Realtors with no Investor Experience

Realtors with no Investor Experience

Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes

I had a great time meeting some new realtors and lenders from around NC today while we were out. Found some new lenders we never heard of and even connected with another investor who is doing his first flip. However, my husband and I had a quick and hilarious conversation with two realtors from the same company who obviously had no clue about NC Rental Market. They stated they had a property available that literally provided $0.00 in return. Now, I am no pro when it comes to analyzing but I know when a deal is not a good deal. We payed almost 75% less for a property 30-45 mins away for the same exact rent. I stated that we look for at least $100 per $10000. Of course we learned this from the one and only @Brandon Turner and have never purchased a property that gave a return under that amount. For some reason they chuckled and made faces like it was the most absurd thing they ever heard. The thing is we live in NC so I would assume any lender or realtor would know its not impossible. You can buy a property for 20k in excellent condition and rent it out for $750 2 hours away from the Triangle. Or, you can spend 100k and get the same rent because you want to say you bought a home in Raleigh. All our properties cash flow between $350 and $670. Again, you can find that anywhere outside of the Triangle. So how is it possible that a local realtor has no knowledge of the rental market within 45 minutes of where they do business but a realtor across the state can tell you the market trends for the past 6 months in your area? After a year of investing I realized that not all realtors are as knowledgeable as I thought. Just because they are a realtor doesn't mean they know a thing about real estate investing. I have met many that have never even met an investor. How odd when this place is crawling with them. Now that I think about all the advice I received from other investors, I understand why they would tell me to kick certain realtors to the curb. If a realtor thinks $100 per $10000 is absurd, we cannot do business. If a realtor does not know the rental market 30-45 minutes away, we cannot do business. If a realtor doesn't have a list, small or big, of investors they work with, we cannot do business. Do your homework and make sure they know the investment side of real estate. There is a huge difference in selling a home to a homeowner and selling a home to an investor. 

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y

@Nikki Grizzle  I am not offended in the least.. I love real estate... I was simply pointing out that buyers that are new do not understand how the industry works..

and it would benefit them to get educated how it works.. prior to thinking all agents are created equal and should know everything about all different aspects of real estate.

Just like PM in most states you must be licensed to do PM work.. I know owners of PM companies that's all they do they do NO transactional real estate.. but man do they know the landlord laws LOL.

And really good brokers that deal in investment properties usually have their go to buyers.. its tough for the average one off investor or beginner to break into those folks circles.

so you have to find that tweener.... but it helps to understand there are many niches of real estate and frankly the majority of the top producing agents simply do not deal in rental properties .. they sell high end resi.. almost all your 1 million plus earners are in the luxury real estate business or work with developers selling out new tracks of homes.. to homeowners.. My wife sold a little over 15 million last year and only one was a investment property... a off market duplex she sold to a bp member..:)

Investors are tough to work for.. when I owned my retail brokerages I would encourage my agents to pass on all the newbie investors as they are time sucks  can't make a decision unrealistic in what things should sell for etc.. so two sides of the coin.

Folks get into real estate sales for a number of reasons..   1  chance to make above average income

2. freedom of an independent contractor 

3. access to deals before they hit market 

4 .. retirement real estate something to do 

5.. Hubby is successful wife is board but loves HG TV and wants to sell houses.. ( many times these ladies end up your top producer and make a bunch of dough)  I know I certainly support my wifes efforts LOL... But she LOVES selling homes to homeowners.. she has no interest in working with investors... she hands those to me.. and by the time I vette them they run off usually...

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  • Real Estate Marketing Professional · Columbus, OH · Member since 2015 · 299 posts · 125 votes
    9y

    @Nikki Grizzle I think you put up a really good post for new investors...

    It's like any other professional service you get--you're not going to hire a domestic attorney to draft your will or an eye doctor to operate on your ACL. I'm not sure why newer investors sometimes think that all realtors know about investing. It might be because some realtors will tell you they know about investing because they want the business, planning to "cram for the test" (so to speak) as they go. I work for a brokerage that ONLY works with real estate investors and I always try to tell people here on BP to search for those types of agents and brokers. Sometimes local real estate associations will list them that way in directories, but ultimately, investors just need to know how to ask the right questions when they're looking for a realtor. 

  • Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes
    9y

    @Kim Younkin Exactly! It's a learning process. I assumed that all realtors were knowledgeable in every market, including the rental market when we first started. It's something that new investors learn over time. I've vetted dozens of realtors in different areas of our state and I could say only about 5 were worth doing business with. As a buy and hold investor that predominately buys tenant occupied homes, my realtor should know, or gather, the basic information we need to assess whether or not the property is even worth looking at.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Nikki Grizzle  yes as stated by @Kim Younkin  above your the one who is totally naïve in this equation.  90% of relators sell homes to home owners to live in.  They don't deal with tenants toilets and trash...

    if your want to buy rentals.. then you need a commercial broker not a retail resi broker your barking up the wrong tree...

