Thanks to the success of several hit TV shows and the rebound of the nation’s housing market, interest in real estate investing — primarily flipping houses — is the highest it’s been in nearly a decade.
For real estate professionals, this provides a unique opportunity to build profitable long-term relationships by becoming an indispensable member of the investor’s team.
1. Know the area
Of course, you know the area — what good broker or agent doesn’t? However, the truth is that the qualities of a neighborhood that matter to real estate investors are not always the same as those that matter to traditional buyers and sellers.
Investors rely heavily on comparable listings to determine what they can expect for an after repair value (ARV) and what stylistic choices should be made to better cater to local area buyers.
In addition, investors will look to you for information regarding the average time on market for comparable properties in the area. A trusted, no-nonsense answer is incredibly valuable as it will help your client plan for the variable soft costs that come along with having to carry the property longer.
The right answer in this situation could make the difference between your client making money or not.
2. Have a trusted team at the ready
Every agent relishes the opportunity to be your client’s go-to source when they’re in need. Keep an eye out for trustworthy local vendors who could make up an investor’s support team.
For example, most successful flipping teams need a good general contractor, attorney and even a lender. Open up your network to your clients, and they’ll reward you with their loyalty — and the commissions that come with it.
3. Bring deals to the table
The quickest way to your clients’ heart is through their wallet. More specifically, if you can contribute to building their wealth by becoming a source of well-priced properties for them to invest in, you’ve just become their new best friend.
One of the biggest concerns we hear from newer investors is that they struggle to find enough properties that could make a profitable deal. Sure, they could scour sites such as Zillow and Trulia, attend auctions and even drive the neighborhood looking for foreclosures — but most simply don’t have the time.
Most investors have a full-time job, and if they don’t, they spend all of their time working on their investments. Agents can address a major pain point for their clients by taking a more active approach to identifying distressed properties, quickly vetting their potential and funneling them to the investor.
On the other hand, we know time is money. Successful real estate pros will only spend so much time researching deals for clients they know little about unless they are assured of the client’s qualifications.
Utilize your industry network to help create a funnel of qualified investors. For example, investors who have taken steps to secure financing by requesting a proof of funds letter from a firm are more likely to be serious about proceeding on a deal you present to them.
4. Know your quick lenders well
As a real estate professional, your investor clients will rely on you to move equally as fast or risk losing the deal.
Being the agent for an investment deal often requires rapid offer and counter-offer negotiations, unorthodox circumstances and around-the-clock availability at a moment’s notice.
Distressed properties in desirable areas move quickly, and your clients need to know that you are willing and able to perform in crunch time to get the job done.
Ultimately, real estate investors are a special type of client with a unique — and often demanding — set of needs. However, if you can become a trusted source of information, support the project with a local network, help find potential investments and come through in the clutch, your clients will reciprocate exponentially through deal volume and referrals to like-minded associates.
Eric Krattenstein is the chief marketing officer for Asset Based Lending.