How To Win a Real Estate Investor's Loyalty And Business
Real estate agents and brokers often squander good opportunities to grow their business with real estate investors because they instinctively look merely to close a transaction and pay little attention to building a long-term relationship with the investor.
Closing a rental property transaction is paramount to selling real estate, of course, but keeping investors loyal enough to return with repeat business later is even better.
In this article, I want to show you how you can create a relationship with real estate investors that will keep them loyal to you over the long term. It’s not about style and panache but about embracing a concept I call “partnering with the real estate investor.”
Here’s the idea.
Appreciate the Investor’s Money
Appreciate the fact that the money for any real estate investment might be coming out of a fund setup by the investor to send a son or daughter to college. That it’s not likely the money is the result of a windfall, but the result of hard-earned bucks scrimped and saved by the investor to serve the family.
Even if the customer appears to have already succeeded at real estate investing and made enough money to service the family ten-fold, don’t lose sight of the fact that he or she still has concerns about the money and surely doesn’t want to lose a penny of it with unsound real estate investment decisions.
Care How the Money Gets Spent
Convey to your customer by your actions and deeds that you are as committed as they are to protect their nest egg and genuinely do care how it gets spent.
A snippet from a television commercial several years ago illustrates it best. During a conversation with his financial adviser and the subject of children comes up the bewildered customer wonders, “Is he talking about his children or mine?” In other words, the customer had doubts about whose interests the salesperson had in mind.
You must eliminate this doubt if you hope to build long-term relationships. Real estate investor partnership requires trust. You must assure your customer by actions and deeds that you will treat their money as if it was your own and are as committed as they are to protect it.
Be prepared to warn an investor against rental properties that are not good real estate investment opportunities - even if it means losing a sale. Bear in mind that the real estate agent who has eyes only for the commission (perhaps to the detriment of the investor) is less likely to establish a trust relationship that could over time evolve into multiple rental property sales then the agent looking just to take the money and run.
Give Reliable Advice
Above all, know what you’re talking about regarding real estate investment. For nothing else you do will hold water unless the investor can rely upon your real estate investing judgment.
So do some homework in order to adequately prepare yourself to provide the real estate investor with sound investment advice.
- Learn the basics about real estate investing in order to discuss investment property correctly. At the very least know the difference between capitalization rate and gross rent multiplier and be able to create an APOD. Numerous sites on the web are devoted to real estate investment definitions and formulas where you can learn what you need easily.
- Understand your local rental property market. Know what rental properties have sold for and are currently listed for - breaking it down by cap rate, cost per unit, and cost per square foot. You must be informed about market values so you can distinguish between a good real estate investment opportunity and a poor one.
- Run the rental property numbers yourself and create your own cash flow presentations. This is easy with good real estate investment software. Real estate investors will trust you more when they can rely on you to substantiate the data you present to them.
Winning over real estate investor loyalty is not difficult. Even if you lack style and panache, real estate investors are generally ready and willing to create a long-term partnership with any knowledgeable real estate agent that can be trusted to assist them in making sound real estate investment decisions - whether they drive a Mercedes or not.
Here’s to your success.
About the Author
James Kobzeff is a real estate professional and the owner/developer of ProAPOD - leading real estate investment software solutions since 2000. Create cash flow, rates of return, and profitability analysis on rental property at your fingertips in minutes! Learn more at www.proapod.com
ProAPOD also provides iCalculator - an online real estate calculator that enables you to learn dozens of real estate definitions and formulas as you calculate. You save 64%. Learn more at real estate calculator
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