Selling Real Estate is a Way to Make a Great Living, but Owning Real Estate is the Way to Create Wealth.
Did you get into real estate to have freedom to make as much money as you want?
Well, it can happen by selling lots and lots of houses, but that can get exhausting. A straighter path to financial freedom is to use your realtor knowledge to get started in real estate investing.
Create passive income through rental income.
The Cobbler’s Kids Go Barefoot
Do you help your investor clients build wealth yet have tumbleweeds blowing through your bank account?
It is well known that owning real estate is one of the surest ways to wealth, yet so many agents go through their entire career churning deals with no exit strategy, yet they work tirelessly to build up real estate portfolios for their clients.
As an agent you are in the perfect position to not only work with investors, but to become an investor and create financial freedom through passive income.
Even if you know nothing about investing or have no idea how to get investors as clients, you should learn and start.
You see wealth and that it belongs to those who own real estate. Use your realtor knowledge to get started in real estate investing and become one of them.
You Need Knowledge and Tools and as a Real Estate Agent, you Hold the Keys to Both in Your Pocket.
- You are out on the street and see the trends and movements of the market. You develop an intuitive knowledge of where the best places are to invest and you will develop a sixth sense for opportunities and see them first. You are familiar with local laws and customs and how they impact real estate transactions.
- Money- every phone call with a lender and appraisal you’ve reviewed have built up your knowledge about how mortgage financing works. You probably counsel your clients on how to get approved for a loan, so now it is your turn. You already know how to do it!
- Being a landlord. Even if you don’t own your own rental property yet, you have helped countless investors rent their property and answered a billion questions about landlord tenant law. For free. It’s time to get paid, my friend.
- Your wingmen: You have access to lenders and know the lending guidelines and how to fit them. You have access to money and now the terms and ways to finance creatively. Look in your phone and you probably have title companies, attorneys and architects. All the members of you A team are literally at your fingertips.
- MLS-You have the access to MLS and the vast amounts of data that put you ahead of civilians.
- Forms and contracts. You can buy a house from your couch. At midnight. With a glass of wine in your hand. For real- think about the tools you have literally at your fingertips. You can make sh*t happen from your laptop anywhere with an internet connection. It’s like printing money.
Become an Investor.
The first step to becoming an investor is mindset. Tell yourself, in no uncertain terms, that you will own a property. Be specific about the type and timeline.
Write it down every morning and night until your subconscious shifts and you believe it to be true.
In the Meantime, Get Ready by Working with Investors.
Get your head in the game and gain experience by working with investors. I will break it down for you here, so don’t stress if you don’t even know how to begin.
Start with a question
Ask the investor what their objective is. The answer will generally fall into one of three categories.
- Cash flow
- Cash Infusion
- A good deal
When an investor is looking for cash flow,this means they are looking to buy property and rent it out. The rents should cover the carrying costs, and the extra each month is the cash flow.
In order to get a cash infusion, a person has to buy low and sell high. This typically happens in one of the following ways:
- Buy from a distressed seller at a price below fair market value
- Buy and hold for a length of time until the value goes up (apprecdiation)
- Buy and add value through improvements.
A Good Deal
This is indicative of either the buyer either not knowing what they want or just not being specific enough. Either way, when a client gives you this answer, you need to ask questions to flesh out what their objective is.
Now that you know what to say to potential investors, let’s discuss how to get them.
How to get investor Clients: Shop the Deal
Find the Deal
Go out and find a deal. Either cash flow, rent and hold, or a rehab for cash infusion.
You can start on MLS if you don’t have any of your own listings. Take photos, write a description, and then prepare the deal.
For rent and hold, calculate the CAP rate based on the asking price or a price that you think that it is worth less than asking.
For a renovate and sell, prepare an offer showing the price, projected construction budget and the ARV.
Promote the Deal
You can go live on Facebook or Instagram from the property or record a video and then the CTA to capture their email address in exchange for the offer sheet.
The more you do this, the larger your email list will grow. Then as you find deals, you can not only promote them on social media, but also email them out to your list.
Having followers on social media is not the end goal. Even though so many people spend their time on social platforms, you do not control who sees your posts. They are subject to the whims of algorithms that can change at any time.
When you capture their email address, you control the communication. Although you cannot force people to open your email, you can control when you send to them as well as keep track of their open rates and clicks. Even if people do not open your email, they will still see your name in their inbox which will keep you top of mind.
Close Deals: Make Bank
Your business will grow quickly and exponentially. You wil attract both buyer and seller leads and start closing deals.
This new and lucrative side hustle is what you will use to fund your first investment property. The key is to add this income stream to your business so your income increases.
Be sure to set this money aside and earmark it for the downpayment on your real estate empire. Open a separate account in a bank across town and do not get a debit card. Stash that money away and get addicted and obsessed with hitting your goal so you can get those keys in your hand.
Waterfall of Wealth
As you create a robust investor business, you will be getting first hand knowledge of investment strategies and the market, expanding your database of clients to feed your business, and generating income to grow your real estate empire.
You are creating a continuous flow in your business.
Like a waterfall of wealth.
Instead of churning deals, you will be taking steps up the career ladder and on your way to financial freedom.
Each property you buy will create passive income and secure your future. Can you imagine one day not having to work?
The time is going to pass whether you do it or not, so get started.
If you are motivated and want to get started, but need a little more help, email email@example.com to be invited to my next agent training on the basics of real estate investing.