Realtor working with Investor talking to Home Owners

[Mark Towey]

Hello,

I am a fairly new real estate agent and want to get started in the real estate investing world as well but I just need some advice going in. I recently got connected with a local investor and he let me know to find him properties that needed fixing up or are distressed and to connect him with those properties for him to purchase which is great. I know that I need to obviously get connected with the home owners of these types of properties and give them the right pitch to want to work with me to get the home off their hands and money in their pockets. I am also aware that the re-sell value of the home is very important and needs to be taken into consideration when thinking about giving the home information off to my investor. Items like- location, condition, surrounding homes, crime rate in the area, home prices of surrounding homes need to be thought of. I am eager to get started but I feel like I am either missing something on what to look for and are unsure exactly what to say to those homeowners to get them interested in selling? How should I handle the relationships in these transactions as well, if the seller is willing to have me represent them and pay my commissions then great but if they don't want that and just want me to provide a buyer then should I charge my investor a buyers agency fee for finding them the deal? Any feedback on these questions would be greatly appreciated, hope to learn more on this and get after it. 

[Patricia Steiner]

Just a few questions for you...

1. How many realtors is that investor working with currently?

2.  What is his budget for purchasing and renovating?

3. How will he acquire the properties? Do you have a POF or prequal?

4.  How will you get paid?  If you approach a homeowner who hasn't listed the property, they're under no obligation to pay you a commission.  It doesn't sound like the buyer has offered to do so.  

As a fairly new realtor, this is a strategy that could burn up a lot of time and leave you with a whole lot of nothing.  I know you know that a lot of people living in run-down houses arent' the owners right?  And, some of those types of owners are loving the cash flow they're receiving on their slums.  You don't become an 'investor realtor' by acquiring an investor. You have to know that side of the business and that only comes with a lot more knowledge in analysis, markets, renovation costs, scope of works and more.  I recommend that you select a market and make yourself well-known in it.  Know the business.  Protect yourself (you would be surprised how many realtors do a whole lot of work for someone and then don't get paid...happens every day).  Again, start by making yourself the most visible and knowledgeable real estate professional in your market. You do know I still study a couple of hours every day as this is one complex and changing industry.  I hope you'll rethink the opportunity, shore it up, and approach it from a different angle.