Investor Friendly Realtor-what does this really mean?

OP

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

10y

Originally posted by @Joe Villeneuve:

Let me start out by saying that in many cases you may have to train the REA to be investor friendly. Here is my list for an investor friendly REA:

1 - Must not question any offer I make by stating it's too low.

2 - Must make my offers with the understanding that I will not be doing an inspection until AFTER I get my offer accepted

3 - Must be HUD certified.

Thanks Joe.

So #1-that's a good one and today my offer wasn't questioned as too low. I just wanted to get a back up comp, per se, to see what was in the area that might clue me in where my offer lay. I figure that when the bank does the appraisal it'll tell the tale.

#2-and what has happened that you stipulate this. Generally aren't inspections done after the offer? That has been my experience.

#3-Haven't gone that route yet but I'm sure when I do I'll need to make sure they are.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Daria B. what price point are you looking at.. this will have a bearing on the agents you work with or are willing to work with investors. just like you have crappy wholesalers and realtors you have crappy investors who waste untold amounts of your time and never buy anything. so its a fine line there. Realtors sell their time they do not punch a clock. so what an investor expects and what the compensation is going to be for that effort will determine the quality of the agent and the amount of time an agent wants to spend with you.

Two sides of the coin. the really good OREO agents will have the great deals but they also have their great buyers who ask them to do NOTHING for them other than write the contract its the investor who should know what rents are and what values are if your relying on the agent your not versed enough in what your doing.. Great OREO agents will just pass you by and Sell to @Joe Villeneuve who is a professional buyer and does not need to be driven around asked what rents are or what values are.

now if your buying 1 property a year and its 500 to 1 million that's another story of course

anyway another perspective on the beat down agents take on BP.

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David Roberts

Brownstown, MI · Member since 2014 · 344 posts · 98 votes

10y

When joe said without an inspection, he means he looks at listing pictures and makes his offer. If its accepted, he will them go to the property himself and do his Walkthru. If he doesn't like it he will back out before the inspection period ends.

Joe is experienced so its not worth his time to get out of his chair until an offer is accepted. Those guys have been in enough houses to know what its going to look and smell like before they ever get there.

OP

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

10y

Originally posted by @Jay Hinrichs:

@Daria B. what price point are you looking at.. this will have a bearing on the agents you work with or are willing to work with investors. just like you have crappy wholesalers and realtors you have crappy investors who waste untold amounts of your time and never buy anything. so its a fine line there. Realtors sell their time they do not punch a clock. so what an investor expects and what the compensation is going to be for that effort will determine the quality of the agent and the amount of time an agent wants to spend with you.

Two sides of the coin. the really good OREO agents will have the great deals but they also have their great buyers who ask them to do NOTHING for them other than write the contract its the investor who should know what rents are and what values are if your relying on the agent your not versed enough in what your doing.. Great OREO agents will just pass you by and Sell to @Joe Villeneuve who is a professional buyer and does not need to be driven around asked what rents are or what values are.

now if your buying 1 property a year and its 500 to 1 million that's another story of course

anyway another perspective on the beat down agents take on BP.

Thanks Jay. I get your point.

While I have become more versed and feel confident in my evaluations on getting to the price points, the rent still eludes me on my figuring, which if not determined correctly can destroy the whole deal. If I can't rent it out at x amount and can't cover all expenses to make a profit..... oh well I'm toast.

And you are point on with the do nothing and just write contracts. I saw that today as that was the exact experience.

Zach Davis

Investor · Portland, OR · Member since 2013 · 143 posts · 105 votes

10y

I told the realtors and loan broker I work with these 5 things up front.

1. I work long hours at my day job and run my REI business on nights and weekends, that means you do to.

2. You will likely have more negotiations while representing me than with the average couple buying a home because of an emotional response. It either makes money or not and in order for it to make money it has to be below market.

3. I buy rehab properties. You will likely have to show properties that are not very nice to look at or smell and are probably occupied by unsavory individuals. And you will likely have to negotiate with the slumlord that let it get that way.

4. You might have to show 10, 20, or even 50 properties before finding a deal that works for me.

5. You will probably make less money per hour of labor with me, but in exchange you get repeating income from a frequent buyer.

They all told me the appreciated the warning. LOL

Just thought of 6. You might end up looking like this...

