How real estate agents help investors


How real estate agents help investors boils down to creating a niche.

Read how to create your “Investor Friendly Agent” niche below.


Introduction to How Real Estate Agents Help Investors


According to the National Association of Realtors (NAR) and the Bigger Pockets real estate industry platform, nearly 7 million investors nationwide seek real property investments over the next 12 months.

According to Fortune Builders, most of these investors will continue working with the same agent if they provide value to them. Many successful investors buy and sell numerous properties every year. Their agents expect a steady stream of income.

Frankly, most real estate investors don’t like paying agent commissions. However, many don’t have the time or connections to find good deals. That’s how an agent helps real estate investors.

Too many online advisors and blogs claim that people can buy investment properties without using an agent. In some ways, it makes sense since making money in real estate requires cutting costs. Saving 3% (or more) on commissions pleases investors on a tight budget.

The following services provided by agents helps real estate investors:


Learn Real Estate Investors Language


You must learn how to speak like an investor.

Terms like 1031 Exchanges, CAP Rates, ROI, Net Present Value, and Cash-On-Cash Returns must become first-hand for you.


Providing Good Advice


While any agent provides advice about investments, it’s only the good ones who advise how to increase profits.

Make the first meeting with a new client seeking rentals or other real estate investments count. You must ask questions to familiarize yourself with their goals and objectives. Some investors only seek to buy and flip properties. Others desire to hold onto investments waiting for the best appreciation. Others wish to rent the properties to rely on the income.

Therefore, knowing that the investor wants to buy wholesale and sell to another investor, or to “Buy, Fix, and Flip”, or “Buy, Rehab, and Rent” lets you understand what matters.

In addition, knowing the investor’s timeline matters too. How many years does your investor want to hold the property?  Or, will each purchase be a quick flip or a hold for one year and then sell to pay lower capital gain tax?

Once you know the investor’s goals and objectives, you know what to look for.

On the other hand, the first meeting and afterward requires answering their questions. For instance, one asks, “What’s the best strategies to achieve my investment goals”. Since this is your first meeting, you should answer with, “Now that we met and I know your investment goals and objective, give me a little time to provide you with the best strategies”. Of course, during the promised timeline you must give your new client some good strategies.


Finding the Best Investment Properties


Your talent as a local market expert helps to identify the hot neighborhoods and potential growth areas.

Knowing your locations and finding the best investment properties requires a market analysis of comparables. In addition, you must provide an investment property analysis showing which properties’ prices are worthwhile.

The InvestmentPropertieInfo.com site provides great sources for learning how to “Accurately Estimate a Property’s Market Value”. This includes the “Three Common Methods to Estimate Property Values” along with the “Income Method of Estimating a Property’s Value”, and “How to Get Free Building Replacement Cost Estimates” to help estimate a property’s value.

To wrap it up, the above-mentioned article shows you how to, “Use an 8 Step Approach to Estimate a Property’s Current Market Value”.


Learning CAP Rate and ROI


Understanding the Capitalization Rate (CAP) and how to calculate a Return on Investment (ROI) becomes essential for finding good investment properties.

Read a very good article explaining CAP and ROI including their formulas to quickly learn about these important property investment calculations HERE.


Showing the Best Investment Properties


Don’t think of simply handing out an address of a potential investment property to your investors. You must preview the property. Then, show the property with the ability to point out features you know your investors like based on his/her goals and objectives.

Look at your showing as a presentation of why this property contains all the features your investor desires.


Negotiating Deals


After finding ideal investment properties, you must know how to negotiate investment deals. Totally different from negotiating home purchases.

The InvestmentPropertiesInfo.com site also teaches buyers the “Art of Negotiating Investment Property Deals”.  Some of their recommendations you read above. Also, requires the ability to “realize what a deal is worth” to either buy or walk away. They also make useful suggestions about how to work with real estate agents.

Learn the acceptable standards for reaching a consensus between the buyer and seller of investment properties. For example, common procedure dictates that the buyer pays survey costs while the seller pays for the title policy. Knowing these standards enables the parties to reach an agreement acceptable to all parties.


Recommending Professionals


Real estate investors don’t expect agents to know it all. But, maintaining the best connections with real estate professionals who can help your investor gains instant brownie points.

The ability to recommend top-notch real estate lawyers, tax experts, CPA’s, appraisers, mortgage brokers, and sources for private funding makes your services worthwhile.

Also, knowing reliable, best value contractors, handypersons, fixers, painters, clean-up crews, and other handy resources for developing or rehabs increases your value.


Become an Investor Friendly Agent


Once you conquer all the recommendations above, it’s time to promote yourself as an “Investor Friendly Agent”. Put that phrase on your business cards.

Join real estate investors groups online and locally. Speak up at meetings by offering “investor friendly” suggestions and resources. Chat on investor forums and social media platforms. Make recommendations on investor forums. Answer forum questions. Post comments on investor topics blogs.


How Real Estate Agents Help Investors Conclusion


How real estate agents help investors requires becoming an investments specialist.

You need a proper real estate investments education in order to help investors. This education includes learning how to conduct a market analysis specifically for rentals and other investment properties. In addition, you must learn how to conduct an investment property analysis. This includes CAP and ROI analysis.

In essence, the above analysis methods give you the basic real estate metrics for identifying the best investment properties.

Then, you must find the best investment properties based on your investor’s goals and objectives. Showing the best properties explaining why their features meet your client’s goals and objective.

Finally, you negotiate with sellers using the acceptable standards for reaching a consensus between the seller and your client.

In addition, after the negotiation successfully completes, you need to recommend top-notch real estate professionals to help your investor.

Before starting your “Investor Friendly Agent” niche why not consider joining a 100% commission brokerage in the greater San Diego area?

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Steven Rich, MBA – Guest Blogger


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