is a key player on my team--I never buy or sell a property without him. He has saved me hundreds of thousands of dollars over the years because of his thorough due diligence, and we've transacted millions of dollars' worth of real estate.
Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". Specifically, some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (including the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. A grand slam.
It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues.
Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!
We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!
To sum this up, a rockstar agent understands how to save their client money (and headache) by going above and beyond with an extremely thorough due diligence process, and they understand how to make their client money by finding value-add opportunities that everyone else misses.Note that many (perhaps most) agents don't do either of these things. Most agents think to themselves "inspecting the property is the property inspector's job" or "figuring out the rehab budget is the GC's job"...I don't work with those agents.
Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!
Even though I'm no longer an inexperienced investor, I still work with my buyer's agent--because the money he helps me save and make is far more than his commission (an ROI that most other agents can't or won't produce).
Good luck out there!
@Dru Hill I've worked with some highly experienced agents (and I've also encountered plenty of agents who had no clue what they were doing).
My primary agent is in the top 1% of volume and expertise, and he's made himself into a key part of my operation over the years, so I'm happy to keep bringing him business.
So, what makes an agent great?
An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.
Aside from investing experience, a really great agent can do two things really well that most agents can't (or won't) do: 1) they facilitate an extremely strong due diligence process, and 2) they see opportunities that other agents and buyers miss.
I'll give you a real example of each:
First, an example of an agent going all-in on due diligence, which saved me a ton of cash and headache, and ultimately secured the agent millions of dollars' worth of future business.
Years ago, when I was a completely inexperienced aspiring investor, looking for my first property, I found my "dream house". I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs, and looking at the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out).
I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish much of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $50k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $50k (which could have bankrupted me at the time) and a massive headache.
A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem.
That's the value of an agent who goes hard in the paint on due diligence.
Importantly, this agent's willingness to walk away from a commission in order to protect me showed me that he was trustworthy and would put my interests above his own. At that time, this agent did not know me at all (we had spoken twice). He was a top-grossing agent, but I was just a kid with virtually no money and no experience. He had zero reason to expect that I would ever buy another property with him. His willingness to sacrifice for me proved that he was the real deal--which is why I went back to him again and again over the years as I bought more properties.
As the years passed and we did more deals, I learned that this agent understood how to inspect properties more thoroughly than many home inspectors! Fast forward to today, and that agent is a key player on my team--I never buy or sell a property without him. He has saved me hundreds of thousands of dollars over the years because of his thorough due diligence, and we've transacted millions of dollars' worth of real estate.
Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". Specifically, some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (including the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. A grand slam.
It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues.
Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!
We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!
To sum this up, a rockstar agent understands how to save their client money (and headache) by going above and beyond with an extremely thorough due diligence process, and they understand how to make their client money by finding value-add opportunities that everyone else misses.Note that many (perhaps most) agents don't do either of these things. Most agents think to themselves "inspecting the property is the property inspector's job" or "figuring out the rehab budget is the GC's job"...I don't work with those agents.
Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!
Even though I'm no longer an inexperienced investor, I still work with my buyer's agent--because the money he helps me save and make is far more than his commission (an ROI that most other agents can't or won't produce).
Good luck out there!
Wow that's great! Very few are like that. 11 years in had taught me Realtors are merely a transactional fleeting relationship. Trust but verify is my motto.
That being said I don't blame them for not being investor friendly. Selling a $1.5 house to a retail buyer is better than 2-3 $500k flips a year. FSBO is better for me.
@Dru Hill I've worked with some highly experienced agents (and I've also encountered plenty of agents who had no clue what they were doing).
My primary agent is in the top 1% of volume and expertise, and he's made himself into a key part of my operation over the years, so I'm happy to keep bringing him business.
So, what makes an agent great?
An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.
Aside from investing experience, a really great agent can do two things really well that most agents can't (or won't) do: 1) they facilitate an extremely strong due diligence process, and 2) they see opportunities that other agents and buyers miss.
I'll give you a real example of each:
First, an example of an agent going all-in on due diligence, which saved me a ton of cash and headache, and ultimately secured the agent millions of dollars' worth of future business.
Years ago, when I was a completely inexperienced aspiring investor, looking for my first property, I found my "dream house". I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs, and looking at the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out).
I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish much of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $50k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $50k (which could have bankrupted me at the time) and a massive headache.
A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem.
That's the value of an agent who goes hard in the paint on due diligence.
Importantly, this agent's willingness to walk away from a commission in order to protect me showed me that he was trustworthy and would put my interests above his own. At that time, this agent did not know me at all (we had spoken twice). He was a top-grossing agent, but I was just a kid with virtually no money and no experience. He had zero reason to expect that I would ever buy another property with him. His willingness to sacrifice for me proved that he was the real deal--which is why I went back to him again and again over the years as I bought more properties.
