How Real Estate Agents Can Attract More Real Estate Investor Clients
A great real estate professional understands the buying process, psychology, needs, and how to market to the standard homebuyer. However, when it comes to investors, what makes a great agent changes completely. If you view investors as a potential positive long-term relationship, read on to identify ways to attract and maintain them as clients.
Real Estate Investors Offers Repeat Business
According to a report by the National Association of Realtors®, the average homeowner tends to live in their home for an average of 15 years before moving out. The same report iterated that about 18% of homeowners will prefer to stay in the same house for a lifetime.
Meanwhile, the average real estate investor tends to purchase two to twelve homes yearly depending on their success in the real estate market. Getting just a few investor clients can quickly earn you more income than all your other clients combined.
Investors behave differently from standard homebuyers. Traditional homebuyers are usually faced with the problem of securing a mortgage, and investors often make cash offers. If they’re securing financing, they are typically well versed and have several financing mediums such as crowdfunding, private partnerships, and private money lenders. Once an investor identifies a valuable property, they are eager to expedite the deal.
Real Estate Investors Offer Location Flexibility
The location of a property is of more importance to standard homebuyers. They are more concerned about how close their potential home is to a particular church, business place, school, and other social amenities. Investors are less concerned about the location of a property as long as it fits their investment criteria.
Homebuyers tend to evaluate a home based on specific criteria such as the crime rate of the neighborhood, commute time, malls, and quality of schools. These criteria can affect the purchase value of the property. However, for a real estate investor, while the above-listed standards may be necessary, they are more concerned about the zoning laws, renter migration, market trends, and rent appreciation of the neighborhood. In a nutshell, investors are more concerned about Return on Investment (ROI) and cashflow.
Investors are Systematic in Their Purchases
Standard homebuyers seem to attach emotions when it comes to purchasing a home. Homebuyers want a perfect home that represents their personality, and this tends to cost realtors more money and time. Unlike standard homebuyers, investors are ‘systematic’ in their approach and quick to make purchases as long as it suits their investment plans.
How Can I Attract and Retain Investors as My Clients?
According to joint research by BiggerPockets and Memphis Invest, there are over 28 million real estate investors in America. This is a pretty massive number in comparison to NAR report of a 1.4 million Realtors in the United States.
In a nutshell, real estate investors are everywhere. There are some in your place of worship, pub, cafe, LinkedIn circle, your daughter’s PTA, and even on your Facebook wall. You can’t stand at the train station and expect to board an airplane. When trying to attract real estate investors, you’ve got to position your business to attract them. While this may seem like the obvious thing to do, you’d be surprised that most realtors are failing in this aspect. How can you position yourself, your business, and brand to attract investors?
High-Profile Investors Are Looking for Exceptional Agents
It’s common knowledge that exceptional realtors are challenging to find. In fact, in the real estate industry, 20% of realtors are responsible for 80% of the funds made in the industry. So, if you want to attract and retain real estate investors as your clients, you must learn to bring your A+ game. To become exceptional, you must learn to improve your communication skills, technology skills, and knowledge of the real estate markets.
1. Take Advantage of Social Media
According to Statista, there are over 2.77 billion people across the major social media platforms. Start by creating a social media page/presence for your business. You can join real estate investment groups and pitch your business proposals to willing investors. One great thing about advertising on social media is that you can position your adverts at people around your state or neighborhood, and can use investing-related keywords.
2. Become an Authority
While this may take time to achieve, it’s one of the best ways to position yourself and business to attract real estate investors. You can start by creating a blog to reflect your thoughts about the rental and investment real estate market, investment trends, and other related topics. With less than $50, you can start a blog on WordPress or Blogger and kickstart your journey to becoming a real estate investment authority.
What Should I Do Different When Dealing with Investors as Clients?
Real estate investors are a different breed of clients with unique demands and opinions. Before delving into dealing with real estate investors as clients, it’s essential that you know the keys to cultivate a long-term relationship with investors.
Know the Basics
When dealing with real estate investors as clients, you must be efficient and know the basic of the real estate market. In the real estate investment market, there is no place for handholding. This is because most investors are profit-oriented individuals. Become well versed to the various markets your investment clients are looking for (condos, single-family home, multi-family dwellings, etc.).
For a real estate investor, time is money. Investors want efficient services; they want quick responses to their questions and concerns. So, as a realtor dealing with an investor as a client, you must have the capacity to get the paperwork done on time, return phone calls quickly, and be generally available swiftly.
Assess the Clients
Real estate investors are humans, and they have specific personality traits that may affect their business decisions. You must learn to access and vet your potential investment clients before representing their interest. You can start by accessing their experience and maturity level. Also, find out if they are serious individuals or if they are novices that may not even have financing. Do they have their own money or where is the money coming from? By accessing your clients, you’re reducing time wasters and problematic investor clients.
Understand the Math
Real estate investors are known to make calculated investment decisions. Their primary goal is to purchase properties that will bring in profits and increase ROI. They’ll appreciate when you provide data that prove a particular property is the right investment decision. As an agent, be aware of the metrics used to calculate the profitability level of properties and the right tools to calculate their returns.
No matter your level of achievement, expertise, and portfolio, consider concentrating in working with investors when possible, in addition to traditional home buyers. In this way, you will be able to close bigger deals faster and build a profitable working relationship with your investors. Over time, you’ll get into a working groove with your investor and your profitability will soar.
Peter Evering is the Business Development Manager of Utopia Management. Since 1994, Utopia has provided quality property management services for investors throughout California.