Hey hey, we’re continuing our awesome Power Team Essentials series with Pat 2 today…
If you missed the introductory post where I gave an overview of the posts to come – where you’ll also learn all about the awesomeness of Power Team Essentials – make sure you check it out.
In today’s post, you’re going to be given an inside look at how to recognize a bona fide, investor-friendly real estate agent. In my opinion, an agent that an investor can work with is one of the most important power team members.
Misconceptions about Real Estate Agents
Why do I use the term investor-friendly agent? Because not all real estate agents are created equal.
When a person studies to get their license, they’re not trained how to work with investors. In fact, a common misconception is that a licensed agent is a real estate expert.
The reality is this – being licensed only means you understand the ethical and legal responsibilities required by law for a person to represent buyers and sellers. A real estate agent’s real expertise comes through years and years and years of on-the-job training and then maybe even by investing themselves.
What to Look For
From your perspective as an investor, you need a licensed real estate agent to help you learn your market, find deals, comp properties and buy or sell real estate off the MLS.
But that’s not all, you want an agent who is…
- Knowledgeable about the local real estate market
- Invests in real estate themselves
- Going to submit creative low-ball or mass offers on your behalf
- Going to comp properties and do market research for you at a moment’s notice
- Willing to list properties for you at a small discount
- Able to provide access to an NAID number, which means they’re able to submit offers on HUD properties
Introducing My Investor-Friendly Agent
In order to cut to the chase in this post, I’m going to demonstrate an interview with my personal superstar – real estate agent, Mr. Kelly Cook, from the Kelly Cook Real Estate Group at Keller Williams.
I’ve chosen this approach because I want you to understand exactly what a superstar real estate agent looks and sounds like… yeah, that’s the handsome guy in that photo with me.
Seriously, I get passionate about this subject, because after years (and I do mean years) of me hiring and firing horrible real estate agents who had no clue how to work with an investor, I finally found Kelly Cook. (Thank the sweet Lord for bringing us together!)
For years now, we’ve been doing business together, and we enjoy a very successful relationship to this day. So fasten your seat belts as I ask Kelly pointed questions that demand honest answers. Ready? Here we go…
My Interview with (Awesome) Real Estate Agent Kelly Cook
Cody: Kelly, I want to start the interview by taking you back to that day when you signed up to attend real estate school. You attended classes, you took a test, you got your license, you connected with a broker, and now you’re at your first day of work as a new real estate agent. At this point, do you know much of anything about being a good agent?
Kelly: I’m thankful that I passed the test the first time I took it, but I still had no clue what I was doing. I knew enough to keep myself out of jail, to keep myself protected, but outside of that, I didn’t know much.
Cody: I’m a licensed agent as well, so I can relate. All I knew was that I had my license and now had access to the MLS – which, by the way, I didn’t even know how to use at the time.
Kelly: That’s right. No one teaches you. You have to go to another extra school for that.
Cody: Our point here is that becoming a good agent is all about on-the-job training and it takes a long time to get that. My next question, Kelly, is do you currently invest in real estate yourself? Are you an investor?
Kelly: I am an investor. I’ve done a few sell-flips, fix and flips. I also have a couple of rental properties that I own, so I’m definitely involved with the investing side.
Cody: You understand dealing with tenants, you understand dealing with contractors, you understand pretty much everything a real estate investor needs to go through to make a decision to buy a property and then turn it into actual profit at some point.
Kelly: Absolutely. That’s what it’s all about. I’m actually doing the same things that I’d be helping an investor do. And I currently help a number of active investors find their deals. This side of the real estate business is fun. I thoroughly enjoy it.
Cody: What’s the difference between working with a real estate investor versus a retail buyer?
Kelly: The biggest difference is that a real estate investor has no emotions involved. It’s all numbers to them. A deal has to fit their pro-forma, or fit their business model, and that’s it. The deal has to make sense financially. I enjoy working with investors in that aspect.
Cody: At this time what’s the ratio of your client-based investors versus retail buyers?
Kelly: It’s about 60/40 right now. With the market going where it’s going, there are a good number of investors who are saying, ‘It’s a good time to invest in real estate.’ This means I’m working with more and more investors.
Cody: Do you get a lot of investors making cash offers?
Kelly: We do.
Cody: Would you say a cash offer versus a conventional offer has more weight?
Kelly: No question about it. The seller will bend over backward when a cash offer is made. Many times they just want to get out of that property – to get out of that situation they’re in. They’re much more cooperative when there’s a cash offer.
I’ve seen it to the point where there’s a conventional offer of $120K, or a cash offer for $105K, and they’ll take the cash offer. Because they’d rather have that immediate money in the pocket.
Cody: Now, Kelly, we’ve done a ton of business together in the past. Would you name some of the different ways that I’ve actually benefited you over the years?
Kelly: The first thing that comes to mind is leads. You’ve given me a lot of leads that I was able to take and turn into income for myself.
Then working with short-sale deals, distressed home owners, home owners in an upside-down situation – I’m unable to help in these cases. Or in making cash offers. This is where you as an investor come into play in a big way.
Many times I can’t capitalize on a lead or I need help to capitalize on it, so I bring it to you.
Cody: So our relationship works both ways.
Kelly: It’s definitely a two-way street. Another way our relationship is beneficial is when you introduce me to others within your circle of influence. That’s powerful.
Cody: Again, it works both ways.
Another question, Kelly. Let’s talk about commission fees. Traditionally it’s 3% for the buyer’s agent and 3% for the seller’s agent. If an investor asked you to take a discount to list property for them would you do it?
Kelly: I would, and here’s why. When I make a retail sale – selling a home to the family who will occupy the home – they may not need my services again for years. An investor, on the other hand, will need my services repeatedly. And because they’re repeat clients I want to do right by them. It’s more cost effective for me to give a discount to my known clients than to go out and obtain, say, five new clients for five different properties.
Cody: On to another subject. What if an investor asked for your MLS access?
Kelly: I definitely would not hand over my personal password, but there are ways we’ve structured things in the past where we sat down with the investor and went through listings together. This would be after a strong business relationship had been established.
Another possibility is for that investor to come on board as an administrative marketing assistant for my team. In that situation, they would have access to MLS.
Cody: In other words, it has to be mutually beneficial for it to work.
Kelly: That’s right.
Cody: Tell me some of the main benefits that a real estate investor would have if they were to work with an agent like yourself?
Kelly: Actually, I get this question a lot. What separates me from other agents is that I have in-depth market knowledge. I constantly research market trends. Add to that the fact that I am a great negotiator. Negotiating is my favorite aspect of real estate, and because of that I can get the best deal possible from an investor standpoint.
Yet another aspect is the benefit for the investor who’s doing virtual investing, I can be the eyes and ears for that investor. This means that all of a sudden virtual investing becomes a possibility, whereas before, if you didn’t have a power team member on the ground to support you, it could really be tough.
Cody: Any other points you might want to add?
Kelly: It’s important to emphasize that I understand how an investor looks at deals. I understand what they might be looking for because I am one myself. I bypass all the emotions and go straight to the financials.
So there you go. You can see from my conversation with Kelly that he operates in a totally different realm than a typical real estate agent.
He understands that what I bring to the table will not be typical, run-of-the-mill deals. Also, he knows what I’m looking for, and what will be the best deals for me.
Hopefully, this gives you insight as to what you need to look for in the best agent to bring on board with your power team.
This awesome series will continue soon. In my next post, I’ll go over how to choose a reliable property manager.
Keep it real, keep it classy,
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