Not all real estate agents can tell you the after-repair value of the house on 5th Street or give you the estimated cap rate for a rental you’re eyeing near the university. If you seek assistance either locating, sizing up, or calculating renovation costs for a potential investment property, you need an investor-friendly Realtor® with specialized knowledge of rehabbing and rental markets in your area.
Most real estate agents help traditional buyers find homes and work with seller clients who are marketing their primary residence. But the “investor friendly” segment of agents also has spent time learning the investment side of the business and ideally manages a few of their own investment properties. An agent who works with investors knows how to analyze a deal and may have access to off-market homes through their network.
9 qualities that make an agent ‘investor-friendly’
A generalist real estate agent guides their clients through the entire process of buying or selling a primary residence. They assist with important steps including marketing, negotiations, inspections, the home appraisal, and closing.
But how can you tell if an agent is truly “investor friendly?” What are the signs that the agent has an extra layer of expertise in investments, enabling them to help clients who are looking to flip homes or build a portfolio of rental properties? Let’s take a look at the top skills and qualities to look for.
1. Access to off-market properties
All of the experts we spoke with agreed that the biggest advantage an agent brings to an investor is the ability to deliver properties that can’t be found on the MLS, including those that aren’t even on the market yet.
“Successful investors have a lot of business and a lot going on — they want a Realtor® who’s going to bring them deals. And they don’t want to compete,” says Jordan Matin, a top real estate agent and property investor in Portland, Oregon.
An investor-friendly agent will always be looking for properties their client can’t find themselves, adds Robert Taylor, a seasoned California real estate investor. In fact, many investors will have more than one agent working for them. Taylor personally relies on two different agents: One who specializes in homeowners with distressed properties, and another who has managed and owns multiple rental properties.
Investor-friendly agents often have existing relationships with wholesalers who are looking for homeowners willing to sell for cash. The agents then bring those available properties to their investor clients before they are listed, eliminating the need to bid against other buyers.
Benefit to investor: An agent with greater access to off-market deals can provide more investment opportunities for the buyer, giving them an edge over competing investors and connecting them to more lucrative deals.
2. Experienced and in real estate full-time
For many agents who are just getting started or are looking to make a career change, there may be a transition period when they’re juggling real estate along with another job or schooling.
According to a survey by Placester, 49% of agents work in the industry full-time, while 22% classify themselves as part-time. While it’s possible to have success working with a part-time agent, property investments typically require another level of skill and knowledge that is best served by a full-time agent who isn’t moonlighting on the side.
Sellers should look for an investor-friendly agent who completes a minimum of 100 transactions per year — and that type of volume typically requires a full-time commitment, according to Matin.
Benefit to investor: A full-time agent will have more availability to help locate properties and act quickly to negotiate deals before competing investors snatch them up. They will also likely be more responsive and communicative than a part-time agent who is juggling other commitments.
3. Knowledge of micro-markets
While most agents specialize in a particular region or city, investor-friendly agents will narrow their focus to hone in on micro-markets — specific neighborhoods or communities within a larger area.
Agents with deep micro-market knowledge can provide insights on local specifics like school districts, building and zoning regulations, restaurants, shopping, commuter trends, and more. They will be aware of the community park development on the South side of town that makes the area a great opportunity for attracting renters, or which areas are going to be too expensive to buy into.
Benefit to investor: When investing in real estate, knowledge of the market is critical. The more you know about the nuances of a property and its surrounding area, the better equipped you’ll be to make smart purchasing decisions. Even the most experienced investors can benefit from an investor-friendly agent’s deep familiarity with local markets.
4. Firsthand investing experience
Many investor-friendly real estate agents are investors themselves. Travis Steinemann, an experienced real estate investor in Baton Rouge, Louisiana, only works with real estate investors who actually invest in their own properties.
“Otherwise, I don’t believe they would be able to understand what a good deal is, as well as the smaller details that are easy to miss but can sink a project,” he explains.
Taylor agrees. When he first got started, he enlisted an agent without checking to see if they had any investment experience. After he bought his first property with that agent, he asked why they didn’t invest. Their response was, “I couldn’t ever find a way to make money investing in real estate.”
“That should have been a clue that they were not a good investor-friendly agent,” he says. “I only bought one investment property through that agent and I lost over $90,000. I’ve learned that I need agents who have actually written checks for the kind of work I do. These agents understand my costs and what I’m looking for.”
Steinemann points out one more thing to keep in mind: If you work with an agent who is actively investing, in some cases they may keep the best deals for themselves. To prevent this situation, try looking for an agent who has a different strategy than you. For example, if you specialize in flips and they tend to buy and hold properties, that could lend itself to a symbiotic relationship rather than a competitive one.
Benefit to investor: An agent who has invested in real estate themselves will have firsthand knowledge of the potential pitfalls and obstacles, so they can help you sidestep them in your own investments.
5. Skilled at analyzing a deal
Price is always an important consideration when buying a property — but a real estate investor must also consider numbers like renovation costs, taxes, rental income, and more.
For example, a regular agent may look at a house that rents for $1,000 per month with a mortgage payment of $500 per month and determine that it will produce $500 per month in cash flow.
But that number can be very different when taking into account other expenses — some obvious like taxes and insurance, and some less obvious like vacancy allowance, capital expenditures, repairs, maintenance, and lawn care.
