As "The Foreclosure Empress," I've had the pleasure of working with many great investors and the misfortune of working with some that were not. I have found that there are three types of investors: the beginner, the professional, and those that fall in the middle.

The beginner and the professional investor usually want to establish a relationship with you if you can provide the inventory, the knowledge, and have the right attitude. There are a lot of buyers that want to become investors, however, there is more to becoming an investor than most buyers realize. This is where you, the expert agent, begin.

Working with investors takes knowledge and hard work. The agent may have to present many properties before he or she understands what fits the investor’s criteria. They must be highly organized and show confidence in their product knowledge. Most importantly, it is the agents’ responsibility to determine whether the investor is “real” and worth the time and effort necessary for this relationship to work.

There are very few agents willing to work with a beginner investor, because it takes more time, energy and patience while you guide and educate them through the process. Beginners don’t purchase as many properties as the professional investor. However, it’s easier to find a property for the new investor because they are eager to buy their first property. Many times the beginner just wants to start their real estate portfolio. They want to become a Landlord, or their threshold for profit is lower.

The professional investor has higher standards, (i.e. profit usually has to be a 25 percent return on their investment or better) so the inventory is a little more difficult to find. In their perfect world, they want to buy it, fix it, and sell it before the first mortgage payment is due, providing that they are not using cash to make the purchase.

Reaching out to the professional investors may be difficult at first but it can be very financially rewarding. The professional investor doesn’t really believe they need an agent. Many of them think the commission that you are making is cutting into their bottom line. You have to prove to the investor that you are a professional and capable of finding them great deals.

As your partnership grows stronger with your investors, they will rely more and more on your expertise. You will learn what they want and you will know when to pick up the telephone based on your analysis. This is why it’s important to be organized, keeping track of your phone calls and the inventory that you discuss.

An agent may not be able to research all properties due to time constraints and the fast turnover of foreclosures. Most investors have a neighborhood or two that they concentrate on, so adjust your searches accordingly. Keep in mind that it may be a waste of time to analyze a property that is located an hour away if the investor isn’t willing to travel more than 20 minutes. Set your searches for each investor and check the inventory everyday.

If the investor is a true professional he or she will have a system set up to figure the profit margin. By showing the investor that you can do this as well if not better, they will keep you as their agent for a long time. Most importantly, this allows the investor time to view properties since you’re doing some of the work for them.

One of the key elements to finding a good investment is timely property valuation. There are several sources on the Internet that will give you what you need, however; the most impressive one that I recommend is ElectronicAppraiser.com. The $29.95 is well worth the cost and the report includes several recent comparables, price per square foot, price trends within the county and zip code, tax information, local schools, businesses, churches, hospitals and other information. The report shows just about everything except the photo of the property and the valuation is instantly produced. The results of this report will determine whether you meet the investor at the property and write an offer or move on to the next one.

Once the property has been renovated make darn sure that the seller uses you as the listing agent. Now you’re receiving commissions on both sides of the transaction. Many times the investor will list the property on the day that they actually own it to try and create some immediate interest.

Your goal is to keep the investor happy. Be diligent and communicate often. Make them aware of new property immediately. Never prejudge property, you never know what the investor may consider. Remember, if you keep inventory in front of them, they will continue to use you as their property expert.

The professional investor is also a good source for trade references such as plumbers, electricians, drywall, tile, roofing, foundation and other contractors. The first time investor is always looking for a contractor, so you may be able to help the investor and the contractor at the same time. Important!! It is recommended that you give much thought to referring trades, since your reputation is on the line. Be sure to check if the contractor is licensed and insured.

Last but not to be forgotten: You will never get rich selling real estate, but you will owning it. Agents become so involved in selling that they have a tendency to let great deals go by. Don’t be afraid to take advantage of the opportunity when it presents itself. With your product knowledge, hard work and perseverance, making an investment in real estate may change your life forever!

Published: August 13, 2003

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