5 Reasons Real Estate Agents Don't Like Investors

5 Reasons Real Estate Agents Don't Like Investors

If you ever talk to savvy investors you will undoubtedly here one of them say something to the effect of, "Yes I have several agents I work with to make offers for me".  This article points out why investors have an exceptional ability to get under the skin of professional real estate agents.

1. Low loyalty - Good real estate investors do the the same thing that investors in other areas of the financial sector do: they go where the deals are.  Investors are inherently going to gravitate towards where the opportunities to make money are (duh?)!  Most real estate agents will prefer to have a buyers representation agreement with their buyers the same way listing agents will not likely list your property without an exclusive right to sell agreement.  Real estate agents want to ensure that they're getting paid for their work!  The last thing they want to do is spend copious amounts of time working with you for you to purchase something from another agent.
2. Low prices - Real estate agents get paid on commission; a percentage of the final sales price of the property.  Investors are typically not trying to purchase the expensive $400,000 brand new house on the hill, they're shooting to get the lowest possible price on the lowest priced houses on the market.  Low pay equates to low incentive to work hard for an individual.  The only positive aspect of working for an investor is that they are likely to be repeat buyers and they will have to sell their property after it's been repaired.  
3. More work than average - When Jack and Jane are trying to purchase their dream home it's likely the agent will have to spend a good deal of time determining what the buyers are looking for and will specifically target houses for them to look at.  When they find something they like, they make an offer, and the agent gets paid.  With an investor, the client is simply looking to get a deal on a house they can make money on.  In reality, and I often say this, every house is a buy at the right price.  So can an agent be reasonably expected to slave over every house for sale in a particular area to figure out which house is a deal, which isn't, what has potential, what already as a contract working on it THEN coordinating with the buyer to visit the property, estimate the repair costs, account for it, then make an offer.
4. Specialization - Most real estate agents look at a broad range of transactions involving many different sub specialties of the business.  I like to compare this to doctors.  I broke my tibia and fibula about five weeks ago which gave me a need for a very specific kind of medical service.  Instead of having the ambulance swing by my general practitioner's office I went ahead and had them drop me off at the ER for an orthopedic surgeon to get to work.  The orthopedic surgeon has experience and a skill set specialized to my needs at that time that my general practitioner simply doesn't have.  The same can be said for looking for investment real estate.  Your general real estate agent can tell you what to look for but doesn't spend their day looking for it the same way my general practitioner knows my leg is broken and might even (probably not though, sorry doc) know how to fix it but doesn't do it on a daily basis.  A point of interest - Likewise, when I have a cough, I'm not going to go see my orthopedic surgeon, I'm going to my GP.  This is similar to listing your finished product!
5. Time frames - No one likes to be pestered, not even me.  If a house comes on the market that an individual has the opportunity to make $50-60k on, the free market is not going to wait for you to make your mind up.  Every deal is extremely time sensitive; you snooze, you lose.  So when a deal comes out on the market you need to hope that your real estate agent is 
1. Sitting in his office
2. Constantly running CMA's to figure out if somethings a deal
3. Remembers to call you
4. Get's with you to go look at the property
5. Can come to a number that you'd be happy with purchasing for
6. Draft up an offer
7. Get that offer accepted before anyone else 

UTSA Presentation and Hard Money

My first trip back to UTSA Real Estate Finance and Development!

Well to all the Roadrunners out there in the REFD program I hope this can be some help for your project.  There's tons of other great material on this site such as hard money calculators, deals to work from, analysis of sub markets in San Antonio, success stories from some of our clients, etc.  This is the Prezi I used in class if you wanted to refer back to it.  As well, you can access my Real Estate Development final project on my alternate site here.  

Court House Auction Advice for New Investors

Court House Advice for New Investors

In my line of work I do a lot of wholesale real estate deals.  Currently in San Antonio I average about 20-25 deals a month.  I see quite a few investors who get frustrated after a while and begin to think that they are smarter than the system.  They get the idea that somehow, while juggling a full time job and one or two rehab projects that they can get better deals by going to the courthouse auction to purchase property.  Let me give you some stats for December of 2012 to put this in perspective for anyone who this idea has occurred to:

In December 2012:

• 863 Properties were posted
• 274 Were actually called for sale
• 211 Houses were purchased back by the lender/lien holder
• 63 Were purchased by private investors
• 23 of these houses were purchased by national REIT's

This means that 4.6% of all properties posted were sold to individual investors.

I work as part of a team that looks at every single property listed and runs title work on every single house in order to obtain even a small slice of that 4.6% of houses that have investment potential.  These 40 houses get competitive.  Many times rookie investors will bid properties up to the point that they no longer make sense as an investment.   I spoke with one of the larger buyers who had purchased two houses in a neighborhood off 35 and 1604 that I am very active in.  The last two houses I had bought I estimated being worth about $100,000, needing between $15-20,000 in work.  This means I sold them at $53,000- $58,000.  The houses that they had bought were around the $65,000 price mark.

A good lesson to take away from this is that often times deals that your professional real estate investment firms can find you are more than often better than deals that can be obtained elsewhere.  Don't discredit a lead source because deals may have come from actively listed houses.  If you purchase at the auction there's a high probability that you're over paying on a percentage wise basis for a house you can't even verify the condition of.  It equals a lot of work for minimal reward.