“There is a number at which every property works as an investment — the trick is finding that number and getting the seller to agree to it. That typically takes analyzing many properties and making many offers,” says Steinemann. “An investor-friendly agent will see value in doing all this extra work, because many investors end up doing many deals a year.”
Benefit to investor: An investor-friendly agent can help you find that financial “sweet spot” that will enable you to make a profit on a property. They also understand what hidden costs might lie beneath the surface of an investment.
6. Fluent in investor lingo
When using an agent to source properties, negotiate prices and terms, draft contracts, and manage relationships with other industry contacts on your behalf, it’s important to choose someone who knows the ins and outs of real estate investing — and that starts with talking the talk.
If you’re new to investing, it can sometimes feel like everyone is speaking a language that you don’t understand. And if you’re already a seasoned investor, the last thing you want to do is spend valuable time explaining industry jargon to your agent. That’s why it’s so important to have an investor-friendly agent who is fluent in “investor lingo.”
To help maximize your investment profits, look for an agent who is familiar with the basic terminology, such as cap rate, ARV, net operating income (NOI), gross rental yield, internal rate of return (IRR), and gross rent multiplier (GRM). An agent who knows this type of lingo will be better equipped to analyze whether a particular property fits your “buy box” and investment expectations.
One way they’ll identify the best agents to suit your investment needs is by searching for those with the Certified Investor Agent Specialist (CIAS) designation. CIAS agents have gone through rigorous training on how to develop investment strategies, how to use 1031 exchanges, how to calculate capitalization rates and ROI, and more.
Benefit to investor: Accurate use and understanding of key real estate investor terminology is a strong sign that an agent truly understands this side of the business and will be able to handle the transaction with confidence and authority. You won’t have to waste time explaining concepts or second-guessing your agent’s competency along the way.
7. A broad network
Investor-friendly agents typically have a strong idea of what’s going on in the local real estate investment market. As Steinemann points out, they’ll know who is your biggest competition and when other investors are liquidating their portfolios, and can often get access to deals you otherwise wouldn’t have known about. They also typically have connections with contractors, lenders, insurance agents, title companies, and other professionals who can help ensure more profitable investments.
Matin adds that investor-friendly agents should have relationships with companies that make instant cash offers for properties.
Benefit to investor: Rather than spend the time to find, vet, hire, and manage multiple contractors and professionals, you can tap into your agent’s existing network and reduce the chances that you overspend on repairs or have to re-do a project gone wrong.
8. Insight into smart renovation decisions
It might be tempting to gut everything and go full steam ahead on top-of-the-line renovations, but not all properties warrant the same investment.
For example, Steinemann says that in his Baton Rouge market, it’s important to add granite countertops to get top price for a single-family home south of Florida Blvd. — but for a multi-family north of Florida Blvd., it likely won’t add value more than the cost of the granite, so laminate is probably a better idea.
“A good investor-friendly agent will know what the appraisers look for and can help you maximize your ROI,” he says.
Benefit to investor: An investor-friendly real estate agent can help you get an idea of which improvements will create the most value based on the surrounding neighborhood and what buyers are looking for in the area.
9. Property management knowledge
Maintaining and renting out properties can easily become a full-time job in itself. Many investor-friendly agents also operate property management companies, which can be a game-changer if you want to have a more passive investment.
If an agent doubles as a property manager, Steinemann points out that it’s important to thoroughly vet them by asking questions about the number of units they manage, the average rent per unit, the vacancy rate, the number of staff, and whether they upcharge for repairs and fees.
“Even if you don’t want to use them for property management, if they have a property management company, they also will know more landlords and be the first to know when those landlords want to sell,” he says.
Benefit to investor: If your investor-friendly agent offers property management services, this can free you up to focus on prepping the house for sale or rent and tracking down your next investment property.
How to find an investor-friendly Realtor or real estate agent
You can connect with local investor-friendly agents by joining a real estate investment association (REIA) group, visiting real estate investment education websites, and exploring Facebook groups.
However, there is a faster way. Online agent matching services such as HomeLight have made it easy to find agents matching your criteria and narrow them down to only the top market performers. Our agent-matching platform provides the following advantages to investors:
- List of specialties: We collect transaction data and information from real estate agents and then list their area of specialization on their public profiles. Look for an agent who lists “Investment Properties” under their Specialities — or work with a HomeLight concierge to find the best fit.
- Areas served: When you go through HomeLight to meet your real estate agent, you’ll be able to see their number of transactions isolated by year. In addition, our transaction heat map drills down into the number of transactions at the neighborhood level. To get even more granular, you can do a search for your location using the “Transactions Near You” feature.
Whether you’re looking for a multi-unit building to generate long-term rental income or an outdated property to rehab and sell at a profit, an investor-friendly real estate agent is a must-have addition to your investing toolkit.
“In my experience as an investor, many of us have to spend the time and money to market for our own deals in order to buy at the right margins, so to have an investor-friendly agent scouting the market and spending their own marketing dollars looking for good deals is a huge help,” echoes Jonathan Faccone, owner of Halo Homebuyers, a real estate solutions provider and redeveloper in New Jersey.
Christine Bartsch contributed research and writing to this article.
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