Are you a real estate agent who is friendly with real estate investors? If not, you could be.
There are around 7 million real estate investors in the U.S. who are looking to buy property within the next 12 months.* Successful investors tend to buy and sell multiple properties in a short period of time—and work with the same agent to do so—meaning this could be a steady stream of income for you.
How can you become their go-to agent? Consider these tips:
1) Learn their language. Investors discuss things like ROI, cap rates, 1031 exchanges, cash-on-cash returns and net present value. (You can learn how to talk-the-talk in McKissock’s 2-part course: How to Work with Real Estate Investors Part 1 and Part 2.)
2) Know their investment goals. Understand what matters to them. They don’t likely care about the existing paint or carpet colors. They only care if the walls need to be repainted, if the bathroom needs updated and, most importantly, how much will it cost. The way you approach a real estate investor about a property shouldn’t be the same way you pitch a property to traditional buyers and sellers. You need to understand your client’s investment strategy: Buy, fix, and flip? Buy at wholesale and sell to another investor? Buy, rehab, and rent?
3) Identify their timeline. What’s their investment horizon? Is this a long-term hold with a 5-10 year profit window, or does the investor need to sell the property before purchasing another one? The more you know about your investor’s timeline, the more useful you can be.
4) Do the math. Learn how to use the many calculations available to evaluate and select real estate investment properties. The relationship between investor client and agent will be strengthened if you can locate suitable properties and help analyze their return on investment.
5) Do your market homework. Once you understand their objectives, your talents as a local market expert come in handy. What neighborhoods are hot right now? What areas are up-and-coming? Where are the best schools? Where are the new jobs located? Help identify those opportunities and present properties for your investor to consider.
6) Become their go-to person. Once you know their goals and can help identify suitable properties, look for additional ways to add value to your services. One way to do this is by understanding their pain points and suggesting resources. Do they need a good handyman? Estimates from painters? Flooring quotes? A tax advisor? Be their go-to source for these referrals.
7) Be an insider.Joining a real estate investor group in your area is a great way to find prospective clients, learn what investors in your area are looking for, and give your insight on potential properties.
As an agent or broker, you don’t need to be an expert in real estate investing – but if you want to become an investor friendly agent, it’s wise to learn these fundamentals. Learn more today in our 2-part series: How to Work with Real Estate Investors Part 1 and Part 2.
Want more? Download our infographic for a visual guide on how to work with real estate investors.