What Makes An Investor Agent

[Eric Fernwood]

In any large metro area, there are usually thousands of realtors. Each one attempts to distinguish themselves by making claims such as:

• “We are the best.”
• “I’ve been in business for X years.”
• “I sold xxx homes in the last year”
• “I have multiple designations.”
• etc.

Do any of the above claims distinguish them from other realtors? No. Moreover, these claims do not qualify them as investment realtors because they fail to provide what investors need. Investors purchase income streams, not real estate.

What makes an investor agent? In short, someone who can provide investors with what they need to succeed.

What Does an Investor Need?

Buying an income property requires far more skills and services than buying a home. Investors are looking for a solution including property identification and validation, inspections, renovation and management. If you and your team can provide these services, you become invaluable to investors.

Alternatively, if an investor works with a residential realtor, they will have to supply all the services and resources that the realtor does not provide.

Even the information an investor needs is not available from the only resource a realtor can provide, which is an MLS data sheet. See the table below which compares what is on an MLS data sheet and what an investor needs to evaluate a property.

Below is a high-level summary of the tasks an investor needs to accomplish. Each requires a unique set of skills.

• Identify potential investment properties
• Accurately estimate probable rent and time to rent
• Estimate ROI and cash flow
• If the candidate property does not meet the return goal, look for another one. Repeat until you find a good property
• Onsite evaluation and estimation of the renovation cost
• Making offers and closing escrow
• Oversee the renovation
• Market the property
• Screen potential tenants
• Manage the property long-term

Investors are usually high income individuals who have money, but no time. So, faced with the realities of working with a residential realtor and having to do all the above themselves, they usually choose not to invest in real estate. When they find an investor realtor who can provide the full range of services they need, they are quick to share with their friends and colleagues.

What An Investor Agent Should Provide

Below is a diagram showing the major solution components an investor requires and who, in the investor’s team, is responsible for delivery. Note that just because you (the investor agent) are responsible for a service, does not mean you will do the work. You are the team leader and manage the client relationship and deliverables.

If you can provide investors a solution, they will seek you out because no other realtor can. Once you establish yourself as an investment realtor, repeat business will become a significant part of your business. We’ve delivered over 510 investment properties, and our average client buys 2.8 properties. We do no marketing other than blogging. And, referrals from existing clients are our primary source of new clients. Also, over 90% of our clients live in other states or countries; we’ve never met 60% of our clients.

Summary

Investors do not buy houses. They buy income streams.

If you want to be an investor agent and not just another “me too” realtor, give your clients the information and services needed to acquire and operate a profitable rental property business.

[Garrett White]

@Eric Fernwood Great post! I've been an investor for ten years and recently became a realtor to help others on their REI journey. I love the way you highlighted the differences and opportunity an investor agent possesses!

@Kevin Walton You're absolutely right! My market is Durham, NC and I'm sure many cities have intricacies that out of state investors could easily miss. Having knowledgeable boots on the ground is priceless when making quick decisions in a competitive market.