Are your clients struggling with their investment strategies? You can reinforce your value by helping them. After all, they don’t have the breadth of experience you do, and your wisdom will be graciously welcomed.
For those who flip houses, a great rehab and plenty of showings is great, but it doesn’t guarantee a successful sale every time. If your clients don’t know certain strategies only apply in certain markets, they’re going to fail.
A strategy needs to be intentionally crafted, implemented and continually fine-tuned along the way. You want your clients to understand that no strategy, no matter how perfect, will continue to work forever without being refined to match the natural flow of the market.
Whether your client is a beginner or has some experience, here are tips to help them stay on top of their investment game:
Help them to acknowledge what isn’t working
Becoming attached to any strategy to the point you believe it’s infallible is dangerous. Any attachment is going to keep you from seeing the truth when you need to troubleshoot.
Impress upon their mind that when a strategy isn’t working, they need to be willing to investigate from every angle.
Most likely, they were trained by someone with more knowledge and success in real estate. It makes sense that they’re going to do everything they suggest, especially when that person has a six-figure income. However, even experts aren’t exempt from giving bad advice.
Bad advice isn’t always intentional. Sometimes it’s outdated, or there are other factors present in a situation that make someone’s advice not apply. Without experience, it’s impossible to make this discernment. That’s where you come in.
Find out who your client has been following and what advice they’ve been given. It’s possible they’ve misinterpreted the advice, or they’ve missed an important aspect due to inexperience.
Get them out of the cycle of futility
Sometimes advice is just bad. If that’s what you discover, your client is probably trapped in a cycle of futility trying to make it work (and it never will).
Trapped in this cycle, a person will think he or she is doing it wrong, so they’ll start from the beginning. When that doesn’t work, they’ll become an insomniac trying to squeeze out results by working 12 hours a day. When that doesn’t work, they’ll wonder if they’re doomed to fail.
Help your client understand that sometimes a strategy just doesn’t work.
Let them know the history
One mistake new investors make is resting on their laurels too soon. Teach your client that when a technique is working well, that’s when they need to stay on their toes. In a single moment, the strategy you rely on today can crumble to dust.
Teach your clients the advantage of understanding how certain investment opportunities fared in a similar market in the past. It’s similar to back testing when investing in stocks.
Both real estate and stocks are high-reward games that come with high risk. If you want those high rewards, you can’t afford to ignore history.
“Think of your back test as a type of ‘off-season’ training,” according to Netpicks. “During the off-season, you work on the fundamentals, fine-tuning every aspect of your technique. You discard what does not work and perfect those things that do.”
This is the secret to fine-tuning an investment strategy in any market.
Have honest conversations about their situation
Sometimes people aren’t really putting in the time and effort required to get results. Ask your clients what they’re doing, and look for areas where they’re missing the mark.
If your client isn’t able to utilize a specific strategy to full capacity, let them know it’s better to use strategies they can fully commit to.
Using these points, you can help your clients get their investment game back on track. For that, they’ll thank you and continue to look to you as a valuable resource and trusted adviser.