If you Google "goals", you'll literally get 900 million results in less than a second.
We know their importance, strive to set better goals — SMART goals — and work on the discipline we need to achieve them. We know goals trigger behavior, guide our focus, and sustain our momentum (like this Forbes article says).
Getting ready to buy an investment property takes financial goal setting and discipline. And when you're buying a rental, you need to work with someone who understands your goals and knows how to get you there. So, as you look for the right investment property, choose a real estate agent focused on investment properties.
Why Choose an Investor-Focused Realtor?
Like most agents, they’ll have access to “pocket listings“. Those properties are such a good deal, they never become publicly available because an agent can usually sell them to someone they know. But if your agent is used to working with investors, there’s a good chance they’ll know about properties with investment potential.
A realtor specializing in investment properties shares your goal of finding an investment. When they show you a property, they help you crunch the numbers to see if it makes sense as a rental.
They don’t emphasize the great yard or play to emotions. Instead, they calculate the cost of repairs and potential rent.
Agents who sell on the current condition or use emotional appeal aren’t compatible with real estate investors. They’re focused on a different goal.
Pitfalls of Using a "Regular" Realtor
A non-specialized realtor may not know about investment properties. If they’ve never owned an investment property, they don’t know how the process works. You're asking someone to help you purchase something they’ve never purchased. They don’t have the knowledge you think they have.
You always want a realtor you trust. It’s not that you can’t use your friend or the person who’s sold you houses before. But understand that you’re asking advice from someone who isn’t an investor. So seek the advice a property manager too. When we talk to future investors using another agent, we like to send them rental comps of the houses they’re considering. Then they have a starting place for running the numbers.
That’s the difference. Buying investment properties is a numbers game, not an “I could live here” game. Even the offer process is different. A regular real estate agent recommends an offer based on list price. They might say, “It’s listed at this price. I think they would accept an offer at this amount.”
But the goal is to find the number that makes sense for cash flow. So, when you make an offer, it’s about how much the mortgage and expenses will be compared to the rental rate.
If an agent doesn’t have that in mind, it’s frustrating for everyone. You’re frustrated because you’re crunching numbers on your own. They’re frustrated because they’re showing you tons of houses, but you’re not making offers because the numbers don’t add up.
Finding the Right Realtor for Your Investment Goals
As you’re looking for an investor-focused realtor, ask them some questions to make sure you find the right fit. Here’s what you want to know.
- What’s their personal experience with investment properties? If none, have they helped investors?
- How many investment properties have they sold?
- What’s their process for calculating a good deal?
- How will they know if they’ve found the right property for you?
Once you know those answers, you’ll have a good idea of their approach. But do your homework beforehand. You need to know your numbers and stick to them.
At LEAP, we always start this process by asking the client, “What’s your goal?” We want to know what they’re trying to do. Some people just like the idea of owning a rental property. We work with them to make their goals more specific. Other people come with full spreadsheets and say, “Don’t even show me a house unless it’s this number.” Then we find properties that fit their criteria.
The best investors know their exact numbers. In those cases, we can find something that hits the target and buy it.
Give us a call if you’re looking for an investment property — whether you have an agent or not. If you’re already working with a realtor, we can be the second opinion before you buy. If you send us the properties, we’ll send you the comps. Why? We want investors to come to LEAP with realistic expectations. If it’s good for you, it’s good for us, and we save everybody time in the long run.
If you’re not working with a realtor, we’ll assist you in finding the properties that help you reach your investment goals.