Many investors focus on purchasing real estate outside of traditional retail routes. While in many cases, this is a successful and necessary opportunity for experienced investors who specialize in their chosen markets, what happens when an investor decides to expand into a new market?
Choosing a new market requires a lot of time and research. And at the end of the day, no amount of research and analysis can replace the knowledge of a great local investor real estate agent.
Local agents are great resources and will have the insight to help investors identify areas of town that have the best locations and fetch the highest rents. They will also be aware of upcoming developments that will allow investors to enter larger areas before they become investment hot spots.
why do you need a rock star
What if an investor is not sure which market will be their next market? What if they need to do multiple searches to narrow it down? Is it best to work with multiple agents in each market, or just one?
When entering a new market, investors need a rock star agent to learn the market. Besides, all they need is a rock star agent.
The thing about top performing agents is that they know other top performing agents. These relationships are the most powerful tools any investor has when it comes to finding great deals.
A rock star agent will have closed many investor transactions and have good relationships with all the other agents, wholesalers and developers in the area. These relationships give said agents access to most properties and best deals before they become public.
Connected: The Surefire Way To Find The Best Real Estate Agent In 3 Simple Steps
get talent
So, how do you, as an investor, identify a rock star agent in a new market and establish a working relationship to leverage their connections to build a successful portfolio?
ask the right questions
First, you need to make sure you’ve got a rock star. How do you identify these top-performers? By asking questions, of course! Here are some good ones:
- “How many transactions have you done in the last one year?” The more deals an agent handles, the more relationships they will have and the more value they bring to the table.
- “How many of those transactions were investment customers?” If they’ve sold 27 primary homes and two investments, they’re probably not the right agent.
- “Do you have any investment properties?” While it is not necessary for a rock star to own investment properties, it certainly makes a difference if they have a lot of investor client experience. Investors understand what other investors are looking for, how they think and what they value in property. They have been in your place as a buyer, and that experience cannot be taught.
Connected: How to Find an Investor-Friendly Real Estate Agent
be honest
Second, you have to be 100% honest and transparent with your agent. Tell them you’re not quite sure yet that this is the market for you, and ask them to give you an overview of the overall market, best sectors, returns, and where they think the market is headed. Provide your honest perspective. ,
Make sure you paint a clear picture of where you are in your decision-making process, but also let them know that you won’t talk with them if they aren’t serious about narrowing down to one market and building a portfolio there. do. ,
When an investor says, “I’m looking in 27 markets across the country for the best deal,” it tells agents that the investor is not serious, not focused, and is likely a waste of their time.
However, when an investor says, “I’ve done a lot of research, and I’ve narrowed it down to three markets. I have this list of questions about you. Can you clarify a few things for me?” This tells the agent that you’ve spent a lot of time researching and narrowing down. This shows a great level of seriousness, and a rock star is more likely to take you on as a client.
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be polite
Lastly, be polite. You may be a big fish in Little Rock, Arkansas, but you’re a newbie in Greenville, South Carolina, and that’s okay. Every market is different, and a good agent can explain what works and what doesn’t in their market. Kicking in the door and announcing that you are using 15 agents and that whoever will get you the best deal will be the one you choose, leaving all the newbie agents out with no experience and no relationships is a way to be ignored. Great way.
Working with multiple agents is actually counterproductive for the investor, as most deals are going to happen with the top one or two agents. The top one or two agents are going to have a list of clients that they are going to call well before they call one client they know is working with 10 agents.
Another great way to get ignored is to ask an agent for a cut of their commission right out of the gate. While there is a time and place for commission waivers, the first deal it is not. If you haven’t even built a relationship and you’re already telling them you don’t value their service, why would they bring you good deals?
Good deals go to good customers. Don’t let your ego ruin your shot at good deals and cause you to miss the boat on a potentially great market.
rocking out
In short, the best way to start a portfolio in a new market is to narrow your search to just two or three markets, find a top-performing, rock star agent in each market, do your research and your intentions. Be honest and transparent about , and be polite. Each new market is a learning experience and a potential opportunity for significant wealth-creation.
Be a sponge and learn everything you can from local experts. The more you assimilate, the sooner you’ll be an expert yourself, and you’ll be ready to replicate the system and scale!
How have you found success with agents in new markets?
Share your tips in the comments below.
Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
