Another really good source of leads that a lot of agents overlook is investment homes. Because real estate is a prime place for people to invest their money, there are a lot of different types of investors out there who do things like fix and flip, buy and hold, and invest in vacant lots.
In fact, there are 7 million people in the United States who consider themselves investors. What other reason do you need to meet these financially-savvy leads and list their properties?
How Can You Meet Investors?
There are a lot of ways to meet investors, but the most successful agent is one who thinks outside the box. You can sign up for a social application on your smartphone, such as Meetup.com, for example, and search for local investor communities. Then, after you join those communities, make sure to attend their events. If the group is hosting a function at a hotel or at a convention center, go there and network with all of the people who are looking to invest their money into real estate properties. Bring your marketing materials and be prepared to shake a lot of hands!
Essentially, these are the main ways we recommend seeking out investors:
- Joining online groups
- Small business networking events in your area
- Your personal sphere of influence
How Investors are Different from Other Sellers
Note that Investors aren’t exactly the same as traditional sellers. Take it from one of our members, who regularly works with investors:
“[T]hey're entrepreneurs. All these investors are entrepreneurs. All these investors are trying to maximize their return, and they all feel that they can do anything an agent can do. It’s the same thing as people doing for sale by owners. It's almost identical to for sale by owners. The difference is that the investors sometimes are a little bit sharper, and they often have had a couple of positive experiences under their belt. So they were successful a couple of times. Sometimes, only one time. And they feel that makes them an expert.”
He uses this analogy:
“You could run across the highway ten times and never get hit, but that doesn't mean that you're the best at running across the highway.”
Because investors aren’t emotionally tied to what they’re buying and selling, it’s important to showcase your own knowledge and skills as an agent, and prove yours outweigh theirs. As our member points out:
“Investors, as I said, they care about the numbers. You have to show an investor that it's more profitable, that you can get them a greater return on investment, you have more access than they do, you have features that they don't have.”
Different Types of Investors
Not all investors are seeking the same goal. Agents should familiarize themselves with the different types of investors before trying to work with them.
Some investors, for example, are interested in buying and flipping properties for a quick resell. Others buy rental properties and either try to rent on their own or connect with property managers to manage their properties.
Savvy real estate agents should always be prepared with specific market knowledge, including what similar homes in the area are selling for. However, agents should also be cautious about giving out financial advice because they aren't legally allowed to do so.
For example, in the case of an investor who focuses on flipped homes, it’s best to focus on the after-repair value, rather than discussing specific prices for various renovation projects.
How Can You Spot Investment Homes?
As you learn more about investors and the homes they look for, you’ll only get better in this niche. Furthermore, if you know how to spot homes with investment potential and bring them to investors, you’ll stay a step ahead of your competition.
In that case, you can go out and find people who already own investment homes in your area, contact them and say, "Hey, are you looking to buy any more investment properties at the beach, or in your community? I only ask because I have seen this terrific property...” This can potentially be a good and steady source of business.
Recent foreclosure sales are a good source of investor leads, as well, because these are often the primary homes they buy.
I've seen a lot of agents tap into this industry in many different ways. We're in the process of writing a book that real estate agents can give to real estate investors to educate them about the benefits of working with an agent. Reach out to us on authorify.com to learn more.