The meeting took place at a popular local burger hangout near the campus of Arizona State University. Fresh out of a foreclosure boot camp I took in Denver the month before, I scheduled an appointment with a highly motivated Realtor looking for new business.
After the typical pleasantries were exchanged I cut right to the chase. I told this agent I needed someone that could help me find great deals on the multiple listing service. Furthermore, I wanted a Realtor that could write multiple low-ball offers for me every week AND provide comps for each deal. Of course, I’d need to get in to see these houses ASAP if any of my low-ball offers were accepted.
As we wrapped up our lunch this Realtor kindly shook my hand and said he’d get back to me. And I never heard from him again.
I look back on that conversation, which took place about 12 years ago, and smile. Boy, was I a dope. If that Realtor had agreed to work with me it would have been a colossal waste of his time. I had no real estate investing experience, limited capital and vague income goals.
I teach a class for Arizona Realtors called Attracting Investor Clients. Most of the material is focused on helping agents understand the mindset of a real estate investor. After all, we think differently than retail buyers. However, I also spend a great deal of time explaining how to pre-qualify a real estate investor.
Before they ever get on the computer to search for deals, or get in the car to show a property, I advise Realtors to ask the investor these four questions:
- What kind of return on investment are you looking for?
- How much money do you have to invest?
- How long can you keep this money invested?
- What’s your exit strategy?
If the investor is unwilling or incapable of answering these questions I recommend the Realtor do the following:
- Either ask the investor to call back later with the answers to these four questions.
- Or, refer the investor to another agent in the office they don’t like.
Harsh? Maybe. But it’s not realistic or responsible for a Realtor to work with an investor that isn’t clear about return on investment, capital limitations, time limitations and exit strategy.
Since that embarrassing lunch meeting 12 years ago I’ve developed win-win relationships with several Realtors. They like working with me because my expectations are reasonable, my buying criteria is set and I’m decisive. I enjoy working with these agents because they are knowledgeable, good with technology and quick to respond.
That, and they usually buy me lunch.