What makes an agent "Investor Friendly"?

Question

As an agent in my first year in the industry, I am all about learning how to become better. I spend multiple hours each day learning about the market that I serve so that I will be well-equipped with information for all my clients in the present and for the future.

This has made me question what will make an agent better for the local investors so that I can not only meet investors' needs but exceed them. Any advice from investors on what you look for in an agent, and maybe even situations your agent has gotten you into that I can learn from?

Nathan K. · Answer

Great question, Jacob. I've been investing in northern Virginia for the last few years and seeing 3% of every $600k home I buy go to someone else bothered me a lot - so I got my real estate license. Here's some food for thought from an agent who invests - I use my own license but if I were to hire a buyer's agent, I'd look for the below:

1) owning your own investment properties usually indicates you know what it means to be an investor. It helps you be more credible. David Greene always talks about it in the podcast, find an agent who also owns rental properties because they understand the numbers. So you become more valid if you own your own rental properties.

2) be able to mentally calculate CoC, know the market rates for rentals, know the market value of the property, and know any building projects in the area. If tech is moving to your location, if a hospital is being built, if the city is planning a new park nearby? Information like that.

3) understand different financing methods. This is pivotal. Most home buyers just go 20% conventional and that's that. They don't care about other options. I don't know too many investors that are happy with that because it ties up a lot of capital. Seller financing is especially huge for an investor. You can also consider DSCR (debt-service coverage ratio) loans if cash flow is high enough.

4) understand different renting strategies. These include house hacking, short term rentals, mid-term and long term rentals. Helping your client get the investment property is great, but do they know how they'll make money off it? Is it a strong mid-term rental property but they come in hot thinking it's a long term area? You've got to be the one with that insight.

5) understand human psychology and negotiating methods. There are extensive resources out there so I won't talk your ear off with recommendations, but at the end of the day, business is a person-oriented endeavor. If you don't understand people, it doesn't matter how good you are with numbers.

6) time in the market/running deals. I always hate when people say this, but it's true. The best thing you can do in preparation for serving your investor clients is running deals over and over. In doing so, you will become astonishingly efficient at running numbers, interest rates, PITI, taxes, etc, off the top of your head. The longer you're in the business, the more weight you'll carry - but ONLY if you know what you're doing. Unfortunately for new dudes like us, we can be as smart as we want, but it's our time in business that may be slowing down (which you can't control... you can control your level of intelligence though).

Hopefully all this makes sense and I'm excited you asked this question because it shows you care about those you serve!

Eliott Elias · Answer

A investor friendly agent will have off market deals in their back pocket at all times. Will invest in real estate themselves, are they sold in what they're selling?

Andrew Valeri · Answer

Hey @Jacob Mitchell

Your goal will be to bring value to them as an investor.

A few things I'd recommend:

Although you do not need to be an investor yourself - there's no substitute for experience. A new investor will likely be more confident if you can pull from experience.

Be an expert on the area that you service. Know what different neighborhoods get for rent. Know what areas are better/worse so you do not waste someone's time showing in a location that is the opposite of what they are looking for.

Have a list of provider- contractors/lenders etc that are quality that you can refer.

Consistently providing knowledge and value will reinforce the confidence of a new investor to do business with you.

Jacob Sloop · Answer

Certainly been said already but actually being an investor yourself, there really no substitute for it.

Also being super current on your local market, rents, prices, upcoming areas, areas to avoid..

Jack Mawer · Answer

I agree with Eliott in that these investor friendly agents will be well connected with lenders, wholesalers, etc and will most likely have access to off market properties through their connections

Jared Hottle · Answer

This is a great question. I believe it starts with education. Learning from biggerpockets, meeting people, meetups, books, etc. I think you need to own property yourself so you understand the struggles and build experience. If you cannot afford to buy an investment property start with househacking. I find alot of newer investors look at this strategy and to have some advice is invaluable.

Other traits that are important. Know your area extremely well from a rental law/registration situation, know the players (PMs, contractors, inspectors, suppliers, etc), attend meetups or start one if there is not one in your area.

Tiffany Alexy · Answer

Every agent is going to say they're investor friendly lol.. because why not, it's another client!?

To stand out, highlight your own investing experience.  Even better if you or your family members own investment properties.  There's no better substitute for experience IMO.  Know the lingo, know what they're looking for, know how to walk them through analyzing an investment property.  Know the regulations of the area (for example are STRs allowed etc).

Conner Olsen · Answer

Find out which areas are best for different types of investing. What area is the best for STR, or LTR, or have low tax rates, or have the best price to rent ratio.

Ika Sargeant · Answer

@Jacob Mitchell I think a baseline for an agent should be able to do an analysis for a property whether is a single home, multi unit or condo and then help determine what might be of the value to you the investor. To be able to explain simply how the property will make or not make money for you using data, understanding market or market trends. But determine what you want to buy or your business model so you can get an agent who can serve you well. Sometimes people want agents to be all things to them but we are not. Certainly many agents have a wealth of information at their tips, whether is giving you off market deal, vendors to work with. I think its helpful to be an investor but I certainly do not think an agent have to be an investor to be valuable. I work with agents because of their expertise in their markets, and yes a little help in analysis but you must establishes your habitat as an investor.

V.G Jason · Answer

Real estate agents that don't think just a beautiful house in a nice neighborhood is a great investment.

Some feedback of understanding the rental market of the areas, tenant quality. Having a network of construction people & lenders would help. Basically, if I came to you and said  hey, I'm so & so and am local. I'm looking for a fixer-upper in this price range  to attract these kinds of tenants you can be my one stop shop assuming my range is reasonable. Or if I'm an out of state investor, you can lead me to the areas that are getting the attention, know local property managers, and be able to facilitate.

The more we require you, the better you're doing.

What makes an agent "Investor Friendly"?

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