2 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Zach Davis check back in in a few months and see how many of these realtors are still with you .. Unless you have VERY deep pockets and can buy at least a deal a month.. I suspect you will burn through agents quite rapidly.

I have owned two brokerages here in PDX market so I have seen the I can buy everything investor come through the doors many times.. LOL. .I would council my agents accordingly ..

PS I am building 27 homes right now up your way on the EAST side of Gresham on Palmblad we have 12 vertical right now and 5 pre sold good time to be building homes IN the PDX metro area.. closing next week on another 24 lots out your way.

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Zach Davis

Investor · Portland, OR · Member since 2013 · 143 posts · 105 votes

10y

@Jay Hinrichs

I've actually been very fortunate to find some good ones with almost no turnover. It makes it really nice when you find someone as dedicated to their job as you are to yours and it helps when they themselves are interested in investing.

I actually saw your development out in Gresham a week or so ago. I have a buddy that lives out off of 23rd and saw them going up. Had no idea they were yours, they look like they'll be pretty nice places. I'd like to get into newer stuff eventually but for now I'm stuck in 60-70s built "sweat equity" type plexes.

[email protected]239-339-3969

Adam BartomeoBusiness Member

Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes

10y

You will see that this is a major issue on BP. Realtors, brokers and folks that were former realtors or brokers will fight to the death defending these positions. While lots of investors complain about treatment, unethical practices and lies.

I have yet to find a realtor that I can work with. I have gone through several and all have shown their true colors at some point in the transaction. My personal opionion is to get rid of these positions all together. There is too much temptation to act in an unsavory way to acheive a goal. I am sure that there are some great folks out there but they are few and far between.

My experience is that they want a commission and that drives their actions and intentions. You have to be very careful when dealing with these folks. Verify everything they tell you and never take what they say at face value.

Good luck in your search!

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David Roberts

Brownstown, MI · Member since 2014 · 344 posts · 98 votes

10y

Originally posted by @Jay Hinrichs:

@Zach Davis check back in in a few months and see how many of these realtors are still with you .. Unless you have VERY deep pockets and can buy at least a deal a month.. I suspect you will burn through agents quite rapidly.

I have owned two brokerages here in PDX market so I have seen the I can buy everything investor come through the doors many times.. LOL. .I would council my agents accordingly ..

PS I am building 27 homes right now up your way on the EAST side of Gresham on Palmblad we have 12 vertical right now and 5 pre sold good time to be building homes IN the PDX metro area.. closing next week on another 24 lots out your way.

Compound interest? I can't wait to get there. I'm able to buy 2 rentals at a time then cash out refi. Trying to get to doing 2 rentals and a flip, or 2 flips and a rental.

That's so cool

OP

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

10y

I woke this morning this morning, of course thinking of RE previous days events :), with even more clarity.

And as I read these additional posts, @Zach Davis has hit the nail directly on for #1,4, and 5. I too work a regular job trying to fit in RE during the day when I can and always after work and on weekends. I still enjoy myself though when not completely immersed in RE. If I am going to look at a property with my RE (1st that assisted with previous purchases) then I am at the signing line. Because I buy near move-in or ready-move-in-with-some-light-rehab, if the inside is in a state that I can't address at this time, I walk. Some are equipped to handle this as you are Zach because this is what you buy. So I don't call my agent with every property I see. I do a lot of work myself and when I'm ready I make that call. My 1st agent I have established a very good working relationship with although she is more of a "sales" OO, she has learned what I need and is more than willing to help. Fixer-upper will come soon enough and I will be ready but not now as my focus is not there completely. As you mentioned, it's nice when you "do" find an agent that is dedicated to their job and not just want to succeed but also help you succeed. As for the agent yesterday, I now know what that expectation is and can adjust accordingly.

@Adam Bartomeosome good points and I am very careful when dealing with anyone.

@David Roberts thanks for that explanation - makes a WHOLE lota' sense now. One day I suspect that I will be like @Joe Villeneuve and take on a property without a pre-look.

@Jay Hinrichs what is an OREO? Please don't say cookie. ;)

Thanks all for yet another illuminating conversation and education.

What I look for now is filling in the gaps of those areas that I need to build upon. Like for the rents, I know a better resource is a PM that has their finger on the pulse of the community. Rather an agent will likely just serve for comps when I need them and contract execution, unless it's FSBO.....and that's another conversation. :)

Have a great day!

