Want to become the best real estate agent? Start working with investors! Real estate investors can add great value and benefits to your real estate agent career.
For a real estate investor, a strong agent is the most important member of his/her team. Likewise, a strong investor should be an important member of your team as an agent. In fact, investors might be the best leads or clients you could ask for as they:
- Buy and sell multiple properties faster
- Work with the same agent to do so
- Are less emotional as they’re not looking for a house to live in
- Have a better idea of how real estate transactions work
- Are great sources of referrals
What’s best is that there’s a lot of them! Working with even just a single investor can help you profit from multiple closings and gives you a steady stream of income, all while working with a professional and building a prosperous relationship.
However, working with real estate investors is not like working with homebuyers and investors can be demanding and picky when choosing an agent. So, how can you be the best real estate agent that investors turn to? This complete guide will help you be just that.
To increase your visibility to real estate investors, claim your free agent profile at Mashvisor.
1) Think Like a Real Estate Investor
If you want to be a real estate investment agent, you have to think like investors do, which is different from your typical homebuyer. You don’t need to know everything about real estate investing, but you should know the fundamentals. You’ll often hear investors talk about things like ROI, cap rate, cash on cash return, internal rate of return, NPV (net present value), 1031 exchange, etc. Your knowledge should be more than just knowing where to find a property for sale or negotiating offers with buyers and sellers.
Of course, it’s important to have these skills but, ultimately, the best real estate agent for investors is one who understands them and what they’re looking for. In addition, time is money for investors. They want to buy and close deals faster, they want answers right away, and they want their paperwork done quickly. Thus, a successful real estate investment agent acts quickly or has a team available to do a first-rate job.
2) Understand Their Niche and Strategy
By niche, we mean the type of investment property your client looks for (single-family homes, multi-family homes, condos, etc.). The strategy is the way the real estate investor makes money (buy-and-hold, fix-and-flipping, or house wholesaling). As a real estate investment agent, it’s important to understand what type of investing your leads do, their goals, and how they view deals.
For example, let’s say your real estate investor client is a flipper. Essentially, the types of deals your client expects you to find are houses that need cosmetic rehab and can be bought for a discounted price. In addition, the best real estate agent for a flipper knows how to estimate the property’s ARV (after repair value) and works fast because speed is important for a successful fix-and-flip investment property.
If your client is a wholesaler or a landlord, on the other hand, their expectations and requirements will be different. So, make sure you understand what type of real estate investor you’re working with to help them achieve their goals. This will help you create a profitable relationship with your investor clients and figure out how to meet their expectations, thus making you the best real estate agent they could turn to.
3) Do the Math
Successful real estate investors make calculated investment decisions. Their ultimate goal is to buy a property that will make money and bring a good ROI. So, you better believe they’re going to ask you to provide numbers that prove a certain property is a good investment. As a result, real estate investment agents need to understand the different metrics used to analyze the profitability of properties and the right tools to calculate their returns.
For example, a real estate investor would be interested in knowing the cap rate of a property. Another investor might ask you to calculate the rental income and expenses he/she can expect to determine the property’s cash flow. The best real estate agent knows how to evaluate an investment property in order to find the best deals for his/her investor.
Moreover, you might want to use a tool called the Investment Property Calculator. Though designed for property investors, it’s also useful for a real estate investment agent. This tool does all the calculations required to determine the profitability of an investment property like its cap rate, cash on cash return, cash flow, and more. If your investor client doesn’t already use one, you can use it to your advantage by doing the math and presenting calculated data.
4) Present Listings the Proper Way
Like we said earlier, working with investors is not like working with homebuyers. This means that what attracts a real estate investor to an investment property is different from what attracts a homebuyer or owner-occupant to a residential property. To become the best real estate agent for investors, you must understand what they’re really looking for in a property.
While owner-occupants are looking for their dream home, investors look at properties in a completely different way. They don’t care about the existing paint or carpet colors. They care if the walls need repainting, or if the bathroom needs updating and, most importantly, how much it’ll cost. So, don’t give investors a 30-page glossy presentation binder – do the math and show them real numbers! For example, instead of saying “This property is a perfect fit for a family,” say “This property could generate $300 per month in passive cash flow,” or give them the after repair value of the house.
5) Stay in Touch with Them
Successful real estate agents know just how important it is to stay in touch with past and current clients. To truly be your client’s best real estate agent and keep them coming back to you as well as referring others to you, you have to stay in their lives past the transaction. This applies to any agent whether working with homebuyer clients or investor clients. Here are some ways to stay connected with clients:
- Send handwritten cards around the holidays
- Call them a few days after closing the deal
- Email announcements, new listings, or interesting articles related to real estate investing
- Host events or seminars to allow your clients to meet and engage
Mashvisor’s Agent Dashboard will help you stay in touch with your clients and leads efficiently through CRM (Customer Relationship Management). You can upload your own leads and contacts, filter them by the city, state, or the type of property they’re looking for, and see their likelihood of closing a sale. In addition, you’ll be able to send out emails, log calls, texts, or notes to easily stay connected with them. This is a unique feature for real estate investment agents who are subscribed to Mashvisor. To get access to our agent dashboard, schedule a demo.
6) Help Them With Investment Finances
One benefit of being a real estate investment agent is that investors typically pay all cash when buying a property or, at least, they have their finances figured out. However, assume you’re working with a beginner real estate investor who’s buying his/her first investment property. In this case, your client may not know which financing method to go for: all cash, mortgage loans, private loans, rehab loans, etc.
If you want your leads to believe you’re the best real estate agent, simply help them out. Teach them about these types of loans, connect them with your favorite lender, help them get pre-approved, and they’ll turn to you as their financing hero!
7) Teach Them About the Market
A real estate investor looks for an agent who is experienced and knowledgeable. Thus, once you start to think like an investor and understand your clients’ strategies and goals, show them your knowledge of the local real estate market. This will further establish your credibility to your clients and gives them a reason to trust you with their investment decisions.
Once again, if you’re working with beginner investors, they probably don’t know enough about the real estate market. They might have heard how real estate is the best way to build wealth and financial independence and decided to go for it. For such investors, the best real estate agent is someone who they look at as a mentor. So, educate them about the best neighborhoods to invest in, up-and-coming areas, house price trends, the job market, and what to expect before entering the housing market.
The Bottom Line
To sum up, working with real estate investors is a great move to boost your agent career as they are professional clients, close more deals, and can be a source of steady income. Follow these tips to become a successful real estate investment agent and end up with happy clients. To find leads that invest in real estate, make sure to sign up with Mashvisor as an agent and we’ll pass along a certain number of qualified leads in a specified time period, depending on the plan you choose.
To learn more about our agent program and how we’ll help you be the best real estate agent and increase your client base, click here or schedule a demo!