3 Ways to Be a Real Estate Investor Advocate and Get More Deals

by | BiggerPockets.com

It’s already happening. As prices surge after the historic real estate crash, investors are sitting in the hot seat as real estate becomes political. National and local associations are decrying an affordability crisis, and local community activists are blaming developers and investors for sky-high rental prices.

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3 Ways to Be a Real Estate Investor Advocate and Get More Deals

1. Talk the talk.

It’s unfortunate our community lacks a centralized voice like Realtors (NAR), builders (NAHB), and the mortgage industry (MBA) enjoys. Our community needs to do a much better job communicating that we renovate housing stock, improve neighborhoods, increase tax values, and create jobs. We are investors, not speculators. We provide an important service in our communities.

When I joined the family real estate business in 2005, everyone was dropping their day job to become a real estate agent or investor. “Investors” could get a nothing down loan (lair loan) to buy a property, add zero value to a property, and after sitting tight for a few months, the property would spit out a decent return. The speculator/investor was an easy target for blame during the downturn.

There’s a big difference between an investor and a speculator. The speculator doesn’t typically add value to a transaction via things like repairs. We don’t always make a profit, and mistakes can be made. But we don’t work for free, and we play an important role in improving the areas where we work.

Get good at representing our community. We need more advocates on the ground reminding people and other professionals in the real estate community the important role we play in every cycle.

build-relationships

Related: 10 Ways to Build a Reputation as Your Market’s Premier Real Estate Investor

2. Walk the walk.

It’s easier to talk the talk than it is to walk the walk. Other professional associations have licensing requirements, education minimums, and ethics guidelines. Investors don’t unfortunately. It’s up to us to lead by example. It only takes one bad apple to ruin the reputation of the community at large. We work way too hard to continue being labeled as “sharks.”

It simply comes down to doing great work and staying focused on adding value. Whether you’re a flipper doing a good job improving a house or a landlord being professional and decent to tenants, be focused on ways to be outstanding. The side benefit is you enjoy what you do! Along the way, you build your brand and support our community at large by being cool instead of a tool.

3. Get involved.

Investors are so busy, they rarely find time to get involved in the community. This is unfortunate because getting involved in your local community can build your network, add to your personal growth, and send deals your way. The side benefit is you represent our community and place us in a positive light.

Participating is more important than ever because 2017 is going to get political. I’m already hearing similar scripts from 2005/06, where developers and landlords are the target of some negative press. In states like California, not only have prices drastically increased since the downturn, rents have stayed very strong. “Affordability” is the key word, and “homelessness” is a close second. Pay attention to the individuals throwing these terms and in what context they are being used.

The saying goes, “When you’re not at the table, you’re on the table.” This is very true for real estate investors.

When investors get involved in the community, it humanizes what we do. Better yet, we can show examples of the awesome work we do. I serve on several boards, and I’m always the only real estate investor. I’ve been able to add professionals to my referral network (lawyers, professional fiduciaries, real estate agents, mortgage pros, CPAs, and banks) simply by getting to personally know them during my board service. They’ve not only become referral sources, they’ve become friends that will vouch for my work.

Make sure to thoughtfully select where you serve. Each of my boards has a job. Some I do for personal growth; others I do for long-term relationship building. Make sure it’s something you’re passionate about or very interested in. And always show up and perform as promised. Don’t be a bench warmer.

Related: How My Journey Out of $2.5M in Debt Inspired Me to Live a Charity-Focused Life

Also, don’t get stuck thinking you must serve on a nonprofit board. You can also join commissions at the city level, including those having to do with development. If you’re really interested in building or understanding the inner workings of city development, serving in this manner gives you more insight into the process and the local players. How valuable is that?!

Whatever you do, don’t be that guy/gal who joins a board or commission and start hounding people for leads. That’s the wrong approach. Be authentic, provide thoughtful input, and serve. You might be surprised what comes next.

make-offers

Case Study

We participated with our local city government during the downturn by invite of the mayor. We got to know the city staff dealing with the issues. At the time, the city was receiving Neighborhood Stabilization Funds and competing with investors directly. As you could imagine, we were the lone voice on the panel advocating for our industry and the important work that we do.

At this level, we occasionally served as a sounding board for the city—nothing more and very infrequently. However, the service led to important relationship building that paid off years later.

We had land project that had been stuck. The city guidelines had changed, and a lot split was going to take over $300,000 in upgrades for things like grading dirt to installing city medians to make the project happen. YIKES! The upgrades would have made the project unprofitable.

One of the contacts we worked with over the years put together a meeting with planning, development, fire, and housing for a one-stop shop meeting. We may have been an initial guinea pig for a process the city is trying to instill in the planning process.

Typically, I would have to coordinate and plan to meet with each of these departments separately. The meeting started, and we showed them the years-long process we had gone through, including working with our team, engineers, and the city. I had years of documents.

I simply asked: “If you were us, what would you do?”

The answer was to not do the lot split into five lots (which triggered all the expense) and instead do a lot line adjustment. All the parties in the room agreed, and in 30 minutes, we were done and ready to move forward.

That’s a relationship that paid off in spades. It started with service.

Have you seen the perception towards investors start to shift? How do you combat that message?

Leave your comments below!

About Author

Aaron Norris

7 Comments

  1. Aaron Norris

    I was at a conference in March and we had a very well respected community leader that was really concerned about affordable housing. The county has run out of section 8 vouchers and there’s a growing waiting list. In the Inland Empire, it is a real concern. Investors don’t hold on to rentals to not raise rents. The downturn put our area in a bind and our region is going to have to be real creative on how to create housing. Co-living? When will Airbnb get into the shared housing space?

  2. Sergey Tkachev

    Aaron, thanks for the post! This is indeed a topic that is not discussed very much. I agree that there is much benefit to a community when real estate investors are more engaged, I’ve witnessed the positive changes both in the Sacramento area as well as in various parts of Southern California.

    Thank you for the post, this is a need I’ve been seeing in my community and your post is providing encouragement to get more engaged.

  3. Kevin Polite

    Great article. I’ve always advocated for being a part of the community you are improving and making a positive change. Perfect example: I was approached by a neighbor when renovating a Proprty I was going to rent. When I told the neighbor this she groaned and said the previous “investor” had tenants stay no longer than a couple of month and they were never the best neighbors. I promised her she would love the home and that I screen all my residents. Well we finished the home and as promised we got great residents. The neighbor bragged on about my company on Nextdoor and even sent me a referral. It’s just good business.

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