Franklin Romine

Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes

10y

True investors waste little personal time and time of a good agent.

Frank

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

10y

Originally posted by @Adam Bartomeo:

You will see that this is a major issue on BP. Realtors, brokers and folks that were former realtors or brokers will fight to the death defending these positions. While lots of investors complain about treatment, unethical practices and lies.

I have yet to find a realtor that I can work with. I have gone through several and all have shown their true colors at some point in the transaction. My personal opionion is to get rid of these positions all together. There is too much temptation to act in an unsavory way to acheive a goal. I am sure that there are some great folks out there but they are few and far between.

My experience is that they want a commission and that drives their actions and intentions. You have to be very careful when dealing with these folks. Verify everything they tell you and never take what they say at face value.

Good luck in your search!

Funny, but I haven't had any problems finding agents to work with. Many are already trained as to how to work with a REI. Some you need to train, some are untrainable...their loss.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Adam Bartomeo of course commissions drive their actions. just like a flipper profits drives there actions or anyone else in the world of commerce.. you do something in the expectation of compensation.. this is not a charity .

I am buying a flip right now in cape Coral with some great AGENTS who brought it to me.

they will make commission plus profit.. you need to know how to work agents, and instead of grinding on them you reward them be surprised how well that works.. offer more than anyone else is offering and all of a sudden a guy like me can be sitting at my desk in Oregon buying a home in Cape Coral for 110k that needs 10k and will relist at 180k with expectation of full turn in 90 some days.. don't need to be a genius to know that that realtor not only is going to get the selling to me commish and the relist commish but part of the profit as well for marshaling the rehabh witch is cosmetic.. so why would this realtor not want to work with me when they can make 20k or so on one 110k deal.. So there are always two sides to the coin.. here my method and model is reward above the norm..

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Daria B. Bank term OREO = Other Real Estate Owned. sometimes shortened to just REO

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@David Roberts this RE game is very regionalized and your blessed to be in a state and market that buy and large many can enter because of the price points. ERGO you get al these west coast folks coming your way competing with you..

Just think if you had no outside ( out of area pressure on your RE) were do you think the values would then be ?

you can truly play Monopoly in those markets... and you should

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Joel OwensBusiness Member

Moderator

Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

10y

Daria,

REO - Real Estate Owned (Typically bank owned SFR properties).

OREO - Other Real Estate Owned ( Typically REO but other asset classes like commercial etc.)

Sometimes people call bank foreclosures OREO so just depends who you talk to.

I will say this about brokers and agents. I am a principal broker but also an investor myself but my focus is on commercial real estate. My days are generally spent talking to millionaires and multi millionaires about if they want to own directly or invest passively into a syndicate I am sponsoring.

I have 3 buckets.

1. My own investments directly.

2. Helping clients buy and own commercial properties directly.

3. Helping clients wanting to be passive by into a syndicate I am doing.

With each person that calls I have to make a decision on if we are going to work together or not. They have to get through my screening criteria. When you make money on sales which then fuels your investments then time is money.

It often blows me away that brokers/agents do not have set criteria for accepting another possible client into their book of business.

Some questions brokers/agents should be asking about an investor.

1. Track record?

2. Is what they are trying to achieve out there in the marketplace?

3. How much time will the one client take up to achieve a successful transaction?

4. Are they one and done or do they want a relationship and have the ability to do multiple deals a year?

There are many other questions that need to be asked.

The SFR space for houses you tend to get frankly a lot of crazy investors as well as brokers/agents. Throwing anything out there to see what sticks. In the commercial space you can still get this but less of it.

You need to tell broker/agents that you are not as experienced but do have somewhat of a track record and will need some more help and see if they are open to it or not.

I work with first time commercial buyers a lot and have to do a lot of education with them helping them understand the asset class and what it takes to buy and own such a property. For this however my commission is usually over six figures per deal.

Way different world the SFR having an agent submit 40 low ball offers to get one accepted and make 1,500 if they are lucky. Once you factor in their drive time, offer time, broker payout split, food costs, etc. they might do better working at Mcdonald's........... : )

I have SFR broker friends and they sold to investors 3 to 4 years ago when markets were frozen and cash was king. Today much less investors buying SFR and regular sales are occurring. If you were a SFR agent and 2 people approached.

