About 10 years ago I was seated across the settlement table from the listing agent and she mentioned that she was on her way from closing to buy a new car with her commission.<\/p>\r\n\r\n\r\n\r\n
I mentioned that I was going to invest in real estate with mine.<\/p>\r\n\r\n\r\n\r\n
That\u2019s when she wistfully told me that she wished she would have invested in real estate but she just never really understood how investing worked. All she had to show for her 20-plus years as a real estate agent was the house she lived in. And then she left the table and bought a brand new BMW.\u00a0<\/p>\r\n\r\n\r\n\r\n
That agent was in her 60\u2019s and still chasing deals. She had no plan in place for an exit strategy.<\/p>\r\n\r\n\r\n\r\n
She was trapped.<\/p>\r\n\r\n\r\n\r\n
I ran into her recently and she told me that she has since left the business. She had to sell her house and now lives in a rental.\u00a0<\/p>\r\n\r\n\r\n\r\n
It could have ended differently.<\/p>\r\n\r\n\r\n\r\n
You can make a great living selling real estate but the way to become wealthy is to invest in it.<\/p>\r\n\r\n\r\n\r\n
Investing in real estate takes money and knowledge. As a real estate agent, you have the keys to both right in your pocket.<\/p>\r\n\r\n\r\n\r\n
Q: Are you\u00a0 nervous about working with investors?\u00a0 They have a bad rap- like they are tire kickers or just want to lowball offers.\u00a0<\/p>\r\n\r\n\r\n\r\n
A: Investors are great though because they are repeat clients and can branch off into other businesses.<\/p>\r\n\r\n\r\n\r\n
Q: Are you afraid to talk to them because you think they speak a foreign language?<\/p>\r\n\r\n\r\n\r\n
A: It’s easy to learn the language they speak and understand how they think.<\/p>\r\n\r\n\r\n\r\n
Q: All of the investors already have real estate agents. How can I possibly compete?<\/p>\r\n\r\n\r\n\r\n
A: Everyone is a potential real estate investor. There is a limitless supply of clients for you.<\/p>\r\n\r\n\r\n\r\n
There are so many reasons why<\/em> you should work with real estate investors. You just have to get over the fear and learn how<\/em> to work with them.<\/p>\r\n\r\n\r\n\r\n Here are a few simple truths about people who invest in real estate.<\/p>\r\n\r\n\r\n\r\n They don’t care about the gleaming wood floors leading out to the secret garden oasis<\/em>. An investor is buying an asset<\/em>, not a home<\/em>.<\/p>\r\n\r\n\r\n\r\n They have an investment goal and your job is to figure out what it is.\u00a0<\/p>\r\n\r\n\r\n\r\n Lots of people think they want to become real estate investors so there is a deep pool full of potential clients.<\/p>\r\n\r\n\r\n\r\n When you meet someone and start discussing real estate investing, they will often become enticed and want to do it, but may remain silent because they don’t know how to invest in real estate.<\/p>\r\n\r\n\r\n\r\n Just like the mouse in the corner, they are more scared of us than we are of them.<\/p>\r\n\r\n\r\n\r\n Some real estate investors will come to you saying they want to buy\u00a0 property and when you ask them what they are looking for, they say, a deal.<\/em><\/p>\r\n\r\n\r\n\r\n That is your sign to get out your blackboard and start educating them.\u00a0<\/p>\r\n\r\n\r\n\r\n They don\u2019t know what they don\u2019t know.\u00a0<\/p>\r\n\r\n\r\n\r\n What is their objective? If they don\u2019t have the answer right away, it probably means they simply don\u2019t know, so pose this simple question.<\/p>\r\n\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n This is the real estate investing for creating wealth through passive income. This is a long term strategy for an income producing property. The investor purchases a property and the tenants pay rent which covers the mortgage and expenses.