By James Knull
Let me be clear here: your real estate investing business can either grow or be stifled by the real estate agent on your team. It might even make or break your business. There is no shortage of agents in any market, and some will claim to have experience working with investors. However, there are usually only a couple who are truly exceptional at their work. You must select the agent who has the right skills to work within your business plan and be a valued member of your team. You need access to deals. Only the best of the best work with many clients, and you want to be at the top of their list!
Choosing the Right Real Estate Agent
To pick the right agent, you need to rely on a combination of a good interview, good references, and your own due diligence.
Step 1: Ask Good Questions
Q: What is the scope of the agent’s real estate experience?
A: You want to onboard an agent who has a lot of experience specifically with investment properties. Ideally, the agent will have worked with several types of projects and have years of experience doing so. Awards and formal recognition are good indicators that they have provided valuable service to their clients and company. Further, you should look for an agent who invests and has a portfolio that in your assessment is a sign of good decision making. Hiring an agent with little or no experience with investors is akin to hiring an overweight personal trainer. Not confidence inspiring.
Q: What are the agent’s regular hours of operation?
A: You want an agent who is ready to move quickly on quality deals on your behalf. They should be available for you or have a team that’s ready to handle good deals immediately as they come up.
Q: Who is on the agent’s power team?
A: An exceptional agent will be the quarterback of your entire deal. The agent should be able to coordinate all the members of a power team to bring your deal together.
Q: What types of properties does the agent represent?
A: There are various areas of expertise in the investment realm. Does the agent work with builders? Flippers? Suited houses? Houses near an LRT? Houses in suburban bedroom communities? Duplexes? Multifamily? An agent may have experience in a number of these areas, so you need to align experience with the types of properties you invest in. As you clarify what you want to acquire for your portfolio, ensure the agent understands the properties you target in specific detail.
Q: Why did the agent choose to work in real estate?
A: The answer to this question will reveal the level of the agent’s business acumen and talents. As such, the agent could very well have been successful in other industries, so why the agent chose real estate will reveal a lot about their personality and drive. It’s a competitive business. You want someone who loves real estate, who gets excited about it, and who does deals for the love of the business. Further, their energy and personality will show through when answering this question, and you’ll get to know if they’re a good fit for you.
Step 2: Check References
An agent who has years of industry experience and has won recognition from peers should be known for conducting business on a professional level.
When you speak with a referee, ask specific questions about how a deal was handled after closing. One of the differentiators between a good agent and a great one is their dedication to service after they’ve been paid for the deal. Also, ask about their knowledgeability with the transaction and property types as a whole. Finally, the telltale question: Would you use this agent’s services for your next purchase.
Read testimonials: There should be a good number of current testimonials on their website.
Check their body of work: Have they spoken at REIN? Written articles? Coached successful investors? Is the content on their website helpful for investors? Is there content, such as articles, videos, podcasts, and other resources, that are germane to the types of property you invest in?
Step 3: Initial Meeting
The initial meeting should be a chance for you to take your general ideas for investing and refine them into an action plan. If you want to stay on an exceptional agent’s radar (to receive good deals first), there are a few things you must do.
Be ready: Have your finances in order. This means having your down payment capital accounted for and a mortgage pre-position completed with your mortgage broker. Show up with your questions written down and topics of conversation ready to go.
Be coachable: You’re going to arrive to the meeting with your general ideas, goals, and directions in mind. But a thoughtful agent will be able to take your goals and risk tolerances and help refine a game plan. They give you the pros and cons of your different options and provide solid advice on which direction seems like the best fit. Be open to suggestions and learn from the expert.
Be attentive: Be present during the meeting, and take good notes. There will be a lot of powerful information to absorb, and in a fast-paced meeting, it may be hard to remember it all. Make sure you are able to retain information.
Step 4: Do Your Homework
At the end of your initial meeting, the agent should offer to send you more information about themselves. Make sure you put aside time to review that information when you follow-up on your initial meeting.
Review listings: Your agent should send several examples of the types of target properties that match your criteria. You’ll also need to review rental comparables and do the financial analysis on the properties. The agent should provide you with a pro forma for properties they suggest, but be sure to do your own number crunching.
Check in with your mortgage broker: Check back with your mortgage broker to let them know what your game plan is and to ensure it’s in line with what you’re pre-positioned for.
In a future blog post, we’ll take a look at the investor-agent dynamics when you’re in the field looking at properties, making offers, and completing due diligence, and also during closing and post-closing. This is where an exceptional agent will shine by providing exceptional service. You will be well on your way to building a winning partnership!
James Knull started his career in real estate investing in suited houses using the REIN system as his roadmap and he continues to build his portfolio today. James now invests in multi-family, is a REIN Diamond member and was awarded Player of the Year in 2014. His passion for investing led him to become a Realtor® in Edmonton. He specializes in investor clients and has worked for REIN members from BC all the way to Quebec to buy all kinds of properties in Edmonton. Contact him at firstname.lastname@example.org.