In this article, I want to cover three things real estate agents should do to create lasting relationships with real estate investors. It’s not about style and panache but about embracing a concept I call “partnering with the investor.”
Here’s the idea.
Appreciate the Investor’s Money
Appreciate the fact that the money for the investment might be coming out of a fund setup by the investor to send a son or daughter to college. That it’s not likely money from a windfall, but the result of hard-earned bucks scrimped and saved to serve the family. Even if the customer appears to have already made enough money to service the family ten-fold, don’t lose sight of the fact that he or she still has concerns about the money and surely doesn’t want to lose a penny of it on any real estate investment.
Care How the Money Gets Spent
Convey to your customer by your actions and deeds that you are as committed as they are to protect their nest egg and genuinely do care how it gets spent.
A television commercial several years ago illustrates it best. During a conversation with his financial advisor and the subject of children comes up the bewildered customer wonders, “Is he talking about his children or mine?” In other words, the customer had doubts about whose interests the salesperson had in mind.
Partnership requires trust. You must assure your customer by actions and deeds that you will treat their money as if it was your own and are as committed as they are to protect it. Be prepared to warn an investor against rental properties that are not good real estate investment opportunities, even if it means losing a sale. Bear in mind that the agent who has eyes only for the commission (perhaps to the detriment of the investor) is less likely to establish a trust relationship that could over time evolve into multiple sales then the agent who isn’t out to just take the money and run.
Give Reliable Advice
Above all, know what you’re talking about because nothing else you do will hold water unless the investor can rely upon your judgment.
1) Learn the basics about real estate investing in order to discuss investment property correctly. At the very least know the difference between capitalization rate and gross rent multiplier and be able to create an APOD. Numerous sites on the web are devoted to real estate investment definitions and formulas where you can learn what you need easily.
2) Understand your local rental property market. Know what rental properties have sold for and are currently listed for, breaking it down by cap rate, cost per unit, and cost per square foot. You must be informed about market values so you can distinguish between a good investment opportunity and a poor one.
3) Run the numbers yourself and create your own cash flow presentations. This is easy with good real estate investment software. Real estate investors will trust you more when they can rely on you to substantiate the data you present to them.
Here’s to your success.