1. First time home buyer with a 250k budget. 250k budget shows 200 properties that fit the bill.

2. Investor wanting to rehab and flip in an overheated market. The MLS shows 2 properties out of 600 to try and find them.

The outlook would be that with builder bonuses you might make close to 10,000 commission with one sale working with a home buyer.

The other investor buyer out of the 2 properties to bid on they receive multiple offers so the agent then has to keep searching endlessly for the investor to try to find them a one in a thousand property.

New agents have nothing to do but twiddle their thumbs. Seasoned brokers/agents with experience have a great book of business. To add to that book the potential new clients have to fit nicely into that circle.

Someone who has a ton of money but has a very demanding and draining type of personality to deal with I have no time for them. I have plenty of clients who are nice, cordial, easy to get along with, and business still gets handled and everyone works in a relationship they feel happy and valued in.

Wanted to shed some light on the broker/agent side some. As mentioned if people are selling low volume properties they want to do the MINIMUM required to affect and sale so they can do another and another. They need that volume to make it worth their while. Anyone taking too much time is actually not only costing them money on that deal but slowing down the commission train on others.

On larger type deals making really big pops a broker/agent can slow things down and give exemplary service.

Some will say they can do volume and have excellent service but things tend to fall through the cracks scaling that big.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Joel Owens very astute summation of the reason agents in certain market climates do certain things..

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Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

10y

No comment on the pitiful self promotions here, :) but, back to "investor friendly".

Ever think of being an "Realtor friendly" investor?

That would be one that doesn't waste a Realtor's time trying to get them to go along with screwy ideas, thinking only of yourself while destroying the Realtor's reputation with their peers submitting absurd low ball offers. There is nothing wrong with a low offer when it is justified, throwing out offers to see if anything sticks isn't going to be done by a successful Realtor.

"Investor friendly" on BP as used by newbies is usually asking what Realtor, title company, lawyer, appraiser or others are willing to do things that are not in the norm, some even wanting them to get into "shady" deals and don't question them. It's because the newbie (or even an older investor) doesn't really understand the role of other professionals, what they are required to do from a legal and ethical position, usually because they don't know the difference.

Those investors that do understand the requirements of other professionals in real estate have no problem working with them and using them properly and gaining their assistance. If you really don't understand the depth of the relationship, you'll never get optimum performance from others. :)

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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

10y

As an agent I do work with investors, and a lot more so than most of my colleagues....but I wouldnt work with the the type of investor that is throwing 50 offers out there. That is fine if that is their strategy, but I think those individuals just need to get their own license to operate that way. When I write up an offer, it takes me a couple of hours to put it altogether due to he absurd lengths of our contracts. I am insanely busy working with reasonable clients, there is no way I could spend the time writing up dozens of contracts.

Also when I write an offer for someone....the intent is that we acquire the property. If the price is unrealistic, I might make one or two offers for someone till they sort of learn what a good offer looks like...but Im just not going to write unrealistic offers. There are plenty of agents out there who will and have the time to do so, I just dont have the time to operate that way.

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OP

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

10y

Originally posted by @Russell Brazil:

As an agent I do work with investors, and a lot more so than most of my colleagues....but I wouldnt work with the the type of investor that is throwing 50 offers out there. That is fine if that is their strategy, but I think those individuals just need to get their own license to operate that way. When I write up an offer, it takes me a couple of hours to put it altogether due to he absurd lengths of our contracts. I am insanely busy working with reasonable clients, there is no way I could spend the time writing up dozens of contracts.

Also when I write an offer for someone....the intent is that we acquire the property. If the price is unrealistic, I might make one or two offers for someone till they sort of learn what a good offer looks like...but Im just not going to write unrealistic offers. There are plenty of agents out there who will and have the time to do so, I just dont have the time to operate that way.

Russell,

For those that don't know:

"I might make one or two offers for someone till they sort of learn what a good offer looks like..."

How do you determine what a good offer looks like?.... This could be different for everyone as criteria varies for every investor.

I read a few posts where the person refers to this but don't really explain how or what makes a good offer.

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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

10y

Originally posted by @Daria B.:

For those that don't know:

"I might make one or two offers for someone till they sort of learn what a good offer looks like..."

