Consultation for Real Estate Investor

[Account Closed]

Hello, I am a new agent (4 months licensed). I am looking for tips on how to set up a consultation with an investor client. I know that it is much different than a buyer/seller consultation. What questions should I ask? 

Backstory:

Yesterday a customer reached out to me via phone because they want me to work directly with their investor (who is also a Realtor) to close deals on multiple properties in the area. They have already found the properties that they are interested in. I am scheduling an in person consultation to get a better idea of what their needs are and to see what they would expect of me throughout this process. With me being a new agent, I have no idea what to ask or what to even look for with investors/investment properties. I have not yet scheduled a consultation before. This would be a first for me. 

[Christopher Jason Lloyd]

Hey!  Great Questions,

Like you said, understanding their expectations up front will be the best way to start the relationship.  I have always focused on them, their goals, their abilities and their buy box. There are many different strategies investors use to find what they consider a deal

1. Find out their strategy - How much cash flow/ROI/CAP are they looking for? Don't send a 4 Cap property to someone that only want's 8+ Cap. Quick way to lose your credibility. Some are more focused on location rather than return.

2. Verify proof of funds (you'll be surprised how many investors say "money isn't a problem" until after you have the contract and then it is suddenly a problem). If it's hard money or DSCR, find out the lender and verify they have a working relationship and they have verified funds. If conventional, ask for prequal.

3. Find out if they need a property manager if buy-and-hold - Have referrals ready if your firm doesn't offer this.

4. Find out if they are buying in an LLC or Personal Name, this has to do with financing. They need to have the appropriate financing for how they purchase ready. Sounds like this investor likely already has their ducks in a row with this - if they're buying multiple, you'll likely want to reach out to their lender to find out their DSCR requirements that way you know the parameters you should be looking in for your client. Also, most agents don't know what DSCR loans are, so be prepared to explain to the listing agent. Study up!

5. Find out if they are open to inheriting tenants - If so, are they open to inheriting problem tenants if that is the reason they can get a good deal?  I know investors that want nightmare tenants so they can use that as leverage to "take the pain away from the seller".  Some landlords only want vacant because they are super risk-averse.  If they want to inherit tenants, make sure you bring them a P&L, if the seller is unable to provide one, make the contract contingent on receiving one.  Also consider making the contract contingent on receiving estoppel certificates.  We do that on properties with limited information from the seller.  Some Listing agents/sellers are completely unprepared to sell tenant occupied property with a conveying lease and may just not have all the information because they haven't sold something tenant occupied before.