An investor-friendly real estate agent is an agent who can actually help investors find properties that are a good match for their business model and goals. And that means that the typical run-of-the-mill agent who deals primarily in residential home sales isn’t the best choice for investors. In addition, the demand for qualified investment agents currently far outstrips the supply. So here’s what you need to know about choosing an investor-friendly real estate agent in Metro Detroit Michigan.
The Difference Between Homebuyers and Investors
Understanding the difference between homebuyers and real estate investors is a good first step toward understanding exactly what makes an investor-friendly real estate agent in Metro Detroit Michigan. Primarily, “homebuyers want location and a house they personally enjoy living in. Investors want a return on their money” (BiggerPockets). That seems clear enough.
Confusion arises, though, because home buyers often think of themselves as and call themselves “investors” because they look at buying a home to live in as an investment. Still, “the properties primary homebuyers will buy and the properties investors (should) buy are completely different” (BiggerPockets). And having a good handle on that is what makes an investor-friendly real estate agent.
Many real estate agents just don’t fully understand investment needs. For that to happen, they need to be investors themselves or they need to have long experience working directly with investors.
Understanding of Both Investing Strategies and Models
For an agent to be truly an investor-friendly real estate agent in Metro Detroit Michigan, she needs to understand and be experienced in both of the two major investing strategies – that is, fixing and flipping and buying and holding (usually for rental purposes). There are some hybrid models, but these are the two major business models for real estate investing.
So choosing an investor-friendly agent means finding one who has demonstrable experience in handling properties for both models. You need to make sure your agent has the knowledge and skill sets to handle both.
Critical Areas of Knowledge
If your agent is knowledgeable in the following critical areas, then she is likely an investor-friendly agent:
A good investment agent will have a thoroughgoing knowledge of the market and, especially, micro-markets – those smaller, more specific areas and/or neighborhoods within larger markets. Market and micro-market knowledge will mean your agent knows the areas with properties that will serve better for one strategy or the other.
For example, some areas “will be extremely advantageous for flipping properties but not for holding rental properties. Some areas will be great for holding rental properties but not flipping. Some areas won’t be good for either” (BiggerPockets). You agent simply must possess this knowledge and understand the market advantages for either or both strategies.
NUMBERS AND CALCULATIONS
In addition, an investor-friendly real estate agent in Metro Detroit Michigan must have a good handle on the numbers with respect to evaluating properties for their investment potential. A good agent will know exactly what a cap rate is and how to calculate it. That is, your agent should know precisely how to calculate the potential return on investment.
The whole purpose of buying an investment property is, of course, to realize an appreciable return on money invested. So an investor-friendly agent should be able to tell you what the anticipated return on a potential property is and how she arrived at that figure. For example, for rental properties, your agent should be able to figure cash flow, and for flipping properties, after-repair value. If your agent can do this, then you will know you’ve found an investor-friendly real estate agent.
A good investor-friendly agent should also be skilled in that critical component of lead generation. For without plenty of quality leads, market knowledge and number expertise wind up being futile. “Lead generation is one of the foundations of any real estate business. Finding a real estate investment property may be the most important aspect of any deal. If you are not doing something every day to generate leads, chances are you will fall behind the competition. . . . Without a system in place to keep on top marketing and lead generation, things can quickly get out of hand” (ThanMerrill).
Finding an Investor-Friendly Real Estate Agent in Metro Detroit Michigan
It’s one thing to know what an investor-friendly real estate agent is, but it’s another thing entirely when it comes to finding one. A good method for finding such an agent is through referrals, but, as we mentioned, demand is greater than supply right now, so you can’t always depend on referrals. Another problem is that some markets may be more difficult and demanding than others so you may wind up having to train your agent. Wouldn’t it be great, though, if you could find a qualified investor-friendly agent easily and quickly?
If you’re ready to do that and cash in on the advantages of working with an investor-friendly agent, then contact us today! 248-330-4421