As the years passed and we did more deals, I learned that this agent understood how to inspect properties more thoroughly than many home inspectors! Fast forward to today, and that agent is a key player on my team--I never buy or sell a property without him. He has saved me hundreds of thousands of dollars over the years because of his thorough due diligence, and we've transacted millions of dollars' worth of real estate.
Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". Specifically, some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (including the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. A grand slam.
It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues.
Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!
We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!
To sum this up, a rockstar agent understands how to save their client money (and headache) by going above and beyond with an extremely thorough due diligence process, and they understand how to make their client money by finding value-add opportunities that everyone else misses.Note that many (perhaps most) agents don't do either of these things. Most agents think to themselves "inspecting the property is the property inspector's job" or "figuring out the rehab budget is the GC's job"...I don't work with those agents.
Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!
Even though I'm no longer an inexperienced investor, I still work with my buyer's agent--because the money he helps me save and make is far more than his commission (an ROI that most other agents can't or won't produce).
Good luck out there!
I really appreciate you taking the time to type that out. I pride myself on being an investment focused real estate agent. Which doesn’t mean I solely work with “Investors” but rather I want all of my clients to view their real estate purchase thru an investment lense. Definitely opportunity for me to do a little more from a due diligence perspective in addition encouraging the buyer to research and provide them with resources. Thanks so much.
@Dru Hill I've worked with some highly experienced agents (and I've also encountered plenty of agents who had no clue what they were doing).
My primary agent is in the top 1% of volume and expertise, and he's made himself into a key part of my operation over the years, so I'm happy to keep bringing him business.
So, what makes an agent great?
An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.
Aside from investing experience, a really great agent can do two things really well that most agents can't (or won't) do: 1) they facilitate an extremely strong due diligence process, and 2) they see opportunities that other agents and buyers miss.
I'll give you a real example of each:
First, an example of an agent going all-in on due diligence, which saved me a ton of cash and headache, and ultimately secured the agent millions of dollars' worth of future business.
Years ago, when I was a completely inexperienced aspiring investor, looking for my first property, I found my "dream house". I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs, and looking at the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out).
I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish much of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $50k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $50k (which could have bankrupted me at the time) and a massive headache.
A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem.
That's the value of an agent who goes hard in the paint on due diligence.
Importantly, this agent's willingness to walk away from a commission in order to protect me showed me that he was trustworthy and would put my interests above his own. At that time, this agent did not know me at all (we had spoken twice). He was a top-grossing agent, but I was just a kid with virtually no money and no experience. He had zero reason to expect that I would ever buy another property with him. His willingness to sacrifice for me proved that he was the real deal--which is why I went back to him again and again over the years as I bought more properties.
As the years passed and we did more deals, I learned that this agent understood how to inspect properties more thoroughly than many home inspectors! Fast forward to today, and that agent is a key player on my team--I never buy or sell a property without him. He has saved me hundreds of thousands of dollars over the years because of his thorough due diligence, and we've transacted millions of dollars' worth of real estate.
Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". Specifically, some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (including the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. A grand slam.
It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues.
Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!
We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!
To sum this up, a rockstar agent understands how to save their client money (and headache) by going above and beyond with an extremely thorough due diligence process, and they understand how to make their client money by finding value-add opportunities that everyone else misses.Note that many (perhaps most) agents don't do either of these things. Most agents think to themselves "inspecting the property is the property inspector's job" or "figuring out the rehab budget is the GC's job"...I don't work with those agents.
Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!
Even though I'm no longer an inexperienced investor, I still work with my buyer's agent--because the money he helps me save and make is far more than his commission (an ROI that most other agents can't or won't produce).
Good luck out there!
Wow that's great! Very few are like that. 11 years in had taught me Realtors are merely a transactional fleeting relationship. Trust but verify is my motto.
That being said I don't blame them for not being investor friendly. Selling a $1.5 house to a retail buyer is better than 2-3 $500k flips a year. FSBO is better for me.
In theory, yes. But for me, that retail buyer is going to buy that house and then maybe sell it in 5+ years and maybe remember that I exist, but the investors may operate at a lower price point but if I flip, I can potentially work both ends with them. Even if I don’t, theres not a lot of emotion involved so I know I basically just need to math to work for an investor to buy vs making sure the home is facing the right direction.
As we are in a curious time in the market and with all sorts of litigation floating around the industry, I have a question for investors. How can Real Estate Agents like myself bring you value? What is important to you in our working relationship? How can I help You?!
Very important. I ALWAYS answer my phone. Even when it says “Likely spam”.
