How To Be Investor Friendly (Not just another annoying realtor)

We all know that successful business is based on relationships and the real estate industry is no exception to that rule. I meet agents and brokers through networks who claim to be investor friendly and while this sounds great I have my doubts the majority even know what the phrase "investor friendly" even means.

I started asking folks what their definition of “investor friendly” meant and I was not surprised to hear that most of them where just looking to make a sale. PLEASE hear me; this is not what investor’s need, another agent setting up a client portal on the MLS.

I was an investor long before I got my realtors license, now that I can see both sides of the coin I want to offer some advice to agents who would like to call themselves “investor friendly”

Working with investors on any aspect of a deal is considered a partnership. Establishing trust and communication is paramount in any business relationship and/or transaction. This is something you won’t necessarily hear from everyone at your broker’s office but be willing to work with your client for FREE. Let me explain.

If you are working with an investor and you don’t know how to decipher a good deal then please just press pause right here, right now. Here is what you need to know to be successful. Know the numbers, know your clients comfort level, be creative with value-add and creative financing and know how to negotiate. This is a service you will offer for free. Your commission is separate. Add value first, then money will flow.

Numbers

When representing a buyer, I cannot express how important it is to know the numbers. Knowing how to run the numbers, understanding the market cap rate vs the property cap rate, calculating realistic and conservative NOI (Net Operating Income) will make you very valuable to your client. If a deal doesn’t make sense don’t email it to your client and say “what do you think about this”? Don’t be afraid to tell your client that this deal isn’t for them. Be confident!

Comfort Level

I work with investors in different markets who all have different criteria. I once met this individual who after introductory found out that I was an investor. The first thing he said was, I have this listing over in such n such, give me your email and I'll send it to you. Umm, No. Get to know your client. Don’t rush in with all your listings. Serious investors usually have a market that they are already an expert it and will have a specific criteria or area of focus. New qualified (has capital) investors may need to be guided and you don’t want to be responsible for handing them a bad deal. Be more concerned about your client’s bottom line then you a are with your commission check. Trust me, you WILL make money.

Be Creative

Be creative with value-add and financing options. You know those properties that sit around on Loopnet or the MLS for 6 months to a year? Not all of those are bad deals. There are opportunities for value-add that can make the purchase make sense. Thinking outside the box will set you apart and make you a CLOSER. Build relationships lenders (banks, hard money, and private money) and get familiar with creative financing options. Short sales and foreclosures can be great deals for your client. Take some time to read up on the process.

Negotiate

This one goes hand in hand with all of the others. Once you are good with the numbers you position yourself to advocate on behalf of your client. It’s cliché but true, investors buy low and sell high. Negotiating the lowest price point possible on property to be rehabbed could very will lead to the second sale once the investor has completed construction. Now you have the opportunity to make a commission on the retail of the property. Negotiation is a skillset that you gain through reading and experience.

Best of luck on your next deal!