I haven’t been blogging lately because I’ve been using all of my spare time learning about real estate. I’ve dipped into the waters before but I’ve always backed out after a couple weeks, jumping to the next shiny new thing. This time is different. The past two months have been dedicated to spending time exploring niches in real estate investing and entrepreneurship. I’ve spent time learning about strategies, selecting and learning about our target market, networking, setting goals, and taking massive action. The husband and I put in an offer on a fourplex last week. Our offer wasn’t selected (and that’s a good thing because it was priced at top dollar in a seller’s market). We’ve since revised our buying criteria to reflect our wealth-building goals, so buying below value is now a must for us. However, it was good for us to go the distance, throw our names in the hat, and know that we are ready to expand our portfolio NOW. We overcame our trepidation and took action, and learned a lot in the process.
Let’s get to today’s topic…
I’m learning new information daily about what to do and what not to do in real estate. One tip I’ve heard time and time again is to build a solid team before diving into making deals. I’ve also heard that the most important member of the team is your agent, and that this person should be an investor themselves or specialize in working with investors. I enjoyed the homebuying process we had with the agent we used when we purchased our home a few years ago so I decided to start with her. We met and reviewed our goals, she set up automatic emails to alert us when properties hit the market, and that was it. If I found a property that seemed promising she would get me the information I requested, sometimes. If she didn’t have access to the information right away there was no follow up. She didn’t offer any support or resources, we just came to her when it was time to make an offer or view the interior of a property. I wasn’t completely satisfied with this, especially when hearing investors talk about all the work their agents do to assist them, such as find off-market deals, connect them with other team members, help them develop a strategy, run numbers for ROI, and more. I felt like we were getting the short end of the stick. I thought that this would change when we made an offer because she would see that we were serious buyers, and that with the right amount of guidance, she’d make good money working with us. After our offer was rejected, nothing changed. It was more of the same lukewarm response to our requests. I’d had enough!
I reached out to a couple agents. One was an investor who was very knowledgeable about landlord laws. However, he was even less responsive than the agent we already had. Other agents didn’t stand out at all, just more of the same. I thought of what an ideal team would look like, and realized that an ideal team would consist of as many Black professionals as possible. I strongly believe in the power of group economics and if someone is going to make tens of thousands of dollars for each property we acquire, I’d prefer for that money to go to my community. I found a Black agent who worked nearby but not in our market, she ignored me after a couple texts. A few days later, I came across an agent who specializes in our target market. Her website was professional and she’s a Foundational Black American. I decided to set up a meeting.
This agent was so different from the others I’d previously encountered. She talked to me about finding off-market deals, planning for the market correction so that we don’t lose money when the tide turns, etc. She asked me about our goals, our ideal property, and our plans. She told me to slow down, and to be very intentional about selecting a property. Unlike all the other agents, she told me that properties new on the market were not the ones for us. We needed to be creative and get properties for a deal by going direct. She told me that an agent needs to work for the client consistently, working as a partner along the way by offering to crunch numbers, find information, and more. She told me that we needed to expect more from the agent we decide to work with and we need to ask them what they plan to do to help us and add value. I’d asked our previous agent to send a list of expired RMLS leads over a week ago, but she still hasn’t sent them.
After our initial meeting, the sista agent sent us a list of expired listings and a customized leads list for multifamilies in our target area from a title company. These lists are pure gold! I was sold! She reminds me of myself, she is an entrepreneur who is serious about her business. I could tell in our conversation that she was interviewing me as well to make sure we were the type of clients she’d want to work with. I also liked that about her, she wasn’t desperate, nor was she willing to work with anyone who walked into the door. She made sure that our goals and hers aligned. She also told us that she only works with 6 clients at a time so that she isn’t stretched too thin and is able to give each client the attention they deserve. Her actions definitely reflect this.
Although this agent does not check the boxes of being an experienced investor or specializing in investors (however she does work with a couple of investors), I think she is the right one for us at this point in time. Firstly, she takes us seriously as investors even though we haven’t acquired our second property yet. This is important because I don’t want someone who only believes in us after we have purchased multiple properties with them. I need to know our agent believes in us from day 1 so we can get this money expeditiously. Second, she follows through on what she says she will do, and in a timely fashion. Third, she is honest with us and instead of encouraging us to buy on-market, she advises us to be patient and strategic. Fourth, she checks in to see how we are progressing with our leads and plans. Fifth, I feel very comfortable talking to her.
Ask Yourself This One Question
During a Coach Carson podcast, he advised investors to choose members of their team with one question in mind: would I want to hang out with this person outside of work? Initially, I didn’t see this as important, but knowing what I know now, I see the value. Everything is moving so much more quickly now that we are working with someone that believes in us and our vision.
When we’re big time successful investors, I will advise beginners to shop around for a realtor/broker until you find someone you are comfortable with and confident in. People have rules, such as asking certain questions interview-style to figure out how knowledgeable a prospective agent is about tax strategies, calculating flip ROIs, etc. These things are great to have, but honestly, I want to calculate ROIs for myself, and I prefer to work with a tax professional to develop a tax plan. When we’ve built up our portfolio, we will eventually offload this onto our agent. I think it just comes down to what feels right. Moving forward, as we build our team, we’ll make sure to shop around until we find people who meet the following criteria:
- Easy to talk to
- Seems genuinely interested in working with us
- They know what the heck they’re doing
- Shows zest for learning about any area they aren’t an expert in if we need them to do so
- Shared affinity is a bonus, gotta close that wealth gap!
This is the first post of what I hope will be many on the topic of real estate investing. The best time to get into real estate was yesterday, the second best time is NOW.
What a time to be alive!
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