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Use your experience to add value to your clients.

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119

Being a real estate investor, I add value to my clients by using investor techniques to give my clients the biggest bang for the buck. As an investor, I've always been all about the win-win deal. Nobody ever walked away from one of my deals feeling like they were just robbed. It has never happened once over dozens of deals. 

Right now, I'm in the middle of great deal that illustrates how using your life experience can cause multiple people to benefit simultaneously. I have an investor (A) whose properties our company manages. Recently, he has started liquidating some of his holdings, and we've been the selling agents for them.

I handle the way I work with investors slightly different than traditional buyers and sellers. Many, if not most, investors are accustomed to being creative. It can be a little nerve-wrecking for traditional buyers and sellers. But, if I can use an investor technique to help my traditional clients get a better deal, I'll sit them down and explain everything in great detail to help them see the benefit.

When working with investors, I look at things a little different. For instance, I want to know what an investor paid for a property (that's not unususal), what they've invested in it and what the local comps tell me. Once I know those things, I can get a better idea of what they could sell it for in the current market. I've done that with this client's property. It will take a four digit investment to take that house to next level. In the interim, I have linked to another investor (B) looking for flips. 

I've negotiated a sale price from investor A that limits his liability by shifting mortgage, insurance, tax and utility payments to investor B until a closing can take place in late September. Investor A will allow investor B to renovate the house between now and the end of September.

Why would he do that? Because I have also enlisted as cash investor C in the mix. Investor B has an "and or assigns" contract on the property. Investor B had a written agreement to sell the property to investor C on the same day as his closing with investor A.

At the end of September, investor B will assign his rights to purchase the property to investor C for a renovated sale price. Investor A will receive his agreed upon price, investor B will receive the difference and investor C will receive title to the property. The title will only change hands once even though three people are involved.

Investor B never actually takes ownership of the property because of his freedom to assign his rights to investor C. He just receives a check for the difference. I could receive two commissions for both sides on both deals, but I've forgone that opportunity to help these investors learn some new tricks to the investor trade.

I have both investor A and Investor B paying half of the Realtor commission and I reduced the rate to increase their share. When all is said and done, they will both get about the same amount of money for their efforts, and investor C will receive a newly renovated property at a discount with a high rental potential. And, of course, we already have a tenant for investor C. 

I love what I do. It's so nice when you can use your life experience to add value to your clients. This does work better because investor C is a cash buyer, but it would work with a client who is financing the property. Make sure your state allows the "and/or assigns" language in real estate deals before trying something creative like this. 

Comments(5)

Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

After 26 years and over 2500 homes sold I feel I have faced just about everything, so when I get something new I get excited. My greatest joy is with the two young REALTORS® with my brokerage that I can pass on the knowledge. If you have experience and it is about doing the right thing for your clients be sure and pass it on.

Aug 20, 2015 06:57 AM
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Mike, I'd do business with you any day of the week.....you are a man of honesty and integrity.

Aug 20, 2015 08:32 AM
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

Now that's some creative realty work right there Mike! Working with investors is a completely different ball game than traditionsl buyers and sellers. 

Aug 20, 2015 09:50 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I've been licensed since 1981.  I believe experience, knowledge and integrity are the three most valuable traits for those of us working as real estate professionals.

Aug 20, 2015 12:56 PM
James Dray
Fathom Realty - Bentonville, AR

Good morning Mike.  The creative mind results in creative ways to move this market.  All in all everyone wins.

Aug 20, 2015 08:34 PM