Although it takes some specialized knowledge to work with clients who are investing in real estate, adding a few of these repeat buyers to your client base can increase and stabilize your income, especially during times of low interest rates and depressed property values. Here, in summary, are some of the arguments I hear, both for and against, working with investors.
Some arguments in favor:
- Investors tend to be repeat buyers
- Investors tend to buy bigger and bigger properties
- With proper care, investors can be loyal customers (especially if they are not local)
Some arguments against:
- Investors are not emotionally attached to the property, so they may be more likely to back out of a transaction
- Investors may not feel any loyalty toward a particular real estate agent
- Investors generally expect a higher level of specialized knowledge, expertise and experience from their agent
- Sophisticated investors may want to avoid using a real estate agent in some transactions
- Investors may not be local
Certainly there are more pros and cons than this, and notice that some of the pros and cons overlap. Here are the fundamentals of working with investors: first, you have to educate yourself in the basics of investment real estate - know the terminology and techniques of investing; also, start with someone friendly and who is at about the same level of knowledge as you - a successful new investor will grow along with you; know your market, know what the best investments are - perhaps four-plexes are hot right now in your town, or commercial property; finally, develop working relationships with loan officers and financial planners who are also knowledgeable in the field of real estate investing.
Some agents hold classes on real estate investment fundamentals, drawing in new clients by showing and sharing knowledge, experience and expertise. This is a great way to get started, since these novice investors will see you as a resource and will grow along with you.
If you are struggling right now with a lot of listings and a few buyers who are running you ragged, try spending a bit of time each day educating yourself on investing and nurturing some investment clients. If you find that you fit in this niche market, you'll find excellent returns on the time you invested.