As a Real Estate Professional, Investor, Instructor, and Coach, there is one thing that continues to challenge me, why aren’t more Real Estate Agents and Brokers focusing on making successful Real Estate Investors their clients? The following article will try to highlight this opportunity and offer some suggestions on how to align yourself with Investors and grow your business.
Why Work With Investors?
– Investors are much more focused on the types of property they will purchase than end users, if it meets their investment criteria, they will usually buy it. You will not show them every house in town and still not get an offer!
– Unlike the end user who may only be looking for a new home every 3-7 years or longer, active Investors typically will buy multiple properties each year or even per month! If you do a good job for them, they will continue to come back over and over again which means to you a potentially endless commission income stream. In addition, they typically have a significant network of other Investors they could align you with.
– Most Investors will be presenting all cash offers on the properties they are interested in, so any mortgaging issues are not a concern
– You can leverage off of their experience if you want to consider investing for yourself
– Regardless of the economic conditions, successful Real Estate Investors, are busy in each of the four market cycles. Aligning yourself to Investors can provide you with a model that will sustain you during difficult times and provide explosive results during good times.
How Can Real Estate Professionals Prepare to Work with Real Estate Investors?
This is an area where many RE Professionals can use some improvement. Savvy and successful Investors do not have the time or desire to work with anyone who doesn’t understand their business model and in speaking with thousands of Investors coupled with my over 30 years of investment experience, this is a big problem. Here are a few things to consider as you prepare yourself to work with Investors
– Generate a Business Plan that will help create the foundation of your journey. You may want to consider aligning yourself with Coaches and Mentors to help guide you through this process
– Consider becoming a Buyer’s Agent and Buyers Agent Certified, this is a critical item for many Investors; they want to make sure they have someone on their team who will be able to negotiate outstanding offers on their behalf
– Get your skills honed, you need to take stock on your current skill set and determine where the shortfall may be. Once the skill deficiency has been identified, you should implement an action plan to mitigate it. There are many options available to you for your skill development plans. What Will You Need From Your Investors? The following is a high level checklist of what you should expect from your Investors
– Proof of Funds. Like your retail buyers, you would never start showing them properties until you have verified they are qualified borrowers. You should handle Investors the same way. In addition to the standard pre-qualification or pre-approval documents, since many Investors will be paying cash, you will need to get a bank statement or other documents showing where the capital is coming from. Be cautious on any capital source like a 401K Loan in process because there is no guarantee that there will be an approval. Tembusu Grand