How can Realtors help investors to see the bigger picture?

[Michael D'Egidio]

Greetings BP Brethren!

I'm newer to the real estate business, I've been a Realtor now for the last 7 months. I've closed 4 deals, have 2 current listings and a whirlpool vortex of buyers... and half of them... investors. *sigh* haha just teasing. I do love me some investors. ;-)

I do love the flip sides of the transactions and really have zero issues when it comes to working with investors. It's a fantastic niche, but I believe there are some that just aren't able to grasp the actuality of the game. I have 2 current investors that haven't divulged how much they have really done in investing other than show me their certificates of organization and their pre-qual finance statements. I really do believe it's going to be their first deal a piece. I don't want to belittle them by straight calling them out, I have done the leg work and research and they are both different in terms of goals, strategies and areas, but I really find myself at a cross roads when the real information needs to be divulged. How can I best explain these issues?

1. Pricing: Just because it's a bank owned or short sale doesn't mean they're going to give the thing away. If you are looking at a basic home that's listed below market value I wouldn't expect an offer to be given more than 15-20% below current value. If the place isn't riddled with holes, has working heating and cooling components, you're not going to get by writing an offer at HALF price... and then exhale with frustration like you're super surprised... I mean, come on. you need to put some skin in the game and realize each and every flip isn't going to net you 50k...

2. Earnest Money Complaints: Many REO's are now asking for certified funds with the copy ahead of time submitted with the offer... I do not see the logic in arguing the basic process and requirements with the bank's stipulations. they own the damn thing. If they want a copy of the check up front, so be it. AND while we're at it investor sassy pants, it'd be highly recommended that you put more than the absolute bare minimum down as earnest money. let's say at LEAST 1-2% respectively. It is also not uncommon to see on cash offers banks asking for 10% down as earnest money. don't get your panties in a twist. this is what we're dealing with every day.

3. Inspections: Ok, common cliche is going to get thrown... takes money to make money... don't get cheap with the inspections. in the long run a $500 inspection that lets you out of a contract is going to save you 10k in useless repairs or damages you didn't know about before. Don't cry. it's a contact sport. get a helmet.

Please let me know if this is what a lot of Realtors are seeing from potential investors, and perhaps some help on the investor's side is what they find most helpful about having a good realtor on their team, and hopefully it's more than just the necessary evil to write up a contract. lol. happy investing folks! thanks for sticking through my rant.

Mike