There is only one thing needed and that profitable deal flow...lots of it.
1) Be honest
2) Answer the phone or text/email promptly
3) Listen
4) Do what is asked (within reason) by your client
I just refused to re-sign with an Agent who had a nice listing for 6 months. She is really nice and did pretty good, but little stuff like being asked to 'please feature this aspect of the house for me'...or, 'please add some more pics of ____', or, 'could you please change the verbiage a little'...
Easy stuff right? Apparently not....
I deal with lots of agents, most of them are very good. A couple I struggle with. They are all in it for the money, and I understand that. I just let them always know when they get too cute with me that their fiduciary responsibility to me needs to not be at risk. The biggest things I appreciate:
1) Agility
2) Quick communication
3) A great team. Okay, you may be tied up and can't see this house. Your team should be able to.
4) Don't send me just an automated list. You know the area better than me, let's pinpoint where to go based off my buying criteria.
5) Don't be offended when I don't take your recommendations for PM, inspector, etc. I never do.
6) Excellent pulse of the market. Your subject matter expertise is critical.
7) I am not looking for your opinion on anything outside of the local market. Risk management, capital deployment, etc. Keep that **** to yourself.
8) Treat everybody equally. You have no idea who is who.
I have two agents that insist on having a phone call to prep my offers, then a phone call to show the offers. I just don't have time for that ****. I have another agent that adds her suggestions and follows through with it on the offer, I've warned her against doing that. All of these agents have excellent SME though in the local market. They may have a terrible pulse on way things are moving, etc., but I take their local knowledge and work around it. You're not going to find a perfect agent though.
It takes lot of hard work to work with an investor. Most of the Agents treats investors just like regular buyers. The difference between a retail buyer and in investor is the buyers buy on emotion and investors buy on numbers. Buyers need a dream house, investors need a profitable house.
As a Realtor, you need to know the numbers to work with an investor, like actual ARV, marketing conditions present and future(in 6- 12 months when that property ready to sell after reno), average reno cost etc.....
Do not tell the investors that there are other offers on the property and if you don't buy it today you will loose it (if the numbers wont work). If an agent tell me that, I know that agent is not an investor friendly agent.
Investors are very busy. I have some agent put me on auto prospect list feed. I cut them off right of way or will not talk to them. Prospect match emails are for buyers not for investors.
If you have good five investors, and if you feed them with good properties, your life is set. It takes time and dedication long working hours to find good properties for investors. You need to find off-market properties, cant just depend on MLS.
Good Luck
As we are in a curious time in the market and with all sorts of litigation floating around the industry, I have a question for investors. How can Real Estate Agents like myself bring you value? What is important to you in our working relationship? How can I help You?!
When we are screening agents for out-of-town investments we are primarily concerned with the following:
1. Does an agent have relationships with local lenders
2. Does the agent have a network of contractors, handymen and/or property management
3. Can the agent bring us off market deals
4. Does the agent have a relationship with architects and/or attorneys
5. Is the agent diverse enough to handle residential and commercial transactions?
Most of the items above really deal with what kind of network the agent has built that our company can leverage. Which usually means that the agent is also an investor.
It takes lot of hard work to work with an investor. Most of the Agents treats investors just like regular buyers. The difference between a retail buyer and in investor is the buyers buy on emotion and investors buy on numbers. Buyers need a dream house, investors need a profitable house.
As a Realtor, you need to know the numbers to work with an investor, like actual ARV, marketing conditions present and future(in 6- 12 months when that property ready to sell after reno), average reno cost etc.....
Do not tell the investors that there are other offers on the property and if you don't buy it today you will loose it (if the numbers wont work). If an agent tell me that, I know that agent is not an investor friendly agent.
Investors are very busy. I have some agent put me on auto prospect list feed. I cut them off right of way or will not talk to them. Prospect match emails are for buyers not for investors.
If you have good five investors, and if you feed them with good properties, your life is set. It takes time and dedication long working hours to find good properties for investors. You need to find off-market properties, cant just depend on MLS.
Good Luck
@Jose Jacob @Dru Hill Another major difference between a retail client and an investor client is that a retail client might only buy/sell one or two properties in their entire LIFETIME.
A legit investor might be buying/selling one or two properties every 12 months (or more!).
Do I, as an investor, have higher expectations of my agent than a retail client? Yes. Does my agent have to work harder for me than a retail client? Yes. Do I bring my agent 100x more business than a retail client? Absolutely.
My agent makes more in commissions working with me for 12-24 months than he'll make working with a retail client for their entire lives--that's why my agent moves heaven and earth to make sure he's a key player in my operation.
If you're an agent, and you can find legit investors and make yourself indispensable to them, deal flow won't be a problem.