Are you a real estate agent who is friendly with real estate investors? If not, you could be.
The market has had its ups and downs over the past decade, but experts agree that real estate is still a good investment. According to reports by the National Association of REALTORS and BiggerPockets, there might be as many as 7 million real estate investors in the United States 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 the language of real estate investors
Investors discuss things like ROI, cap rates, 1031 exchanges, cash-on-cash returns, and net present value. (If you need to work on your continuing education to speak the same language, take a look at some of the available CE courses.)
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 to be updated, and most important, 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 the timeline of real estate investors
What’s their investment horizon? Is this a long-term hold with a five- to ten-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 the go-to person for real estate investors
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.