The field of real estate is attractive to those looking for a challenge and many people are drawn to real estate for the possibility of more freedom and extra income. One of the fields that dominates the real estate industry is that of a licensed real estate agent. Real estate agents can be either a sales associate, broker associate or the managing broker on file. A sales associate must be licensed for two years before being able to apply and test to become a broker associate or broker. With over 220,000 real estate agents in Florida alone, how can you ensure that yours is working in your best interests and understands enough to truly help you?
Becoming a real estate agent is fairly easy with a low barrier of entry. Depending on the course you take and your local association, people are able to get started in the real estate industry for less than $1,500. A few weeks of training and a state exam is all it takes for an individual to be out practicing real estate and assisting others with the biggest purchases of their lives. While that is a great thing for many it can also be a scary thought. My biggest takeaway from the course when I started as an agent was how to limit liability with little direction on how to actually do a transaction. Your agents training really takes place at the brokerage they choose so do your research on that companies reputation in your local market.
To my knowledge none of the big box brokerages, or little ones for that matter, teach their agents to any great length about real estate investing. During my time at a big box brokerage I never even heard of the word wholesaling, buying notes, flipping or hard money lending. We weren’t taught that there were hundreds of deals occurring every month off of the local listing service and what an off market deal really looked like. This is extremely crucial to consider when choosing the right team to work with. When I did my first wholesale deal the compliance team wasn’t comfortable with my contract being assignable if that gives you any idea as to how challenging it can be to find experienced agents that have invested themselves. This same compliance team was composed of individuals who had been in the real estate game for 20+ years!
That is why we decided to launch our own real estate investment brokerage where we teach agents how to work with renters, traditional buyers and sellers but most importantly investors. A lot of our agents have wholesaled, fix and flipped and completed development deals in our market. If I had to guess I’d say less than 2% of real estate agents know and understand what investors really need to know when analyzing deals and having the ability to connect them with the right power team.
Now that you know a true, investor friendly agent is rare to come by, where should you look? If you’re attending local meetups or real estate investor association (REIA) meetings that would be a good place to start. Look for the host or owner of the meetup and ask them for a few references. In addition, ask them this question: “If you were me and you wanted to meet the three biggest investors in the room who would you direct me to and how can I add value to them?” If you can identify current wholesalers, flippers and landlords, ask who they use as a real estate agent. This will be the fastest way to find someone that can help.
Once you’ve located a potential agent you’d like to work with ask them a few of the following questions:
- Are you full time or part time?
- What has your personal experience been as a real estate investor? Other than your personal residence have you wholesaled, flipped, bought properties as a landlord or lent your money out? If so, in what markets and can you explain one or two of the deals to me?
- Where did you learn about real estate investing?
- How can you help me find true off market deals, ones that are not on the local listing service?
- Can you tell me what an assignment of contract is?
- Can you tell me what cash on cash means and calculate it for me?
- Do you know how hard money works?
- What is the difference between hard money and private money?
- Have you ever had a buyer use a form of self-directed IRA to invest in real estate? If so, in what capacity?
- Who is your go to real estate attorney, CPA, Title Company, handy man and insurance company?
There are a few other factors to consider when choosing an agent but one of the biggest concerns should be how your personalities fit. Your goal should be to find one that is driven and responsive. Finding a real estate agent that answers their cell phones is a great start!
Be respectful of your agent’s time and give them a chance to show you how they do business. From our perspective as an agent, the worst type of client is one that is indecisive and wishy-washy. Commit to your agent when you find one and they will go to great lengths to be the best they can for you.
There is a lot more material to cover on the subject. If you have more questions please e-mail myself or give me a call.
Jeremy Kloter
COO – Asset Manager – Realtor
C: (813) 610-0015
Jeremy.Kloter@OutFastRealty.com
