Selecting a Top Investment Property Realtor
7 Tips for Selecting a Successful Realtor Partner
“Now, one thing I tell everyone is learn about real estate. Repeat after me: Real estate provides the highest returns, the greatest values and the least risk.”
What is an Investment Property Realtor?
An investment property Realtor is someone who has experience doing what you are trying to do with your real estate investing goals in the area you wish to do business.
Sadly, most Realtors do not even own investment real estate themselves.
You want to work with a Realtor that understands the economic and demographic factors that affect housing demand in the area you are interested in investing.
Ideally, they will already be investing in the area you are interested in and can help you find property that meets your investment buying criteria.
They should also have a team of professionals to help you with inspections, underwriting, insurance, tax considerations, legal considerations, contractors and property management needs.
An investment property realtor could be a commercial real estate broker or a residential real estate broker depending on the agent’s experience and your specific goals.
There are many criteria to help you select the best investment property Realtor for you and your business.
Criteria for Selecting an Investment Property Realtor
1. Investment Experience
It is critical the investment Realtor you select be an active investor themselves.
Preferably, they should be actively investing in the kinds of deals you are interesting in doing in the area you are interested in doing business.
It will save you time and money working with an experienced Realtor and they will likely accelerate your investment outcomes having them as a partner.
An investment Realtor that has investment experience themselves is a crucial part of your success team.
2. Local Knowledge
An investment property Realtor should have thorough knowledge of the economy in the area you are interested in investing, what is driving jobs and population to the area, present and future planned developments and where population growth and property appreciation is likely to be favorable.
They should also understand the basic regulations of the investment property type you are interested in like short-term rental regulation, rental property licensing and regulation and zoning requirements for example.
Having an investment Realtor with local knowledge is a critical part of your success team.
3. Ability to Underwrite and Evaluate Deals
An experienced investment Realtor should be able to help you validate the current value of the property and, if a value add property, what the future value and rents will be after improvements are made.
The Realtor should be able to help validate rent rolls, actual leases, total income and expenses the last few years to help you calculate Net Operating Income and the potential offer price and cap rate as well as cashflows, cash-on-cash return and the internal rate of return on the investment.
If the property is a single family rental up to a fourplex, the investment Realtor should be able to determine market price as well as validating rents and leases and the potential value after improvements and increased rent.
An experienced Realtor will also have a team of professionals to help you with other aspects of the due diligence like inspections, tax considerations, financing and legal/governmental requirements.
An experienced investment property Realtor is an invaluable part of your success team.
4. Knows Financing Options
Depending on your investment goals, knowing the financing options to achieve your goals is imperative.
An experienced investment property Realtor should understand whether short term financing or long term financing is best.
Whether hard money, private money, a joint venture, partner, bridge loan, construction loan or bank loan would be best for your specific situation and the potential vendors and experienced partners for it.
They will also know how best to get you or your company pre-qualified for financing and in place in time to do the deal.
5. Strength of Their Network
Relationships are key to success in most business ventures.
A top investment property Realtor will be continually cultivating relationships with investment property owners, other investors, government regulators, lenders and private money sources.
They should be able to add more value to the transaction than the amount of their commission as a result of their experience and professional network.
6. Knows Values, Exit Values and Cap Rates
In order to have optimal success with your real estate investments, you must have confidence in your numbers.
Your experienced investment Realtor partner should be able to help underwrite or determine current value, highest and best use of the property, current market cap rates and value after improvements and exit cap rate.
Having an experienced Realtor partner will keep you from making poor investment decisions based on faulty assumptions and maximize your return on investment and help minimize the downside risks.
7. Can Source Off Market Leads
Some of your best deals will come from properties that are not listed and are off market.
Because of the experience and relationships of your investment Realtor, they will have access to properties before they become available on the market giving you a competitive advantage as an investor.
A top investment Realtor is an invaluable asset to your investing career.
“It is critical the investment Realtor you select be an active investor themselves. ”
The Value of a Top Investment Property Realtor
-A top investment Realtor will take the time to understand your unique investment goals, preferences and risk tolerance.
-They will cater their services to your needs and preferences and act as an advisor and advocate for you to maximize your outcomes and minimize risks.
-Bottom line, they will provide more value than they receive in compensation if they are any good.
How Arbor Advising Can Help You Achieve Your Goals with Real Estate Investing
The experienced team of real estate professionals at Arbor Advising can help you with your next investment.
We pride ourselves on being tireless advocates for you and your business.
Contact us today for a complementary and confidential consultation to discuss your real estate investing goals and preferences.
To your success!
Arbor Advising has a passion for helping people buy, sell and invest in real estate. We believe real estate is the best way to create passive income, grow your wealth and provide inflation adjusted returns in retirement with fantastic tax benefits.
Want to learn more? Contact us.
Disclaimer:
Always speak to your CPA, investment advisor and attorney before making any investment decisions. Past performance does not guarantee future returns. Arbor Advising seeks to educate and does not endorse any specific product, service or investment.
