- Never "pre-judge" a client -- the clients you want to be doing business with long-term are most likely not the ones that show off wealth in an ostentatious manner. Your attitude and respect for both the client and the process can get you in.
- Transparency is the best policy, no matter how bad the news. Delivering bad news as quickly as possible enables both you and your client to tackle issues head-on. Respect ensues.
- Be willing to walk away if a relationship isn't right for you. You are just as important in this equation as your client. There is no need to stay in a "partnership" that is disrespectful or lopsided.
Other agents often look on with great envy because they are constantly prospecting for new clients, struggling to keep their pipeline full and wondering from where their next commission is coming.
As an investor myself, I have forged relationships with many agents over the years whom I have used almost exclusively in one market or another. Although I am primarily a commercial real estate investor, I bought countless single-family homes from 2010 to 2014 when the market was depressed.
During that time, I used agents on nearly every transaction, paid them full commissions, and I was happy to do so. I felt good having go-to agents. I knew they’d look after me and that they were people I trusted.
But it wasn’t always that easy. I tried working with a lot of agents who didn’t work out, but I found a few gems that I kept on my team for many years, and several even to this day.
It wasn’t that hard to earn my business, and I wasn’t that difficult of a buyer or seller. But, like most investors, I had a certain level of expectations for the people I worked with and especially those I continued to do business with over and over again.
In addition to being an investor myself, I have represented and partnered with some very successful and high-net-worth people over the years, and people who expected the same things from me that I expect from the agents who received the lion’s share of my business.
Finding investors is not all that difficult, so long as you are active in the real estate business. If you are active, then your path will eventually cross with theirs, and it will be up to you to start and forge a strong relationship with them.
Here are the 10 make-or-break things you can do as an agent to land and keep big investors who will constantly keep your pipeline full.
1. Don’t pre-judge your clients or potential clients
First and foremost, don’t pre-judge your clients or potential clients, or even clients of other agents who might like what they see in you and call you next time they want to do a deal.
When I’m not in my day-to-day Brioni suit, Hermes tie and custom cuff links, you would never guess that I have any financial wherewithal whatsoever. I dress in blue jeans and worn-out polo shirts, and I am anything but flashy.
Most agents will judge a person by the car they drive, watch they wear or where they live. This is a deadly mistake. Most high-net-worth individuals don’t flaunt it. Those who do usually are worthless and spend their fortune on lifestyle and image.
Investors with means, on the other hand, do the exact opposite. They spend their money on investing and making more money.
I recall years ago showing up to tour a property in a pickup truck. The agent almost immediately began quizzing me as to whether I was paying cash or needed to qualify for a loan before I had even spent 60 seconds viewing the property.
To people of means, that line of questioning is incredibly, well, untactful. Forget what you read in magazines and see on TV.
I have friends and partners of mine that are worth tens of millions of dollars and drive a Hyundai — for real. And some even drive 15-year-old pickup trucks, dress in blue jeans and wear plain white shirts with holes in them.
Don’t judge a book by its cover. I have done hundreds of millions of dollars of deals with these kinds of investors, who don’t wear fancy watches and drive expensive cars.
If you haven’t read “The Millionaire Next Door” — do it. The description in the book of a typical millionaire next door is the exact profile of most serious investors.
2. Spend time with them in person
In today’s world of technology, too many agents just work by email, phone and text messaging. That is fine if you’re dealing with other agents, contractors or title companies, but that is not OK when you’re dealing with people who are entrusting you to find them deals worth hundreds of thousands, if not millions, of dollars.
Take them to lunch, invite their family to come with them, get to know them — and most of all, let them get to know you. Don’t ever let them pay for lunch or dinner. That is taboo, and it is your marketing cost, not theirs.
3. Even if you are a kick-butt agent with lots going on, don’t get a big head
Never project the entitled or arrogant attitude because you have all the good deals. Don’t act like if an investor wants good deals, they need to kiss up to you. I’ve seen this all too many times.
Never forget, those investors have the money to write checks that put food on your table and pay your bills. Don’t treat investors with arrogance, or they will very quickly get tired of doing business with you, no matter how good you think you are.
