5 Tips for Working with Investors
Looking for an additional approach to expand your money-making potential? How about investors? When you’re working with investors, it’s possible to close more deals and make more money while working with fewer clients. Plus, there’re great opportunities for referrals and repeat business. Investors are motivated and focused on specific goals. They likely have more knowledge of the real estate industry and the buying/selling process than your usual residential buyers and sellers. But they still need the advice and expertise of an experienced real estate agent to boost their ventures. Investors looking for real estate agents want an organized professional who’s familiar with investor types and strategies, basic formulas, creative financing, technology and social media, and deal analysis. If you’ve never worked with real estate investors before, read on for 5 tips.
- Know Your Investor
To be investor-friendly you need to know where they’re coming from. Know their preferred property type and strategy. An investor will be interested in a specific niche or type of property like apartment buildings and single family homes. They are also focused on a strategy to make money like wholesaling or flipping. An investor may be into multiple strategies and niches, but if you know which they are partial to, you can better predict how they’ll view a deal.
- Listen, Listen, Listen
Listen when they’re telling you what they are looking for. Investors aren’t as vague as non-investors; they know what they want and they will tell you. They probably have a specific formula when evaluating real estate for profit. Listen carefully when they tell you their niches, strategies, processes, and formula so later you can establish a system. Be available by phone, email, and text and respond quickly. Remember to let the investor make the decisions. You offer advice, but let them analyze your suggestions and the property and come to their own decisions.
- Build Efficient Systems
You’ll need effective systems to handle the increased volume of offers and transactions. Once you know what interests the investor (cap rate, income potential, neighborhood), set up automatic emails to get him the information he needs quickly. Set up a system to speed up the offer process.
- Prepare for Speed
Another bigger difference is the speed and quantity of the deals. Investors do dozens, even hundreds, of deals a year. They are buying and selling quickly. In a competitive market with lots of offers flying around, a great property can be snatched up in the blink of an eye. Investors want to make lots of offers, some ridiculous, because they see it as a numbers game: they make 10 offers to get one deal. When you’re first interviewing the investor, ask how many offers she typically makes. This is where the systems and prep work are crucial. If you know your investor and use your systems, you can quickly juggle multiple offers and deals without having to meet with the investor.
- Think Like an Investor
Keep in mind that investors have different goals and priorities than a first-time buyer looking for a house to raise a family. Emotion is not as big a factor; numbers are king. Learn how each investor likes to make offers and the formula he uses, for example “all cash, X days close, X day inspection.” Feed this into your offer system and streamline your processes. Learn about common investment strategies, methods, processes, and formulas. Memorize all the lingo. Review how to calculate cash flow, offer prices, expenses, and after repair value (ARV). Offers and deals will progress faster when you know the relevant investing concepts and formulas and use efficient systems. When you work with investors, you become part of a team. You have to be available with answers so investors can make quick decisions. You can see how strong knowledge of the ins and outs of real estate processes, concepts, and markets can help you become a top real estate agent. One way to do that is with consistent professional development and training. You’re a busy agent with little time to sit in classrooms. Luckily, all you have to do is click over to 360training.com and, in a matter of minutes, you’re starting your real estate continuing education and expanding your knowledge. Sources: https://www.biggerpockets.com/renewsblog/2013/08/24/real-estate-agents-working-with-investors/#5 http://houseflippinghq.com/working-real-estate-agents-make-offers-houses/
