Why Agents who Work with Investors are a Special Breed.

 

Oprah has been known as one of the wealthiest women in the world for years.  When asked in an interview why she buys property she said, “it’s the only thing that god isn’t making any more of.”

This comment should give you an idea of the mentality of an investor.

It is one that’s grounded in deep held beliefs and philosophy.

Here’s 3 reasons why the agents who work with real estate investors are a special breed:

 

#1 – Equity.

No, it’s not the difference between what you paid for your house and what some appraiser “said” it’s worth.

Experienced investors know how much money a property is really worth and they expect any Realtor or agent they work with to also understand their view on how this important value should be calculated.

 

#2 – They can calculate ROI.

When properties don’t sell investors don’t bail they rent.

Real estate agents who specialize with investors are able to accurately calculate the market rents and the cap rate or the rate that the investors’ capital investment will return to them after purchase.

The higher this rate the better the performance of the investment.

Here’s the simplified formula:

Cap Rate = Annual Net Income/ Total Cost of Real Estate

For example, If it cost an investor $100,000 to buy a property that generates $10k/year in net income the cap rate would be 10%.  

 

#3 – Relationships.

The biggest dynamic that separates agents who deal with investors from ordinary agents is their relationships with key stakeholders like, “the banks”.

Investors are constantly looking to purchase bank owned properties or REOs at deep discounts and this is not really possible without someone who can “pull strings” when it’s needed to get their clients offer “in the right hands” if you will.

Once an agent has developed a reputation as a top performer then the decision makers at “the banks” will usually reward them by giving them exclusive “gems” like the really good listings or inside info on a property that’s “coming soon” before other agents.

This gives the investor the decided advantage over the competition.

Now it’s over to you.

Have you ever worked with an investor what’s did you find different between working with them and a retail client?