Lately I have seen a number of folks posting about suggestions on "investor friendly" agents. Unfortunately, this term is being thrown around loosely and I believe it is time we clear the air. It is not uncommon for investors to prefer an agent that has been around the block a time or two. That said, how is that one can vet whether an agent is truly "investor friendly" or not?
In the past I have stuck with two questions to get the ball rolling and they are as follows:
1.) How many investment properties have you sold within the last 12 months? (Be very clear here... this does not include cookie cutter homes in the suburbs where those big juicy commission are hiding)
This one gets the conversation started and gives you an opportunity to see if the agent can talk the talk and back it up. An agent should be able to quickly share with you what their numbers look like and what the transactions have consisted of.
2.) Do you own any investment properties yourself? If so, what kind and how many?
Feel free to be more specific here, but the key is to identify whether or not they are in the game themselves. Often times you may find that he or she is just chasing a commission (not always a bad thing.. might find some hustlers). You will know right away when an agent owns properties because they will be able to share experiences in various areas that you may be looking into. This can advantageous to people who are not familiar with an area.
Moral of the story... Don't to be afraid to lean in and ask the uncomfortable questions. These are the guys & gals that will be sending potential "deals" and you need to know if they are well equipped to properly vet opportunities or not. Hope this helps!
Good thoughts here @Zach Hoereth ! I think there are two key ideas behind the idea of an "investor friendly" agent.
1. The meaning of "investor friendly" that we use with other trades -- meaning "cheap"
2. The meaning that is more akin to "savvy with investments"
I think your questions above are perfect for finding an agent (like the two of us I'd guess) who can serve an investor with excellence . . . however if people are looking for a cheap agent then they'll find the same vicious cycle as with any other "economical" tradesperson . . . cheap and good, cheap and busy, cheap and gone.
My standard is licensed at least 3 years and has personally invested.
I think asking how many investment properties they helped with in the past year can be misleading. How many is a good number? It could be zero because the market in the last year was not investor friendly. (Currently the case in my market for the most part.) Or is could be 15 because they came across a retiring investor who needed to sell his portfolio (happened to me in 2017.) Neither one alone would demonstrate whether an agent is or is not investor friendly.
However, if they are both an experienced investor and Realtor, you are off to a good start. Even if you are a fix an flip person and your Realtor is a buy and hold investor, that is fine. Vice versa should also be fine. If they play on one side of the fence, they likely know about the other side.
I may add a third question to the interview. Which investor meet ups do you attend? The name, quantity, frequency of attendance is not important. Is is simply important that they know of these and attend on a semi regular basis. If they are plugged into REIAs at some level, they are plugged into the investor community.
Hope that helps
I've interviewed dozens of people who wanted to find an "investor-friendly agent" and everyone gives a slightly different answer. Here are just some of the things people have mentioned wanting from an investor-friendly agent (none of these are from the same person):
- as mentioned previously, they themselves invest (and they don't steal the deals from you to take for themselves)
- a decent number of deals done (but as @Joe Facenda said, this could be misleading. and everyone gave a different number for what was "decent")
- they go out of their way to find great deals for you
- they understand the investor's point of view and can speak the language even if they don't invest
- they know the laws around airbnbing, renting out, zoning, permitting, etc.
- they have a network of investor-friendly lenders, contractors, property managers, etc.
It's vital that you dig a bit- almost every agent will tell you they are an expert in whatever you ask them about- they want the commission. I was burned a few times early in my career and I get a decent amount of business from others who have been recently burned by an agent who claimed a great deal of experience, but couldn't answer basic questions about investing once they started analyzing deals.
They need to understand investor POV, needs, expectations, terminology.
And they need to be GOOD personal investors. They can own a rental property and still be oblivious. Vernacular and expectations will quickly determine their knowledge.