Four REAL Benefits of Working with REAL Investors
By Scot Kenkel, GRI CRS DAD

After more than a quarter century buying, selling, investing and speaking in the real estate industry I’m still shocked at the high percentage of agents that choose NOT to work with investors. Maybe they’re disenchanted because of the all-too-common image of a late-night-infomercial-educated-wannabe-investor or perhaps they just don’t understand the true value of working with REAL investors. Whether you decide to focus a little or a lot of your efforts on working with investors the payback can be phenomenal so let me share with you four reasons why you should consider adding investors to your business mix.  

BENEFIT #1:  REAL INVESTORS ARE EASIER TO FIND
The next time you’re out with a group of friends do a little market research experiment that will most likely open your eyes to one of the oddities of the real estate business. Once you have the group’s undivided attention ask the following two questions: “Which of you are currently thinking about moving now or in the near future?” Make a mental note of the response and then ask, “Which of you have ever thought about investing in real estate?”  

Of the two questions which one generated the greater response? My experience, and that of my students, has been that there are more folks thinking about investing than there are thinking about moving. And yet most agents spend most of their time beating their heads against the wall looking for those traditional homebuyers or sellers.

This reminds me of Willie Sutton, the 19^th Century famous bank-robbing cowboy who was asked why he decided to earn his living robbing banks. His answer; “Well that’s where they keep all the darn money, ain’t it!?” And he was right. That was in fact where they kept all the money. And I’m sure that after that earth shattering historical comment Willie rode off into the sunset on his horse while wondering why everyone else didn’t come to the same conclusion. Of course I’m not suggesting that you start robbing banks but I do believe you should use some of Willie’s wisdom when deciding on how to grow your real estate business.  

BENEFIT #2:  REAL INVESTORS ARE LOGICAL – NOT EMOTIONAL
We’re all emotional beings capable of making logical decisions. More than likely though, at least when it comes to buying or selling a home, our logical brain can sometimes be over-ruled by our emotional and more sensitive brain. Emotions are complex and tricky little buggers when they enter into the arena of buying or selling a home. Predicting who will win; logic or emotion, is as good a guessing game as it gets.  

We’ve all had to deal with them at one time or another and the end result when emotions do show up is absolutely unpredictable. I believe more real estate deals fall apart because of emotions-gone-wild than bad credit. And all you can do, as THE agent is to sit back and watch. It’s painful to say the least.  

Investors, on the other hand, don’t tend to get stuck in the emotional sand trap that traditional buyers and sellers often get stuck in. Their primary concern is the value of the deal. If the deal’s a dud then they’ll just move on to the next opportunity. No hard feelings, it is just a business decision. No cussing, screaming or crying on the phone. Nothing!  

Buyers, especially first-time buyers, are much different. You’ll never hear an investor screaming on the phone at you the day after the closing because they can’t believe the sellers moved out taking all of the light bulbs out of the fixtures. But it wouldn’t be that surprising to hear your emotionally turbo-charged buyers crying, “How dare them!! We’ll sue them till they bring back those light bulbs.” Unfortunately, when they do call you – and they will eventually, all you can do is to calmly sit back and let them vent. Before you know it you’ll be running to the store to buy a couple boxes of light bulbs. Lucky you!!  

BENEFIT #3:  REAL INVESTORS CONSUME LESS OF YOUR TIME
The average homebuyer, as reported by NAR in their “2006 Profile of Homebuyers and Sellers”, spends about eight weeks searching for the perfect home. Not only is this a very time consuming process but it can also wreak havoc on an agent’s life. Even after the ‘perfect home’ is found there’s still another 30 to 45 days of hoping and praying while the unknown outcome of numerous inspections, appraisals and miscellaneous negotiations take place. It’s no wonder the average consumption of antacids is so high among members of the real estate profession.  

The only information a REAL investor needs before deciding to purchase or not is the property address, an overview of the work needed to get the place in tip top condition and the A.R.V. (After Repair Value) once the house is fixed up and/or put back on the market for resale. With that information a REAL investor can quickly decide whether this deal is for them or not. If it is they’ll take action, if not they’ll just take a pass. REAL investors don’t need nor want to waste their time or yours by endlessly searching for the right DEAL.  

One of my more successful private students has established a policy with his pool of investors that once he presents them with a DEAL they have up to four hours to decide whether its for them or not. He says that most of the time they decide while they’re still on the phone with him talking through the details. He never shows them the house until they’ve decided and his average amount of time spent selling a house is somewhere around an hour. That’s a lot better than spending eight weeks with a buyer searching and another month and a half hoping and praying that everything turns out ok, isn’t it?

BENEFIT #4:  REAL INVESTORS BUY AND SELL MORE OFTEN
Find one prospective homebuyer and you might be lucky enough to help them buy and/or sell every five to seven years. Of course this is dependant on your ability to service and satisfy their sometimes unpredictable needs and wants. Within a handful of years, with a little luck, a lot of hard work and a solid follow up program of course, you may find yourself in the enviable position of reaping the rewards of a business built on a foundation of repeat customers and referrals. This is the path most newer agents hope for.  

On the other hand, go out and find one REAL investor to work with and you may very well have a customer that buys and/or sells every year. In most cases you’ll be able to help them do multiple deals each and every year and the more value you bring to your investors the more investors you’re going to have wanting your deals.  Best of all the nature of the work is incredibly predictable and absent of the day-to-day emotional roller coaster tendencies common when working with traditional home buyers and sellers.  

Once you’ve made the decision to focus some or all of you effort on working with investors you’ll start seeing the business in a much different light. Sure, investors can be difficult at times but so can traditional homebuyers and sellers, right? Investors are just a whole lot easier to find, they’re not nearly as emotional, they take up a lot less of your time and they buy and sell more often than your average home buyer and seller. All you have to do is decide whether there are enough reasons for you to devote some of your energies to working with investors.  

What do you think Willie Sutton would do if he found himself in the real estate business today?  Do you think he’d be satisfied working with traditional buyers and sellers or would he go with REAL Investors -- where all the ‘darn money’ could be found? 

About the Author: Scot Kenkel is the President of the Success Learning Institute, LLC, an organization focused of promoting Success through Learning. Scot’s a self-professed, recovering dad-a-holic, training humorist, and overall smart guy that’s been involved in edu-taining small business owners and professional real estate agents for over 15 years on how to grow their businesses using cutting edge sales and marketing techniques. Scot’s style of teaching is energetic, fast-paced, down-to-earth, easy-to-follow, sometimes hilarious yet always informative.

Find out more about Scot and his other topics and courses by visiting his web site at www.SuccessLearningInstitute.com. You can also contact Scot directly by email at Scot@SuccessLearningInstitute.com or by calling his office at (888) 831-5945.