Real estate investing is awesome and many people starting out want to know if using a realtor will get them on the right track the quickest. As a realtor, you should 100% be using your network to invest. As a newer investor, using a realtor with no investing experience will probably not be the best way to go.

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Realtors and Amateur Investors

As an amateur investor, the worst thing you can do is work with a realtor with no investment experience. It’s not because they are bad at their job, but it’s because they are taught to approach properties differently than an investor would. It doesn’t mean realtors have no value for the amateur investor, it just means that they will probably not be the best source for someone who isn’t 100% positive of what they are doing.

My Reasoning

There are three things that could happen if you hire a realtor with little to no investing experience.

  1. It could be really, really good
  2. It could be really, really bad
  3. It could be really, really blah
  • To make the experience the best you can, you need to make sure that you can effectively communicate your plans and needs to the realtor or title company or whoever you’re doing business with.
    • This means you need to know what you want to do with real estate investing. Are you trying to flip a house and put it on the market for a family to buy as their home? Are you trying to wholesale a deal? Do you want to flip the house for someone to rent? You need to know what you are doing and what your goals are before you talk to anyone else.  
    • For example, if you know you want to flip a house to sell to someone as their permanent residence, you will want to put it on the MLS. Statistically speaking, houses sell quicker when they are listed on there. You will want a realtor for a partner if that is one of your goals.
  • A realtor with no investing experience is not going to know how to find you the best deal for your money.
    • That’s not what you learn when you get a realtor license and the best they will be able to do is set you up with an automatic notification if something shows up on the MLS that meets any of your criteria as an investor. There won’t be any off-market deals, there won’t be any active marketing. It could take a while for something to show up because you and the realtor are not actively marketing that you are looking for deals. They can act as your realtor once something does show up on the MLS.
      • This may not sound like a bad deal if you are in a booming market and can cherry pick off the MLS. This might be all the set up you need.
  • Realtors have certain stipulations they have to meet.
    • If there is a realtor who has no experience in investing, they may not have a list of people to send properties to before they go live on the MLS. They might have a list though, would never hurt to ask. The other issue is that it might be illegal for them to even have a list. You need to know the legalities in your state for realtors. They may not be able to help you get any off-market deals.
  • A realtor with no investing experience shouldn’t partner up with a person asking them if they would work with an investor as a way to learn about investing. The realtor should not be relying on the investor as a source for all information on investing. Working with one investor does not count as experience if all you did was point them to the MLS and deals that were posted there.
    • If you do try to find an investor an off-market deal, make sure that someone is paying you a commission. If the seller isn’t you better make sure that you add the fee to the buyer so that you aren’t doing all this marketing work for free. Don’t accept the investor at their word that they will “contact you when the property has been flipped”. That isn’t guaranteed money.
  • Don’t use and abuse the realtors.
    • I did this, I won’t lie. I would ask them for deals and send them houses that were for sale by owner to see if the realtors would go out there and check out the properties. I burned them out for the 3% commission they would get on a 60k house. I have since apologized to those two realtors, but there are other investors out there using realtors like this. That’s not fair to realtors and it’s not getting the realtor any investing experience.

Therefore…

Working with a realtor is not inherently bad or good. I wouldn’t recommend for those who are just starting on their real estate investing journey to use a realtor with no real estate investing experience. And if you’re a real estate agent who wants to learn about real estate investing, don’t think an investor looking for a deal is the best place to learn. Make sure you don’t work for free!

Don’t Forget!

If you love the returns of real estate investing, but don’t want to deal with any people, you have the option to be the bank. You can be part of a trust or a fund. Right now, I have a fund set up for accredited investors with over $5 million in assets. The fund has preferred interest and 70% profit sharing. Visit me at investwithdrmatt.com to find out if you have the opportunity to invest with us.

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