Real Estate Investors Make Great Clients

Key Highlights

• Average real estate investor can be major source of recurrent business
• Average real estate investor typically educated about real estate process
• Investors, typically, can be sources for referrals and industry networks
• Tips to become go-to-agent for investors

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Such economic and market circumstances are terrible for too many homeowners without resources to pay their housing costs while being simultaneously advantageous to real estate investors. You as an agent can easily research and access potential real estate investment opportunities…now you just have to research and access those opportunities to engage real estate investors.

Consider the differences and similarities among traditional homebuyers and real estate investors:

• Real estate investors can buy and sell several homes every year whereas traditional homebuyers tend to buy and sell a home every 13 years, or five times in their lives, according to the National Association of REALTORS®.
  • Real estate investors can, if you do your job well, provide recurring business and recurring commissions for you
    • This means you don’t have to spend as much time and effort on generating leads
  • Traditional homebuyers may work with the same agent two or three times in their lifetimes, provided they don’t move out of state.
• Real estate investors are interested almost exclusively in Return On Investment (ROI) whereas traditional homebuyers often need to “fall in love” with the property.
  • As long as the ROI makes sense, chances are you’ll have a deal.
  • This translates into less time for the agent as long as the agent has done the homework and less hand holding as usually, real estate investors know and understand what’s involved in the transaction process (title insurance, closing costs, etc.)
• Real estate investors tend to have industry connections such as contractors for fixer-uppers and friends who are also investors looking for deals.
  • Traditional homebuyers will likely need to use your industry connections, therefore not enhancing your sphere
  • And again, if you do your job well, your investors as well as your traditional homebuyers will refer their contacts to you.

How do you attract investor clients?

• Seek and develop newbie investors from your past client sphere. Likely seasoned investors will already have a seasoned investor agent.
• Entice your newbie/newer investor clients by offering them a one-time discounted commission on a property.
• Become super knowledgeable about the process.
  • Work with a mentor and/or coach
  • Attend investor events and seminars
  • Read books such as Turner’s The Book on Rental Property Investing and/or McElroy’s The ABCs of Real Estate Investing
• Become expert in deal negotiation
• As always, ask relevant questions to discover what the real estate investor is really looking for.
• Look off-market and contact homeowners/lenders who may know of soon-to-be opportunities.

Cultivating real estate investors as clients requires the same amount of work as cultivating traditional buyers but once you’ve done the work, you might be able to generate exponential rewards.

Thanks to InmanNews.

Also read: Property Investment During A Recession?, Time for Buyers To Drive Deals, New Unemployment Claims Fall Slightly While Layoffs Continue to Take Their Toll