How do you feel when you get a lead who is a real estate investor? If you’re like many Realtors®, you try to find a way out. Investors have a poor reputation in our industry – we see them as vultures that probably just attended a get-rich-quick conference and want to be millionaires by tomorrow.
We don’t have this perception by accident. Many of us have had bad experiences with inexperienced real estate investors, or those who had been sold a program and were looking to make good on their “training”. We have seen them follow real estate collapses and foreclosures like a lion hunting gazelles. However, that isn’t the whole truth. An experienced real estate investor can be an amazing source of business for an agent.
Rental Properties and More
It’s interesting to note that most real estate investors are actually just holders of rental properties. They see their second home as a nest egg, and rent it out, pay off the mortgage, and retire comfortably. Considering that most real estate agents are focused only on owner-occupied housing, you can grow your business significantly if you develop yourself as a specialist in buying rental properties.
However, most families buy only one, or perhaps two, rental properties as a retirement strategy. The real repeat business exists where most Realtors® don’t want to go – in the pure investment, buy-and-sell community. Once you develop a relationship with a real estate investor, not only will you likely get all of their business, they may refer you to other investors who are looking for an agent in your area. Remember that a lack of other Realtors® in this space represents a real opportunity!
Yes, there are bad investors and inexperienced gullible people looking to buy investment property. Keep in mind, though – just like a buyer doesn’t agree to work with just any Realtor®, don’t feel like you have to work with every investor that comes your way. Make sure they meet your needs – experienced, well-financed, with goals you can help them meet. Then, make sure you meet their expectations.
How to Stand Out as an Investor’s Agent
Investors realize that a lot of real estate agents aren’t able or willing to work with them to accomplish what they need. Investors realize that they need a Realtor® who has a specific set of skills and a good understanding of seeing real estate in a different way. Here are some of the things they are looking for – developing these skills will help you stand out as a qualified investor’s agent.
- Be Quick on the Draw. Investors need to move quickly to assess and buy properties. If you want to focus on the investors market, be very quick to return phone calls and messages.
- Be a Career Agent Focused on the Long Term. Investors are quick to weed out agents who are working part-time or who seem uncommitted to the business. To be a strong Realtor® for investors, be committed for the long haul.
- Learn, Learn, and Learn More. Investors have a different lingo, a different focus, and a different way of valuing and seeing property. Learn how to buy and sell different types of properties, how to determine rents, and how the investment market in your area works.
- Get Great at Making Offers. Being an investor’s agent means making a lot of offers in a short amount of time. Hone your negotiating skills. You’ll need them – as much for talking to your investor clients as for closing deals. You’ll also need a thick skin for weathering rejection.
- Be Ethical. Don’t be willing to stretch the rules to win investor business. Making owner-occupier bids when you know it isn’t true or cutting corners to win a deal isn’t worth the consequences. Also, you’ll attract the wrong kind of investor if you get known for these types of practices.
- Have a Backup. You’re only human – you get sick, need vacations, and have other reasons to be unavailable. To be a strong investor’s agent, you need to have someone else who can give investors the speed they need when you’re not available.
Being a great investor’s agent and attracting the right clients can be a lot of work. However, the repeat business can be extremely lucrative, and there’s very little competition among Realtors® to service the investment community. Rather than seeing investors as sharks or starry-eyed innocents who went to the wrong conference, see them as a source of a lucrative, ongoing business relationship.
Do you work with investors? Why or why not? Share in the comments!
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