Finding good agents that work for you.

[Tina Lee]

Investing in real estate is a very popular thing! It is great for residual income and quick cash flow. I am part of a women's realtor group with top 10% agents.  Each week we discuss current issues that arise.  Last week we got in the conversation about investors. 2 of us, in our group, had the same investor telling us he was working with us, and having us write up low offers.  Now neither of us will put any further time in to that person. We get soooo many calls and texts (Average 3 a day) from investors that are looking for us to give them our off market properties in need of renovations. ("Hey this is your best friend."  "Hey looking for any off market properties you might have." "Make sure to call me for any great investments." "I am looking for an agent in AZ-theres a long conversation-I am an investor here") Being a realtor we build relationships.  Our loyalty and duty is to our clients.  It takes a lot of time and work to pull properties, get comps, drive to locations for someone who has no loyalty to us.  I highly recommend that you find a really good agent that will work for you, and help you with ANYTHING you need.  Not all agents respond quickly, get you the info you need, show you properties when you need, and know how to negotiate well...THEN its time to talk to a different agent. When you do mass texts and calls it frustrates the realtors more then them wanting to help you.  If we have properties, we call the investors we are working with regularly.  They become our priority.  We even talk amidst each other to see if someone has an investor that would be interested in that area/price range first.  Ask yourself if you can expect them to invest in you, if you aren't willing to invest in them.  This is a business, realtors are your employee.  How loyal do you want your employees of your other businesses to be? Quality or Quantity?  Find the quality and you wont need the quantity.

[Leo R.]

Here's my take on what makes for a good "investor-friendly" agent:

An investor friendly agent is an agent with investing experience--but what does that mean? ("investing experience" could mean experience with house hacking, flipping, STRs, syndication, or any of the other many investment strategies). An agent may be a total rockstar when it comes to BRRR'ing, but they may know nothing about STRs. So, you probably want an agent who has experience with the investment strategies you plan to pursue.

Also, IMO, successful investing requires an agent who 1) facilitates a strong due diligence process, and who 2) has the ability to see opportunities that other buyers miss. Because of this, my agents need to be highly experienced in assessing the potential problems of a property (my agents are often as good or better at spotting problems than the inspector!), and my agents also need to be able to envision the value-add opportunities the property presents.

I'll give you an example of each:

First, an example of an agent going all-in on due diligence, and saving me a ton of cash and headache: When I was an inexperienced investor, I found my "dream house", a property that I instantly fell in love with. I was ready to buy that place on the spot. However, while I was succumbing to shiny object syndrome (admiring the fancy new kitchen, new hardware, and beautifully tiled bathrooms), my agent was crawling around in the basement crawlspaces, collecting cobwebs and assessing the plumbing. The basement had some un-finished spaces, but most of the basement had just been beautifully re-finished with a mother in law apartment (which I was going to rent out). I tell my agent to write the offer, and he says "OK, but before we make an offer, you need to understand that the entire house has galvanized steel plumbing, which will fail. It may fail in 5 years, or it may fail in two weeks, but it will fail in the relatively near future. When that plumbing fails, you will need to demolish substantial portions of that brand new basement MIL apartment to replace the plumbing. It will cost you approximately $35k-55k to demolish that fancy new finish work in the basement, re-plumb the house, and then re-finish the basement again. Are you prepared to take that on?" (the answer was no, and although I was incredibly disappointed, we walked). Point being: my agent began the due diligence process the moment we walked into the property. He did not wait for the inspection to begin the due diligence process. ...and it saved me $35k-55k and a massive headache. A NON-investor friendly agent (or an agent looking to make a quick commission) would have said "yes, this house is SO CUTE! LET'S BUY IT!", and I would have ended up with a serious problem. That's the value of an agent who goes hard in the paint on due diligence.

Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird, so nobody wanted it...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner". The floorplan was arranged in a way that some non-load bearing walls could easily be removed, some new walls framed, and with about $40k, the house would be transformed from an un-appealing 2/1 that would lose $300/mo as a rental into a very appealing 4/2 that would cashflow about $500/mo (incl. the debt service for the rehab)... We bought the place and executed the plan--not only did it become a solid cashflower, the property value also increased by about $125k. It's critical to understand that the agent who recommended this rehab knew about building code, construction techniques, and the costs associated. For instance, he identified the load bearing walls when we walked the property, he understood where the existing plumbing was, and where new plumbing would need to go, he assessed where HVAC ducts were, and where new ducts would need to be routed, he understood the changes that would need to occur to the electrical system, etc., etc., and he understood the costs of all of those issues. Plenty of people (agents included) can come up with pie-in-the-sky ideas of how to change and improve a house, but few have a real understanding of what that work entails, what challenges will need to be overcome, and how long it will all take and what it will all cost. ...how did this agent know all this info? Because he had personally rehabbed many of his own properties--and had done that work himself, and also via GCs!

We'd all love to buy turn-key, A-grade, cashflowing and appreciating properties, but those properties are almost non-existent. Because we have an extremely challenging market (high prices, increasing rates, limited supply), being able to envision and execute value-add strategies that everyone else misses is often the only way to make a property succeed--so, having an agent who understands value-add strategies is a huge advantage!

Agents with this type of expertise are worth their weight in gold to an investor--especially when the investor is relatively new and inexperienced. This is true in most areas of life--we are most in need of an experienced coach when we're learning something new (particularly if what we're trying to learn is a high-stakes process like RE investing). The less experienced the investor is, the more experienced their team needs to be!

Good luck out there!