<\/p>\r\n\r\n\r\n\r\n There are tax benefits to owning investment property.<\/p>\r\n\r\n\r\n\r\n Tenants are buying this asset for them.<\/p>\r\n\r\n\r\n\r\n Build equity that they can leverage to purchase more property.<\/p>\r\n<\/div>\r\n<\/div>\r\n\r\n\r\n\r\n They have to be a landlord.<\/p>\r\n\r\n\r\n\r\n Maintenance and repairs to property.<\/p>\r\n\r\n\r\n\r\n Must find tenants.<\/p>\r\n\r\n\r\n\r\n Have to learn and comply with local laws and licensing regarding rentals.<\/p>\r\n\r\n\r\n\r\n <\/p>\r\n<\/div>\r\n<\/div>\r\n\r\n\r\n\r\n The strategy here is to find a property and add value to it and then sell it for more. The difference (minus any costs) is the investor’s profit.<\/p>\r\n\r\n\r\n\r\n This is used for cash injection. It is not a get rich quick scheme.<\/p>\r\n\r\n\r\n\r\n It is a day\u2019s work.<\/p>\r\n\r\n\r\n\r\n A job.<\/p>\r\n\r\n\r\n\r\n A project with a profit.\u00a0<\/p>\r\n\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n PROS:<\/p>\r\n\r\n\r\n\r\n Cash injection<\/p>\r\n\r\n\r\n\r\n Bring a house back to life.<\/p>\r\n\r\n\r\n\r\n Express your creative side.<\/p>\r\n\r\n\r\n\r\n Addend bonus for agent: Get a listing at the end!<\/p>\r\n<\/div>\r\n<\/div>\r\n\r\n\r\n\r\n CONS<\/p>\r\n\r\n\r\n\r\n Have to be a project manager (or hire one)<\/p>\r\n\r\n\r\n\r\n Carrying costs add up quickly.<\/p>\r\n\r\n\r\n\r\n High overhead and start up costs.<\/p>\r\n\r\n\r\n\r\n Taxed on gains.<\/p>\r\n<\/div>\r\n<\/div>\r\n\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n Once you understand how to categorize investors by strategy, you can then begin to help them focus on a goal. They will be more focused and they will know that you know what you are talking about.<\/p>\r\n\r\n\r\n\r\n Be able to work with both kinds of real estate investing strategies since neither is better or worse- just different.<\/p>\r\n\r\n\r\n\r\n Market conditions will often have an effect on investment strategy, so working with both will shield you from market fluctuations.<\/p>\r\n\r\n\r\n\r\n Once you educate them on their two choices, if they don’t pick one or can’t seem to get clarity, they may either not yet be ready for real estate investing or simply not serious about it. It is ok to weed out the people you know will run you around and waste your time.<\/p>\r\n\r\n\r\n\r\n Time is your most valuable asset, so choose wisely.<\/p>\r\n\r\n\r\n\r\n Guess what? Clients are everywhere! Remember that everyone is a potential real estate investor.<\/p>\r\n\r\n\r\n\r\n Understand the types of strategies so you end up talking about it naturally.<\/p>\r\n\r\n\r\n\r\n Just like other parts of your business where you sell to occupants, create hyper awareness by going out and looking at property. By getting familiar with what is on the market, spending time viewing properties and walking through neighborhoods, real estate investing will be on top of mind so it comes up naturally in your day when you talk to people.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\nThey Are Buying More than the Bricks<\/h2>\r\n\r\n\r\n\r\n
Don’t Be Scared of Real Estate Investors.<\/h2>\r\n\r\n\r\n\r\n
Ask them About their Goal.<\/h2>\r\n\r\n\r\n\r\n
Are you looking for cash flow, or a cash injection?<\/h2>\r\n\r\n\r\n\r\n
Cash Flow=Rent and Hold<\/h3>\r\n\r\n\r\n\r\n
PROS:<\/h4>\r\n\r\n\r\n\r\n
CONS:<\/h4>\r\n\r\n\r\n\r\n
Cash Injection- Renovate and Flip<\/h4>\r\n\r\n\r\n\r\n
Get Focused.<\/h2>\r\n\r\n\r\n\r\n
How to Find Real Estate Investor Clients<\/h2>\r\n\r\n\r\n\r\n