With the spring market now upon us, Realtors are gearing up for business. You’re working hard, knocking on doors, garnering leads and positioning yourself as the real estate expert in your neighbourhood.
There is a client segment that can help Realtors grow their income by a substantial amount: real estate investors. They are a subset of the real estate industry and this type of customer often has different requirements than the average consumer. As many investors can attest, it can be difficult to find a knowledgeable real estate professional who understands the types of properties they are looking for, as well as the financials they require.
The average home buyer looks to purchase a home once every nine years. A homeowner’s decision to buy or sell may depend on many factors: location, an upgraded kitchen, a great school district and the intangible, but all-important factor of emotional attachment.
An active real estate investor looks to purchase at least one to five properties per year. These can include condos, residential homes or commercial complexes. Investors can also be great repeat clients and a lucrative source of referrals, if they are pleased with the service.
There are a number of key factors investors look for in a real estate professional partner:
Understanding the numbers:
An investor’s purchase is solely about the numbers such as cashflow and operating expenses. Unlike a typical home buyer, the investor has no emotional attachment to the property, since they are not going to be living there. As a Realtor catering to investors, you will need to understand how investors run their numbers to determine if the property is a good deal or not.
Investors are often willing to buy properties that are not necessarily turn-key or in the best school district. They will often look at houses in gentrifying neighbourhoods that require major work – if they are flippers, they will love a rundown property that has great potential for them to fix it up.
Therefore, don’t be afraid to accept listings that may be less than ideal for the average consumer – a real estate investor may want to scoop it right up, as long as the numbers make sense.
Realtors who work successfully with investors have up-to-date knowledge about what’s happening in their neck of the woods. They are well-connected to city planners, and have knowledge about major transit developments, new hospitals or office buildings and upcoming employment opportunities. If a salesperson hears of anything, they will share this valuable information with their investor client base, which can eventually result in sales.
Special deals or out of season opportunities:
Unlike an average consumer, investors are always looking for deals or their next property acquisition. While the “normal” real estate market may be cooling or slow during the winter months, for example, investors are active all months of the year. They particularly like working with Realtors who have a knack for finding exclusive, off-the-market deals or people who need to sell fast, so they don’t need to deal with as much competition.
Now that you’re armed with what investors are looking for, how can you find them?
There are numerous real estate investment training groups and meet-ups across the country. Align yourself with a group that you feel comfortable working with. Many of these groups host monthly meetings where you can attend as a Realtor and educate yourself about key trends and the financial data that investors look for. Examples include the Women’s Real Estate Network (WREN) or Real Estate Intelligence Network (REIN).
Many cities also have investment groups that cater to a specific geographical area. You can often search for real estate investment groups in your city on MEETUP.com.
Now that you have a better idea of what investors look for, your can focus on this niche market in addition to the average consumer.
By Alice Soon, WREN Advisor
Originally published on REM Online