What It's Really Like Being An Agent Who Works With Investors
I don't talk much about my career, and since many of our readers are in the real estate field, I wanted to give some insight into what it's really like to be an agent who works with investors.
Quick background if you've never heard my story:
I bought my first house (a major fixer) in 2007. I got the real estate bug and decided to start a career in real estate, and that same year I got hired on as an assistant to a builder/developer. I did everything from permitting to creating budgets and hiring subcontractors. We built single family houses and duplexes for the owners to hold.
In 2009 I decided to get my real estate license so that I could represent myself and use the commission as part of the down payment. On the side I helped friends and family buy houses, and in December 2009 I decided to pursue real estate sales full time.
Like every new real estate agent I created a business plan.
I knew that I had to be different, and being different meant that I would make lemonade out of lemons, since this was 2009 after all.
My business plan was to go after the foreclosures, short sales and "value add" properties, also known as the ugly properties no one else wanted.
I knew that I could apply my construction knowledge and cost estimating skills to help investors who were willing to take on these projects make a great return.
My first sale as a full time agent was a two building lots with four foundations in the ground with a fence around it. A local builder was in the process of building four townhouses when the bank pulled his construction loan which forced him to stop building. I saw the opportunity, pulled in friends and family to fund the project and it went better than expected. I was hooked...
Why I Love Working With Investors
While I enjoyed working with friends and family, nothing compared to the feeling I got when I was able to help an investor client find a great deal. I enjoyed the challenge of scouring the MLS and previewing ugly fixer uppers to present as investment opportunities for buy & hold or flip to my investor clients.
Even bidding at the courthouse steps every friday for my investor clients was fun & exciting.
I quickly learned that working with investors allowed me to learn about different strategies and financing tactics that never came up when working with first time buyers or sellers.
Also, I was able to work with less clients overall when they were investors because most of my investor clients bought and sold multiple properties each year. I really got to know the criteria and goals of my clients, and this made it easier to match an investment opportunity with a particular investor.
The Downside To Working With Investors
From 2009 - 2014 that market was great for investors. I was able to find at least one good deal a day and we had little competition in the beginning, though as the market started to recover many other investors started entering the market and driving up prices.
2015 was the last new construction spec home that I built and sold because I couldn't find projects that would make sense anymore. The land values skyrocketed, subcontractors became busier and their pricing went up sometimes 20% in a few short months.
The inventory had dried up, and the greatest real estate sale was over.
A Light At The End Of The Tunnel
While many investors stopped investing in the Seattle market due to the price increases and lack of available deals, there were many new investors entering the market who where focusing on buy and hold investments.
While the price of real estate had gone up, so had rents, yet the mortgage rates remained historically low.
Those that could afford the new prices found great opportunities for double digit returns and the ability to ride the rental increases and I was able to focus on buy and hold investments rather than flip properties.
Why we need more investor savvy agents
No matter what the market is doing, there will always be real estate investors.
At times, the market may be better for flippers than buy & hold investors or vice versa.
What there will always be a lack of is real estate agents who want to work with investors and know how to evaluate deals.
Not once in my career did I have to spend money on advertising or buying leads, until 2015 when I decided to focus on regular buyers and sellers. While I was able to do a lot of retail business it was not as fulfilling to help someone sell a house or buy a home as it was for me to help an investor acquire an income producing rental property that would help them retire early.
With real estate investing being a great option for investors who are looking to diversify from Wall Street, there is a great need for agents to serve these clients.
On another note, most agents know how to market and sell properties, but they lack the financial strategies to invest themselves.
When I surveyed my real estate agent friends, a very small percentage had a retirement plan or even planned for retirement.
One rental property per year for ten years could be a great retirement strategy for a real estate agent, and a pretty easy one to execute.
My goal is to connect investors with other investor friendly agents in different markets across the US and give agents access to a wider investor database.
If you're an agent who would like to learn more about working with us, click here.
If you're an investor who would like to connect with investor friendly agents in other markets and get access to deals click here.