How to prepare to meet and attract real estate investors
The common mistake inexperienced real estate agents make when working with rental properties is to misunderstand what real estate investors require from an agent to make investment decisions.
The flaw stems from the fact that most agents do not fully understand the notion that real estate investment, unlike residential transactions, is about the question of profitability. Unlike residential properties, where curb appeal, school zones, and floor plans all play a role in decision-making, this is not the case with rental properties.
Real estate investing is a money business for investors. Amenities are not ignored, but are routinely considered just for the impact they would have on cash flow and rate of return. What someone interested in buying or selling a rental property really wants to know is “How much money will I make?”
Unfortunately for most agents, though, this is where the dialogue gets murky because the agent has no credible way to respond. And as a result, the very important and vitally necessary first encounter for the broker to impress the investor is tainted by inexperience, reducing the broker’s chance of capturing the investor’s loyalty and any future hope of a transaction likely to zero.
I have seen it dozens of times in my thirty years of experience working with rental property investors. When you screw up the first meeting with an investor (who is neither a family member nor a close friend), you should expect that the words you’ll hear from the investor in any subsequent contact will be “Thanks, but I’m working with someone else.” “
It’s a family thing. The investor contacts the agent regarding a rental property, after several minutes he realizes that he or she understands little or nothing about investing in income properties and moves on.
I’ve certainly been there, hey, you’ve probably been there. It is the nature of what residential real estate agents experience when they are not adequately prepared to meet and engage investors during an initial meeting.
Ok, so how do you prepare?
Make an investment in a real estate investment software solution. As you use it, you will become familiar with the financial data that investors are looking for, as well as the types of returns. More importantly, however, you’ll be amply prepared to create cash flow and rate of return analysis presentations for rental income properties on the spot.
Think about it.
The next time a potential buyer asks you about a particular income property that is currently for sale, you don’t have to present what the listing agent prepared (not a good idea) and can instead submit your own personalized reports with your name and contact. information.
The same is true for potential sellers. An investment software solution will allow you to create reports that help support your suggested sales price. Additionally, they convey an awareness that you are committed to the investment and ready to sell a rental property (which in turn instills investor confidence and translates into loyalty).
The software isn’t a magic wand – you still need to apply some charm when making presentations.
But real estate investment software equips you with the best possible tool to properly service rental properties and investors. You instantly take a qualified position ahead of other residential brokers and, more importantly, significantly improve your chances of producing rental property transactions with a ready answer to investors asking, “How much money will I make?”