Real estate agents (for better or worse) have come to anticipate respect from colleagues based upon their long list of awards, accolades, and performance. Fair enough. Brokers are smart to award the top producers in their office, and colleagues are normally going to put those earning the type of money they could only dream of on a pedestal.
In the real world, though, real estate investors are not persuaded by wall-to-wall awards or certificates, the agent’s office size or staff, or by the agent’s clothes or model of car. Sure, investors can be impressed by an agent with a large office who wears Armani and drives a Mercedes, but I’ve never met an investor yet willing to make an investment decision solely because an agent has panache; or for that matter, the lack of it.
Over the course of my real estate career I have successfully serviced investors with and without the trappings. And I can tell you honestly that neither my successes nor failures were dependent on the “stuff” I brought with me. It was never about me, it was always what I brought to the table for the investor that mattered.
Here’s my point. You can expect applause and respect from those that surround you, but don’t expect it from anyone about to invest a large amount of money in a property simply because you are the one making the presentation. Remember, it’s not about you. What matters most to the real estate investor is whether or not the investment makes money; and any hope you have about earning an investor’s respect rests upon your ability to present those investment opportunities correctly.
1) Foremost, care whether or not a purchase or sale is in the best interests of the investor. Giving sincere advice about whether or not an investment decision is in fact a prudent choice goes a long way for agents because it will cause investors to trust you rather than to hold back or shun away because you appear to be more concerned about your well-being than theirs.
2) Understand what investors really care about. Unlike a home buyer who is primarily interested in nesting a family, real estate investing is about profit. So avoid trying to sell a rental property because it has good curb appeal, large kitchens, or is located in a particular school district; unless the amenities can be shown to translate into rental dollars, they matter little. What matters most to investors is the bottom line. Is the rental property profitable? That’s what you must be prepared to tell the investor; otherwise you might be perceived as one without income property understanding. You know the adage, “If it walks like a duck and quakes like a duck…”
3) Make meaningful presentations to assist in the investment decision process. This way you convey to an investor that you know what you’re talking about. Yes, a comparable market analysis counts, but it’s not enough. Remember, it is more than price or price per square foot that will persuade an investor. For example, a seller wants to know what price his or her property might sell for based upon average market cap rates for similar properties and the sale proceeds they could receive after taxes in the event of a sale. Whereas buyers would want to know the cash flows, rate of return, overall profitability, and potential sale proceeds that could be collected in the event of a subsequent sale.
We can go on, of course, but hopefully you get the idea. When you work with investors, don’t expect loyalty because you have had successes with home buyers. You must earn their respect by walking the walk and talking the talk in matters that they care about most.