Investing 101 - Using Agents and Networking to Find Deals

For most first-time investors, and a number of experienced investors two great avenues for locating deals are often overlooked. The first is a great Realtor or real estate agent. As an investor you need to do your homework in finding the right person to work with. Your first rule is that you should work with more than one person. Most agents may not want to do this, but if they are skilled at finding properties that make financial sense to investors they shouldn’t be against it. Most Realtors and agents will want you to sign an agreement for exclusively working with them. Unless you have developed a relationship with them and have seen great results from using them don’t do it! They may even say that the State that they are working in requires them to have you sign this agreement before they can work with you. It is an old trick that is used by a lot of agents. In most states you need to sign paperwork stating that they are representing you. However, that agreement does not have to be “exclusive” you can work with several agents when buying investment property. In most cases their knowledge level will not be the same, and in almost all cases one agents inventory of properties will be different from the next.

Most investors are not aware that there are a lot of properties for-sale that are not on a Multiple-Listing-Service that is used by agents and the public. This may be the biggest key to you as an investor when it comes time to locate properties. Why would they not list them for everyone to see? First, the agent that lists a property will generally make twice as much commission if they sell the property themselves. Why share with other agents if you don’t have to? Second, if they have a number of properties that other agents don’t have they become more popular with investors, and will develop a bigger client base. Another reason for going this route is that once the property goes on the MLS system the current tenants are bound to get hassled by “tire kickers” checking out the property. The only thing worse for a landlord having angry tenants is to not have them pay. A vast quantity of property sells non-mls because of these reasons. I am by no means saying the “junk” is on the MLS and the only deals are non-MLS, but there are a lot of great deals out there that investors don’t see because they don’t know where to look. With that said a lot of the Realtors and agents don’t know this either. Most Realtors and agents don’t own rental property and sell little if any of it. Unfortunately, few of them will back-away from giving advice on the subject or “helping” clients buy and sell it. DO YOUR HOMEWORK WHEN IT COMES TO SELECTING SOMEONE THAT WILL HELP YOU! A lot of times you will know more than the agent and your paying for their help! Not all Realtors and agents are created equal. Ask some important questions before you begin to use someone’s services.

Questions like: Do you own any investment property? Where is it located? What has your experience been with it? What areas do you recommend to buy in? What is your cash-flow? If their eyes gloss-over run! When did you buy the property? If they have good answers then ask if you can go see one or two of their properties. Why do you want to know all of this? Because a great Realtor/agent will give you information after you buy the property from them. I answer more questions after the sale then before it. I hear “how do I check a tenant’s background” “how do I evict someone”. “Who do you use to fix this”. If I didn’t have the experience I do I wouldn’t be able to help. I think the help after the sale is also as important before the sale.

The next category to find deals is networking. If you are going to be successful in any business you need to network especially Real Estate investing. Everyone you know either owns or rents a property or lives with someone that does. I look at every person as a potential “Birddog” to find me deals. How do I gain access to the network. First, you should create a business card. If you are going to be doing business have a card with your picture on it! Without your picture people won’t associate the card with you. They will remember you and your business if they have your picture on the card.

Wear your business! What I mean by this is advertise your business on what you’re wearing. Most people in the U.S. advertise for companies or Sports teams that could care less about their lives. Why not advertise for yourself! Sometimes it is difficult to strike-up a conversation with a stranger about your business. If you have the business advertised on your shirt or jacket you’d be surprised at how many people will ask you about your business. People ask me for my card without even talking to me when they see my Real Estate logo on my coat.

When you are looking for Real Estate deals don’t be afraid to just knock on someone’s door. If you’d like to invest in a certain area or even want to buy a home to live in knock on the door! I still get a majority of my business from doing this. Sure people may think I am a little crazy, but it works. There is a particular area by my home that renters love. It is close to the University and downtown and is almost impossible to find anything for-sale by the normal means of using the MLS and even using agents. It is so easy to rent that almost every investor wants to own there. I knock on doors and calls the current owners and ask them if they would consider selling. I have buyers so why bother listing it when I can save them money. Its old-school and guess what it works! I will continue to add to this site with investment Ideas.

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