4. Don’t ‘sell’ them on deals
You might think that your job is sales, but it isn’t. Your job is to be trustworthy, smart and transparent. When you bring a deal to an investor, give him or her the pros, cons and possibilities both good and bad.
This instills their confidence in you and lets them know that you’re on their team, not just in it for a commission. Start out with what’s wrong with the deal even before you start talking about what’s right about it. This will help you earn their trust.
5. Always, always, always communicate promptly and honestly
Now, I’m not saying that you should make yourself available at 8 p.m. on a Saturday night to talk about something that is not time-sensitive or relevant. Everyone needs personal time away from business.
But, always pick up the phone when you can, answer the calls yourself, and do your best not to send them to voicemail. Regardless of whether you have good news, bad news or no news — never ever dodge a call, text message or email from one of your investors.
Over the past five years, I have done a tremendous amount of business with one particular agent. That agent used to pick up my calls, talk to me and keep me informed.
As the years went on, the agent got worse and worse about it, to the point that my phone calls, text messages and emails would go unreturned for days, if not over a week.
Well, that wasn’t going to fly with me, considering it was my hundreds of thousands of dollars that was on the line, not the agent’s. So, I completely stopped doing business with that person, and I’m happier for it. Any other investor will feel the same way.
6. Do more than your job
Most agents think of their job as finding deals, writing and receiving offers, putting up signs and adding properties to the MLS. Maybe, occasionally going to a signing.
Let me be clear, if you want to earn the undivided business of a big money investor: that is not all your job entails.
Go the extra mile: Help find and coordinate contractors, do your best to find ones that do good work at fair prices and show the investor that even though your commission is earned, you are in this together and look after him or her just as you would yourself.
This is called integrity.
7. Be a team player
There is an adage, “look after the pennies, and the dollars will look out for themselves.”
Until you become an investor (if you aren’t one already), you’ll never really understand how difficult it is to make a good return on your money.
Often, unexpected issues come up during or after a deal. Maybe a big unforeseen repair comes up on a property right after you close, or you’re helping an investor flip a property that went way over budget in the fix-up.
Whatever the circumstances are, always be willing to roll up your sleeves and get involved to be a problem-solver. Talk about a way to earn trust and respect!
Being a “team player” is vital for any long-term business relationship.
8. Don’t show preferential treatment to yourself or any other investor
If you’re a good agent, you’re also probably a busy agent. That is respectable. And if you are busy, you might have more than one, or even more than two “big investor clients.”
What will kill a relationship with any of them is if they find out that you took a deal to another investor before you brought it to them.
How do you get around this issue? Nothing less than 100 percent transparency, that’s how.
Meet with each of your investors individually, explain the challenge that you have with multiple investors wanting deals, and let them know that your relationship with them is important. Then, ask them how they prefer you to deal with it.
Maybe you can create a more defined “buy box” for them so that you agree you’re only obligated to bring deals to each investor that fit certain criteria.
Or maybe they’ll simply understand the challenge and let you know how grateful they are for any opportunity you give them.
Either way or in any case, dealing with the issue head on is extremely important. The agent I’m talking about in point No. 5 above also started sending me the not-as-good deals over time. I noticed the results, and returns also got worse and worse.
Then I found out this agent had another investor that he was shuffling the good ones to, and I was getting the leftovers. That was a terrible experience, leaving me feeling incredibly frustrated.
9. Show gratitude for the business and the relationship
Let investors know that you value their business, but above all, that you value the relationship, friendship and confidence that they have in you.
Stay humble and sincere. That will go a long way. Don’t simply “expect” investor loyalty, but express that you are genuinely grateful for the opportunity to earn it.
Let your investors know how much their business means to you, and you will see them be ever increasingly proud to give it to you.
10. Know that not every big investor relationship is a match made in heaven
Over time, you will get to know that investor, develop a relationship with him or her — and sometimes, unfortunately, you will find out that his or her expectations and treatment of you is not the right fit.
After all, it’s not always just about the money. Sometimes it’s about the way people treat you, respect you and work with you. If you decide one relationship isn’t right, you’ll always find another if you follow the first nine tips above.
Working with fewer clients will make your business and your life immensely easier. Not every market is conducive to big investors, and not every time is conducive to investing.
But the relationships that you forge will last your entire career, no matter what the conditions are.