    But when you find that specialist then you have to qualify yourself as a for real buyer.. most comemrical and specialist have little time for newbies or those trying to buy one rental...

    I think that is were many buyers who are starting out kind of get in between a rock and hard spot they are not really ready for prime time.. and of course not saying this about you per se but I see these real estate agent bashing threads and usually its the person writing the thread that does not understand how the real estate business actually works.

  • Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes
    9y

    @Jay Hinrichs I apologize if you feel offended but clearly you are not in the same category as the realtors I am describing. If you are on BiggerPockets then you have a clear understanding of the investor side of real estate. I am talking about the realtors who @Kim Younkin mentioned. The ones that have no experience but will gladly tell you that they can help you. Yes, we were naive because we were newbies and still in the learning process. Many newbies are and they will continue to be naive because they are getting involved in something new. Everything is a learning process and like many know who started out as newbie investors, the learning never stops. The intention of my post was to educate, not to chastise all realtors. I work with a few realtors in different areas that are absolutely amazing! They know us very well and have all information within a week or two, depending on the seller, about the property. At the end of the day we got the deal closed.Although you feel real estate agents should not be used, I would have to say I know many seasoned and retired investors who use real estate agents for rentals and not necessarily brokers. However, everyone has their own opinion based on their own beliefs or past experiences. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Nikki Grizzle  I am not offended in the least.. I love real estate... I was simply pointing out that buyers that are new do not understand how the industry works..

    and it would benefit them to get educated how it works.. prior to thinking all agents are created equal and should know everything about all different aspects of real estate.

    Just like PM in most states you must be licensed to do PM work.. I know owners of PM companies that's all they do they do NO transactional real estate.. but man do they know the landlord laws LOL.

    And really good brokers that deal in investment properties usually have their go to buyers.. its tough for the average one off investor or beginner to break into those folks circles.

    so you have to find that tweener.... but it helps to understand there are many niches of real estate and frankly the majority of the top producing agents simply do not deal in rental properties .. they sell high end resi.. almost all your 1 million plus earners are in the luxury real estate business or work with developers selling out new tracks of homes.. to homeowners.. My wife sold a little over 15 million last year and only one was a investment property... a off market duplex she sold to a bp member..:)

    Investors are tough to work for.. when I owned my retail brokerages I would encourage my agents to pass on all the newbie investors as they are time sucks  can't make a decision unrealistic in what things should sell for etc.. so two sides of the coin.

    Folks get into real estate sales for a number of reasons..   1  chance to make above average income

    2. freedom of an independent contractor 

    3. access to deals before they hit market 

    4 .. retirement real estate something to do 

    5.. Hubby is successful wife is board but loves HG TV and wants to sell houses.. ( many times these ladies end up your top producer and make a bunch of dough)  I know I certainly support my wifes efforts LOL... But she LOVES selling homes to homeowners.. she has no interest in working with investors... she hands those to me.. and by the time I vette them they run off usually...

  • Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes
    9y

    I just got thrown off by your comment but I do agree that investors need to educate themselves on the different aspects of real estate. Of course I say that now because I know better. But your average newbie who has no knowledge of real estate and doesn't know anyone in real estate is going to make that assumption. 

    There are many realtors here in NC that deal with rental properties. The last meeting I attended there were around 30 to 40 realtors from our area that solely worked with investors that did residential and not commercial. They aren't difficult to find. One thing I didn't do when I started was attending different real estate meetings. That would have been the smarter choice and I probably wouldn't have had such a horrible experience with random realtors and learned a lot more sooner than later.

    And yes in NC you have to have your real estate broker license to do any transactional real estate. Prior to investing I thought about it but realized I would have to go through the process of getting my license which I did not have time to do and was not willing to spend the money onf. So I started my own business checking on properties, minus transactional real estate, for out of state investors who collect their own rent, deposits and find their own tenants but still need other services.   

    I do believe that you are right about investors being hard to work for sometimes. I know many who walk in thinking they know everything because they read 2 real estate books or watched some videos. The issue is that many do not do their own research prior to inquiring or viewing the property. I will never send my realtors a property without first exploring the area, checking out the comps etc. Many newbie investors just send homes that look good, in their opinion, and expect the realtor to guide them in the right direction or make unrealistic offers. I hear tons of investor horror stories from realtors every week and so yes I can understand why newbies get the boot often.

  • Real Estate Marketing Professional · Columbus, OH · Member since 2015 · 299 posts · 125 votes
    9y

    Yep @Nikki Grizzle, there can be nightmares on both sides, that's for sure. It sounds like you're going to have a successful investment portfolio in your future with your work ethic! Best of luck to you and thanks for the post for new investors. 

  • Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes
    9y

    @Kim Younkin Thanks! We are planning on 30 by the end of the year and then taking a nice long break.

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