How To Find A Real Estate Agent For Investment Properties
Chances are good that if you want to become a real estate investor, you’ve done extensive research on the types of investment properties available. You’ve probably also learned the lingo, and even researched some actual properties. Now what? It’s time to find a real estate agent that understands investment properties. Of course, you can find investment property on your own, but a good realtor will bring you more deals than you’ll ever find on your own, short of you sourcing real estate deals full-time.
You’ll likely reach out to some real estate agents to get the ball rolling. After all, any agent will have inside knowledge on the local rental market and off-market properties, right? Quickly, you’ll discover that most real estate agents aren’t familiar with investment properties at all and rarely have “pocket” listings.
Not every agent is cut from the same cloth. Finding an investor-friendly realtor is absolutely essential before stepping into the world of real estate investment. That means someone who not only knows the local rental market and the neighborhoods, but also the backstory behind a good ROI.
It’s not just about knowing what’s available on the market, but also sourcing off-market deals. It’s someone who has invested in real estate in the past (maybe) or at least understands cash on cash return. Ideally, a real estate agent for investment property and knows what kind of real estate investments their best and most comfortable with too, since every agent has a niche.
You might be asking, so where do I find these specialized realtors who can find me an investment property? Here are some handy places and key questions to ask to make sure you end up with the perfect investor-friendly realtor.
Where and How to Find Them An Investor Friendly Realtor
When looking for an investor-friendly realtor, the best method, as with most things, is word of mouth. Referrals allow you to access someone who is already vetted by a trusted source. In fact, the majority of investor-friendly realtors are passed along this way. Ask your personal contacts if they can recommend anyone. You can try asking your property manager, contractors or banker. Most people are happy to pass along the names of realtors who do a great job.
If you have access to local meetups, or ideally local real estate investment groups, those can be a great place to ask around for names. There are likely to be many people there with excellent contacts, although they may not always want to share their favorites.
If your area is sparse on meet ups, or you just haven’t been able to make the timing work yet, you can skip the networking at Starbucks and ask your fellow investors! Find out who is buying real estate investment properties in your area and ask them who they’d recommend. There is no substitute for a recommendation from a happy investor that successfully closed a deal with an investor-friendly agent.
Another great place to mine information about potential real estate agents is the forums on Biggerpockets.com. There are a ton of investors around the country on the BP forums with a wealth of knowledge. Simply ask for location-specific investor-friendly realtors and the community can definitely help you out.
No matter which way you find your realtor, don’t forget to look at consumer reviews. This is added social proof that the person you’ve been referred to is worth your time and energy. And always check references.
What An Investor-Friendly Realtor Needs to Know
A really good investment-friendly realtor will have knowledge and experience that will help you make a smart choice. There are several questions you can ask them to get a good feel for how comfortable they are in this role.
Do they invest in real estate now, or have they in the past?
If they invest heavily now, they are a bad choice since they are your competition. There would be an ethical dilemma if they happened upon a good deal – should they scoop it up or give it to you? And would they even have time for you if they are investing full-time for themselves? Someone who has invested in the past or invests sporadically is the best choice as they understand what investors need, without the temptation of keeping the best deals for themselves. Someone that does not invest themselves but understands real estate investing is also a good choice, though they would really need to nail the rest of the questions to prove they understand it deeply.
Have they worked with investors before?
This is truly the most important thing! Ask them how many investors they’ve worked with and what types of properties they’re most comfortable handling. This is a time where you don’t want to be afraid to ask for specifics. If they say they work with everyone, that’s not the answer you’re looking for. Get a straight answer on how many investors they’ve helped over that last year. .
Do they understand the numbers?
One of the most important aspects of using an investment-friendly realtor is their ability to understand the numbers. You will be taking their advice to calculate your returns, which is a keystone in your investment deal. Do they understand cap rates? Cash flow? Local rental rates? Try to get a feel for how much they understand the concepts as well as how much they understand it at a local level.
Do they understand the market?
Beyond knowing the local rental rates, are they well versed in the rental market? Do they understand market shifts and are they able to predict them? Do they have local knowledge, such as attractions, amenities, dining, and shopping? What about parking, public transit, and schools? Zoning changes or upcoming developments? An investor-friendly realtor will be able to share their knowledge of the local market in a way that helps you find the best investment real estate. You will likely rely on their expertise to help calculate your returns, so it’s crucial they have extensive and relevant knowledge with this.
