When to Reach Out to a Real Estate Agent as a New Investor

Question

Hello, all!

I am an engineer located on the Space Coast of Florida (Cocoa Beach/Melbourne/Brevard County) and am currently in the educational phase, as I am new to the real estate investing world. I have read and heard a lot from the BP podcast that it is recommended to reach out to the real estate agents that work in your intended market. However, being that I am a newbie and do not have all of my ducks in a row, so to speak, I am hesitant to reach out to an agent, as I do not want to waste their time.

My questions are:

1.) When should a newbie investor like myself reach out to a real estate agent?

2.) Should I wait until I have clearly defined my intended market, strategy, niche, etc.?

3.) Are there any rules of thumb on how to ethically "shop" for multiple agents at the same time? I would think that it is frowned upon to have multiple agents taking their time to find you deals simultaneously.

Any advice would be greatly appreciated!

Thanks, and cheers!

- Shawn

Mason Hickman · Answer

@Shawn S.

It is ok to reach out to agents at any stage in your search but be truthful and don’t try to bullshit them with where you are in the process. If you are just exploring and trying to figure out what market to invest in, just tell them that. Most, if not all will appreciate and reward your honesty and candor. Granted, some won’t want to put in the effort to try to work with you, but someone will.

The other thing to show an agent you’re serious and not going to waste their time is to go get pre-approved. It makes the conversation go smoother If you’re pre-approved; a good agent can help you determine a good market to invest in.

Good luck!

Shawn S. · Answer

@Brenden Mitchum,

Thank you for your warm welcome and kind comments. I am excited for this new journey and understand that the development of long-lasting relationships relies strongly on trust and honesty, so I just want to make sure I go about this in the right way.

I am currently learning about the various strategies and niches that are available in real estate investing and have been exploring the markets that are near me. My plan is to more finely define my long term goals and to let that steer me into which market(s) I should get after.

Your reply to my 3rd question is great advice! This is along the lines of what I had originally thought the right approach would be, so it is reassuring to hear it come from someone else with experience.

Thanks for your insight on using  a newer agent who is well-versed in real estate investing. It would make sense that they would have a little more time and patience for a first-time investor.

Your advice has been more than helpful!

Thanks again,

Shawn

Brenden Mitchum · Answer

Hey @Shawn S., welcome to the BP community!

Fantastic first post! It's refreshing to see someone who is aware and understanding of the fact that it can be time-consuming and a bit risky for agents to work with new investors. So, first I wanted to thank you for asking these questions as you start your journey. This already tells me that you will have no problem building solid relationships with agents. But, to answer your questions:

1. You should start reaching out to agents (and investors) as soon as you have narrowed in on a single market (or are trying to decide between a few). If they are active on BiggerPockets, this is likely because they really have a passion for real estate and are happy to help others who do too. Sure, some are just on here to generate business but that's fine too because they will see the value in helping a potential future client.

2. See my answer above. Basically, no, you don't have to wait until you have super granular criteria. But once you have chosen a market, the more specific your criteria, the better an agent will be able to help you.

3. You'll probably get a million different answers for this one, but I am a big believer in starting off with several agents. Don't do this in a dishonest way but you also don't really need to tell them all that you're working with other agents (they should assume this). However, the one rule here is this: WHOEVER BRINGS YOU A DEAL IS YOUR AGENT FOR THAT DEAL. Obviously, there are exceptions here, like if the agent that brought you a deal goes MIA and you need to act fast.

Like @Mason Hickman said, as long as you're straight forward with them on where you're at and what you're looking for, you'll be fine. Remember, any agent worth their salt knows how important leads are. You will run into plenty of agents who are simply too busy to give a new investor the extra attention they need. Your best bet is to find an agent who is fairly new to the game but knows there stuff and understands the investment side of RE.

Hope that helps a bit and please, feel free to reach out anytime if you have other questions or just want to chat!

Shawn S. · Answer

@Catherine Emert,

Great advice! Interviewing multiple agents seems to be a common approach. And I am sure, as in many other professions, not all agents are created equally. Additionally, I hear a lot about the importance in finding an agent that is "investor-friendly", as they are more familiar with applying the concepts that yield a higher ROI, larger ARV, etc.. Once I have my long-term goals more clearly defined, one of my executables is to locate then interview local investor-friendly agents.

Tony Angelos · Answer

Hey @Shawn S. there's no right time to talk to an agent. I've had plenty of conversations with new investors who go into the conversation with either A) a strong preference to do one thing or B) a few options they can pursue and in both scenarios they've come out of the conversation reevaluating their prior convictions with new information.

For question 3, it's a little more complicated. For on market deals, several agents can setup the same search so you'd kind of just need to decide who you want to work with. Who do you trust to be on their A game and negotiate for you/ connect you with quality partners? That's the real question. For off market deals, there are situations where you don't even need to find it through the broker. You can sign up to wholesalers email lists the same as them, and you're the one who should be evaluating the deal to see if it meets your criteria. So in this situation, who's the most competent to accurately get an ARV, who has the best network of individuals to introduce you too.

Like any business involving services, if you take care of a broker, they're going to take care of you. Find a primary you like, but a secondary if they can't deliver. After that, it'll be too hard to juggle anyways.

Tony Angelos · Answer

@Shawn S. This is often true, but don't feel like they're going to be sending you a specific deal and you're afraid to waste their time. They throw your name on an email list and just blast it out. Some are already stabilized properties, some are in need of gut rehabs, it's up to you to determine if it fits your needs. But in terms of off market, thats were you're going to find them.

Shawn S. · Answer

@Mason Hickman,

Great info! Especially regarding how a new pre-approval is written by the lender to match the offer amount -- that is new information for me.

Thanks!

Shawn S. · Answer

@Tony Angelos,

Thank you for your perspective!

Your comments on utilizing a wholesale approach are valid points, and perhaps could allow me to find more profitable deals. However, I am not sure how applicable it will be to my situation.

Now, I understand that there are always exceptions to the norm, but I have read in the BP's UBG that wholesalers typically sell to house flippers who are cash buyers. As appealing and fun as it seems, I am not too certain that house flipping will be my strategy of choice -- at least maybe not as my first deal -- as I am currently working a full-time W-2 and do not anticipate that I will have the time and resources to manage a flip. I am aware, however, that this does not 100% exclude house flipping and buying wholesale deals from the list of strategies that can lead me towards my goals.

Cheers!

Evan Polaski · Answer

@Shawn S. When is the "right time" to start talking to agents?  As soon as you have money, and CAN pull the trigger.  Agents will be a wealth of knowledge from helping define your areas of focus, potentially product type, etc.  And let them know where you are.  Most people like to feel like an expert, and you are using them to help educate you.

That being said, I would have a few pieces of info ready.  What's your general budget?  Are you flipping, renting, house hacking?  Do you want to take on some rehab, a lot of rehab, turnkey?

If you have several neighborhoods of interest, you can talk to several agents.  In single families, most agents get a foothold in one neighborhood and focus on that area.  Therefore they tend to know what is coming before listed.  But be up front that you are ready to move on properties in that neighborhood and will use them.  But if something is coming soon that you hear about from someone else, you are going to work with that other agent.  This is a delicate balance and may turn off some agents, but ultimately agents want the sale, so quite frankly most will get over an hurt feelings very quickly if they can make another sale.

Catherine Emert · Answer

I would recommend interviewing several brokers in each of the areas that you might be interested in. Not every agent is invested knowledgable or friendly. Be upfront about where you are in the process and get to know how they interact. Make sure they are a good fit for you!

When to Reach Out to a Real Estate Agent as a New Investor

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