Since I am knee deep in the insurance business, I think you’ll like what I am about to tell you. First, a little about our agency so you get the full picture.
We are what is called a P&C agency. P&C standing for property and casualty. In short, that means besides writing life and health insurance, we also write auto, home, business, liability, bonds, renter insurance, etc. On the surface that is a big yawn until you realize there are people behind each of the policies.
Take auto insurance. Every state requires you carry a minimum coverage on each car registered in your name. Only insurance companies can sell you the insurance. Hence, you have to deal with an agent. That’s where we enter the picture.
As we talk to clients we have to ask questions. It is surprising how much information people give you without asking. So, we know if they are renting, living with parents or, in the case of one of our clients, in his camper. I bet you have already figured out what I am about to say.
We are now armed with almost every piece of information a loan officer would obtain. We know how much they pay in rent, how long they’ve lived at their address, if they have a checking account and with what bank and a bunch more.
Couple this with the fact that homes and condos are selling for as little as 10K in our county and you can correctly conclude we have a built in passel of potential home buyers. This week alone we are taking four clients out house hunting.
Not us, but one of our real estate agent clients. You see, we teamed up with this gentleman because it is easier for us to make money by letting someone else do the work. Our part in the scenario is bankrolling the transaction. And, yes, he meets our criteria re: trust and smarts. Two important factors you want in a real estate agent as far as I am concerned.
The beauty of this scenario is its simplicity. By using combined talents, we have created a market where none existed. With a little effort, we will start an ongoing cash flow. By the way, thanks to the forced insurance laws, we will never run out of prospects. How about that for a pipeline?
The Moral of the Story
I would bet not many people think of their auto insurance agent as a source of home buyers. That may be a good thing. However, if you are buddies with your auto insurance agent, why not bend his ear and show him how he can increase his cash flow while at the same time helping his clients. You see, he not only gets to make a few bucks in the transaction, he gets to write the homeowner insurance. That’s sweet.
NOTE: I tell you this not knowing what the laws in your jurisdiction say about insurance agents and real estate investing. My first thought is no prohibition exists against an agent buying and selling real estate as long as he continues in the insurance business.
I also believe that full disclosure will mitigate any conflict. It does in my home town.
Now go and make a blue fortune with your auto insurance agent.