What types of properties do they typically deal with?
This is important to understand when considering what type of real estate you want to invest in. You want your realtors’ expertise to line up with the type of investment you’re making. Are they familiar with REO, foreclosures, HUD, and short sale properties? Do they work with fix and flips? Outline your criteria and the type of investment you want, and then test their knowledge in this area. But be specific – you aren’t going to find a real estate agent that’s an expert in every neighborhood and every property type. It’s much easier to find an investor-friendly real estate agent if the investor actually knows what they are looking for! Narrow down your neighborhood, property type, and price before you start searching for that perfect real estate agent.
Do they have access to off-market listings?
You will undoubtedly have access to better deals if your realtor has access to listings that are not on the general market. This is also another reason it’s important your realtor isn’t a prolific investor themselves. While this isn’t a complete deal-breaker, it is a significant advantage to you if they do.
Depending on the place you live, another relevant question to ask might be whether or not there are any areas they may exclude. There are some places that agents won’t want to go. Finding out their personal parameters might be useful if you live in big cities or very spread out rural areas.
Traits of A Great Investor Friendly Realtor
Once you’ve established that they know the market, the numbers and have worked with investors before, you can move on to verifying they have the traits that make them a super investor-friendly realtor. Here are some questions you may ask them personally, or ask the person who referred them to you.
How prompt are they? They have got to be fast. Do they call or show up on time? Do they return calls and emails quickly? Are they able to meet or show houses the same-day? Your agent needs to be lightning-fast to get good deals, so confirming that they are not only dedicated to investors but are on the ball when it comes to timing is vital. Investment real estate sometimes takes a lot of back and forth to nail down a deal and the slow agent will not win the deal.
Is your real estate agent willing to write lots of offers? Give your potential real estate agent a head up that you will be writing lots of offers and maybe lowball offers at that. If the agent rolls their eyes at this, it’s time to move on. Your realtor has to be OK with writing lots of offers that get rejected and doing it over and over again. They need to be completely comfortable sending out low offers that might be rejected.
Do they know what they are good at? Ask them about their latest investment property deal – did they feel it went well? Can they tell you about their best and worst deals? These may seem like tough questions, however, if you do the work now, this could be a long-lasting beneficial relationship. A real estate agent with insight into their strengths and weaknesses is a lot easier to work with than an agent that is certain they are good at everything!
Are they full-time or part-time? This goes hand-in-hand with being prompt. You do not want someone that just dabbles in real estate. A full-time agent is the best choice because you know that they take their profession seriously, and always have their finger on the pulse.
Are they comfortable negotiating? Make sure your agent can be persistent within the same deal without becoming uncomfortable and walking away.
Are they honest? Do they have their own core values? When considering personal traits, ethics and integrity are number one. Run away from anyone that lies! You do not have the time or inclination to decipher what’s true or not. You want someone who is honest and transparent in their process and in their dealings with others.
Do they have a backup person if they’re sick? Life happens, as you well know, so inquire as to whether they have a partnership with other agents who can step in on their behalf when they need a personal or sick day. Investment properties move quickly and you need continuous access to someone.
Traits An Investor-Friendly Realtor Does NOT Need
Do they know everything about real estate investing? You are the investor – not the real estate agent. Yes, they need a basic understanding of what you are trying to accomplish and how the numbers work, but they do not need to be a real estate investment guru. That’s your job.
Find An Investor-Friendly Realtor – It’s Worth it!
Finding an investor-friendly realtor takes some work up front, but it more than pays off in the end. Making sure they know the market and the numbers and have worked with investors before. Interview your potential agent with pointed questions to test their knowledge. You need to understand what you’re doing since it’s your money, but you should be able to rely on your real estate agent’s advice as well.
A great investor-friendly realtor should be like a partner. They will help you land the best investment real estate on (or off) the market. And once you find that magical investor-friendly realtor, don’t squawk about paying them what they are worth! They provide a premium service and are a valuable resource to you. Paying a great realtor for their time and knowledge is no different than paying all the other players on your team, like your lawyer or property manager. Treat your agent fairly and they will remember you when that great deal pulls through!
You’ve got questions, I’ve got answers. Reach me at firstname.lastname@example.org!