Hammered by a volatile stock market, a growing breed of homebuyers want to put their investment capital into real estate. While some are true investors (long term holders of real estate) and others are flippers (into quick turnover of properties), many have no idea what they are doing, giving savvy Realtors the opportunity to build a good clientele by teaching these stock market refugees a thing or two about real estate.

While some Realtors are put off by the brash, I-don't-need-you attitude that some of these neophyte investors have, others have a lot to gain by adapting to the new homeowner-as-investor.

One way to do that is to no longer think of a property as just a home or just an investment property.

Real estate investor, author, and real estate analysis and management software inventor Dolf de Roos suggests that agents start thinking beyond selling one house for a homeowner and instead train homebuyers to become savvy investors.

"It's a process of education," suggests de Roos. "The first thing an agent does is give the client value, that is a half-hour well spent.

Use that half hour to teach them the tricks of the trade. "Most people don't depreciate the chattel," says de Roos, "they depreciate the building because it is easy to calculate, but they don't depreciate the washer, dryer, oven, dishwasher, carpet, cupboards, etc. That can all be depreciated at a higher rate. The cost of getting an appraisal is $300 and you might save $1000 in the first year by also getting a chattel appraisal."

But first, Realtors need to be educated. "I'll see Realtors and most have never heard of this, and most have never done it. The idea is to increase the value beyond the cost of the improvement. Why doesn't everyone do this?"

Realtors have a perfect audience to start with - the neophyte investor, but first the Realtor needs to know the difference between an investor and a flipper. "They are abandoing the stockmarket and they've heard of quick riches in real estate, but the number of these people is relatively low, the increase is due to more deals. Very few investors live in a home two or three years, and then sells it. The investor buys for the long term. It is the flipper who buys a home with the intention of selling it."

de Roos continues, "A real investor iundestands it is all about the numbers, positive cash flow and a good internal rate of return."

But many Realtors are wary of working with investors because they turn out to be flippers who also want to do the agent out of his or her commission to make more money. The best thing Realtors can do, says de Roos, is demonstrate their value.

"These people think they are doing well to sell a home in a few months for a few thousand more so they want to save the three percent," says de Roos, "but an investor wants to work with a Realtor. I want my agent to get commission. I may do some of the negotiating myself, but I tell the agent 'You won't get cut out. I prefer dealing with agents. I look for agents to be knowledgeable. They know more about local deals, and I want them to review the contract, as what's in the contract may not be legal or valid. I want them to earn their commisison, I want them to negotiate, I want them to be on my side, and try to get a genuinely good price. If your client isn't like that - move on. There are plenty of investors who want to keep you in the deal, don't waste your time with the bad ones."

How to tell the difference between an investor and a user? "When a Realtor gets a call, the investor doesn't announce himself and say 'I'm an investor,' so a Realtor won't find out it is an investor in the first conversation. That's when they should be doing a lot of listening to find out how knowledgeable the buyer is, and find out if it is a homebuyer or investor, and what is the long-term philosophy of this person."

Investors will be most impressed by Realtors who are also property managers. Sometimes an investor will phone property managers to run what-if scenarios on a home he or she may be thinking of buying. 'If I were to rent this home, what would the market bring?'

It's not just a way to get free advice, but also a way a Realtor/property manager can either get a lead on a new property that may become a rental or become the rental agent, particularly if the buyer is from another city.

"I'll phone several and say, 'If I were to buy this house why should I choose you as a property manager?'" says de Roos. "If they can't answer or they hang up, we won't do business, but if they can say 'We currently have 150 properties under management and can handle a lot more, and we do credit check, drive-by every two weeks, and so on, that's more impressive."

Published: May 19, 2004

Use of this article without permission is a violation of federal copyright laws.

Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.