AS AN INVESTOR, DO I NEED A REALTOR?
All successful real estate purchases require proper guidance. As an investor, one of your first tasks will be to build your team of trusted advisors. These are the individuals who will aid in your successful investing. Given that a key component of your investing routine will be to identify suitable properties in a timely fashion, a competent, investor-friendly Realtor will be a staple on your team.
Your Realtor Should:
Be an experienced investor, ideally in your area/location of interest. Would you ask a patent attorney for advice on real estate law? Probably not, because you know that not all attorneys are created equal. Similarly, not all Realtors are equipped to handle your investing needs. The Realtor on your team should be experienced in real estate investing. This experience will provide your Realtor with an understanding of your needs, so that s/he can be effective in servicing your property acquisitions.
Inform you of new properties to hit the market in a timely fashion. Often, the best properties are snatched up quickly by seasoned investors who are ready to act fast. Gaining timely access to these properties will aid in your ability to get in on good deals before the late-arrivers catch wind of them!
Keep you informed of market trends in your area of interest. The real estate market in your area has it's own trends which may or may not follow closely with national trends. Your Realtor should inform you of these trends so that you can adjust your investing guidelines accordingly.
Have access to different types of properties, including those that are not listed in the Multiple Listing Service (MLS). The MLS is a great resource for finding investment properties, however, it is not the only source. Your Realtor should have access to alternate networks that will provide access to properties that are not available through traditional mechanisms.
Likewise, YOU should:
- Determine your specific investing goals and communicate these goals to your Realtor. Do you want to be a landlord and build a portfolio of multi-family properties for passive income and appreciation? Do you want to buy single-family fixer-uppers and resell these for cashflow? Each of these investing mechanisms will require different amounts of time and financial resources.
- Inform your Realtor of your buying criteria. There are thousands of homes on the market in your local area at any point in time, and all of these will not fit your investing needs. Is location most important to you, or cashflow, or both? Your Realtor will only be as effective as the information you provide, so be sure to let your Realtor know what you want!
- Line up financing in advance of your property search. In real estate, "He who acts fast gets the deal". Whether you plan to use cash, private funds, institutional funds, or hard money loans, having these resources lined up will aid in presenting a stronger offer to your seller. If you don't already have these resources lined up, your Realtor should work with you on this step in advance of your property search.