I recently received this question from my account on BiggerPockets, I thought it was a great question that we all face at some time as Investing Realtors® so I thought I would share!
“I am interested in making the move from a “typical” agent to a REI/Agent. I have been reading through the scripts and feel like I should start making the calls but I don’t feel confident that I can secure a seller without having a buyer.
I know that this a question of “What came first, the chicken or the egg” situation.
My question is what should I start with? My business? The script? Buyers?
I think I might just be overwhelmed with all the information I read/listened to over the weekend but I feel like it’s what I needed to fuel the fire. Thank you again for your time and any advice you can provide!
One of the keys of success in our business is humility. One of the reasons why I know this listener is going to make it in this business is because he isn’t afraid to just ask a question.
The ultimate question… When you are trying to start investing in real estate or wholesale real estate as an Investing Realtor®, is where to start.
It’s not like everyone else. Oh sure, any unlicensed person could just plant any bandit sign in the street, do direct mailings, put a property under contract and try to sell the interest.
However, when you are a Realtor®, the stakes are much higher. It’s not like you just lose your license. You lose money, or potentially your freedom.
As a Realtor®, you are held to a higher standard than that of the public. Every week or so, my email box is fresh with a new report from the Department of Real estate about some LLC, or person or persons who have either lost their license, been prevented from doing business, or had a cease and desist order placed on them.
If you are a Realtor®, you know it’s true. You get them too.
The Danger Is Real, So Are The Rewards
There is no rewards without risk. However, as a Realtor®, you can minimize your risk by thoroughly disclosing your status as a Buyer who is also a Realtor®.
The danger of failing to accurately disclose your status as a Realtor®, accurate pricing, and intent to resell can result in treble damages or more in some states. So be certain that your self agency disclosure is separate, in writing, and prior to meaningful conversations.
Chickens AND Eggs!
So let’s get on to answering these questions!
To take Phil’s point again, let’s press Control “V” and see what happens.
“What should I start with? My business? The script? Buyers?”
Aside from minor editing, that’s pretty much what his question is. However, I believe it also goes much deeper than that.
When you are an Investing Realtor®, its a question of assessing “level of importance” to items.
To simply answer the question, the answer would be “YES.”
But then that’s not usually a good enough answer. It wouldn’t be for me, and certainly wouldn’t be for a pro like Phil. So let’s briefly discuss how to start as an Investing Realtor®!
First Steps… You Must Have Inventory.
Everything in your being as a Realtor® screams “arrrgh! I gotta find a buyer first!”. The problem is, YOU are the Buyer! The biggest challenge I see people facing when they are either new, or in a slump is understanding this very key point.
It seems stupid I know. However, every single problem with a Seller you have as an Investing Realtor® stems from a miscommunication with them that you are a Buyer first, a Realtor® second.
This concept is so key to your success. Only Buyers and Sellers are on contracts. Realtors®, attorneys, and escrow officers are mere elements to the transaction. Necessary portions no doubt, but as a Principal to the transaction, YOU are the “shot caller.”
As such, you, along with the Seller, wield incredible authority within the contract. As a Buyer, who happens to know the local laws, rules, customs, and practices of the real estate market, you are incredibly formidable to those who stand to oppose you!
However, the MOMENT you step out of your “buyer-hood”, that is the minute problems begin.
So remember, in order for any business to thrive, it must have inventory to sell. Whether you are selling shoes like Al Bundy, or million dollar homes; Those who control the inventory, control the market. Therefore, your first job every day is to generate a lead.
Your First Hurdle
Aside from your mindset, your first hurdle in your business will be financing. Where do you get the money you need to be a “buyer” in this market? What if you have no credit? Have bad credit? The good news, I have answered this at great length in two of my podcasts , both of which we talked at length about how to obtain transactional funding, or use the buyers funds to close. Additionally, we talked about how the escrow process works behind the scenes to ensure the money went to the correct place.
One of the primary challenges you will face when dealing with other Realtors®, Title Officers, Attorneys, and potential customers as a practicing Investor Realtor® is ensuring people remember your status as a principal.
Oftentimes, it all depends on how you approach the situation with the potential Seller. Remember, they have to know that you are not the Realtor® who will list their home. It requires a level of honesty.
I prefer to “Mirandize” my Sellers prior to our discussions. It makes sure they know my potential interest as a buyer and helps keep the disclosures open.
“Mr. Seller, The State of Arizona would like me to inform you that I am a licensed agent in the state and anything you say, can and will be used against you in negotiations!”
If said with an element of humor, the Sellers will always be ok with it, and they know where they stand. (Premium Podcast members can hear actual conversation of this in a presentation here.)
A Specific Plan to Start or Re-Start Your Business!
When you are starting out new, as an Investing Realtor®, you would definitely be well advised to check out Episode #364- A Real Estate Business Plan For Investing Realtors®.
In that episode, I shared a six point plan for you to integrate your Social Media, Skype, Landvoice, Investor Carrot and other platforms to provide a 7 day a week, 24 hour a day lead generation platform.
If your business is suffering at some point, then you need to take immediate action. In that circumstance, I would recommend Episode 332- What to do When your Business is Code Blue!
The steps one needs to take to re-start their business is different than that of one who is starting over. You have more things to work with dependent upon your skill level and basic ability.
Reach For A Bigger Plate!
Thanks for the kind letter! I hope that some of the resources we have will help you reach your goal. If you are looking for specific answers to the most common questions, you may want to check out our TenMinuteSkill FAQ page. It’s chock full of information as well with directions on how to get even more information!
With over 365 episodes of hard hitting information within The Red Pill Investor Podcast, as well as our ever popular Premium Podcast Plus! I am certain that we can help you achieve your goal of becoming a powerful Investing Realtor®!
I hope we can help you along the way! Feel free to reach out and let me know!
Do YOU Have a question you want me to answer? Shoot me a quick email and let me know!