How do you determine what a good offer looks like?.... This could be different for everyone as criteria varies for every investor.

I read a few posts where the person refers to this but don't really explain how or what makes a good offer.

A good offer is a realistic offer. If a house has a true market value of $400k, then a $300k offer would not be a good offer. If the neighborhood typically is slower and sells at 95% of list price...a realistic offer might be starting at 10% under list price, if it has been priced expecting a 5% below list price sale price.

If the neighborhood sells at 20% more than list price, then bidding under is not a good offer.

Now the circumstances surrounding any individual house could necessitate a low ball offer. Maybe the house is grossly over priced. Maybe you have knowledge that the seller has to close the deal and the most money isnt the most important thing to the seller. A lot of this information can come from your agent communicating with the other agent. If they are a good agent, then they may have a working relationship with the agent on the other side of the offer....or they may know the agent on the other side of the deal is full of crap. Market knowledge is not merely limited to real estate, but also the knowledge of who is operating in the market. Sometimes that information is more valuable than anything about the actual real estate market.

A good agent will be able to advise you as to what a good offer is. The key though is finding a good agent. Most of the agents I work with I feel are pretty good agents and can guide some, but that is because we are in a high producing office...so whether I close a transaction or not really isnt a big deal. I can close zero transactions in a year and still live comfortably on my rental income. I would much rather not close a transaction and keep a client happy...because I understand Im likely to get multiple referrals from a happy client. Missing out on a $10k commission now can potentially earn me $50k in the long run.

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OP

Rental Property Investor · Gainesville, FL · Member since 2015 · 1k+ posts · 432 votes

10y

Originally posted by @Russell Brazil:

Originally posted by @Daria B.:

For those that don't know:

"I might make one or two offers for someone till they sort of learn what a good offer looks like..."

How do you determine what a good offer looks like?.... This could be different for everyone as criteria varies for every investor.

I read a few posts where the person refers to this but don't really explain how or what makes a good offer.

A good offer is a realistic offer. If a house has a true market value of $400k, then a $300k offer would not be a good offer. If the neighborhood typically is slower and sells at 95% of list price...a realistic offer might be starting at 10% under list price, if it has been priced expecting a 5% below list price sale price.

If the neighborhood sells at 20% more than list price, then bidding under is not a good offer.

Now the circumstances surrounding any individual house could necessitate a low ball offer. Maybe the house is grossly over priced. Maybe you have knowledge that the seller has to close the deal and the most money isnt the most important thing to the seller. A lot of this information can come from your agent communicating with the other agent. If they are a good agent, then they may have a working relationship with the agent on the other side of the offer....or they may know the agent on the other side of the deal is full of crap. Market knowledge is not merely limited to real estate, but also the knowledge of who is operating in the market. Sometimes that information is more valuable than anything about the actual real estate market.

A good agent will be able to advise you as to what a good offer is. The key though is finding a good agent. Most of the agents I work with I feel are pretty good agents and can guide some, but that is because we are in a high producing office...so whether I close a transaction or not really isnt a big deal. I can close zero transactions in a year and still live comfortably on my rental income. I would much rather not close a transaction and keep a client happy...because I understand Im likely to get multiple referrals from a happy client. Missing out on a $10k commission now can potentially earn me $50k in the long run.

These are a lot of good parameters. For the most part though this is information that only realtors can pull together from their available resources. Thanks for contributing.

Jacob Casarez

Specialist · Columbus, GA · Member since 2015 · 81 posts · 16 votes

10y

@Joe Villeneuve How important is it to use an "investor's agent" when looking at investment properties? I looked at two multi's last week and the agent that got me into the units does not invest in real estate themselves and started telling me their "two cents" about the properties. I really would feel more comfortable using an REA that invests themselves. How important is this? Or perhaps I am exaggerating -- look forward to hearing your response. Thanks

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

10y

@Jacob Casarez I your talking Orygun then just google duplex 4 plex specialist and realtors will come up.. if its bigger then simply go to any number of the commercial brokerages.. most multi in Oregon is not traded on the MLS ... commercial brokers many times never put their listings on line they market them to their clients as they want to double end as many deals as they can.

PS I have a MHP I am rehabbing right now in Springfield I would entertain an offer on that. With a big enough downpayment I could also do some owner financing we own it free and clear

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