You probably already know that generating consistent business is extremely difficult. It can take months of prospecting to find customers. It takes even longer to build the kind of reputation that encourages customers to sign up with you. And when you juggle prospecting keep that pipeline full and build a reputation worthy of the buzz, if one bullet falls it can kill the whole act.
That’s why the best producers usually stick to their position – they’ve already done the fieldwork and put in the hours to be on top. It’s also why so many new agents struggle to be successful.
Unfortunately, no secret gives you a shortcut to avoiding all the hard work.
There is, however, one source of business that you can tap into that is more stable than individual buyers or sellers. And it’s a topic that many agents tend to avoid because they don’t understand it: tap into real estate investors.
If you’re ready to step out of your comfort zone and learn how to work with these high volume buyers and sellers, you can tap into a more cohesive business flow that:
- Produce the sustainable cash flow you need to thrive through the gaps in market cycles.
- Provide a solid source of business for new agents who are just starting out and do not yet have a solid volume of business.
The key to entering this niche is to understand the mindset of the four avatars of real estate investors.
4 avatars of investors to know
While everyone is different, real estate investors usually fit perfectly into one of the four avatars. Understanding how they think will help you attract them as a customer and serve them well.
We have all met the newbie real estate investor. They binged every episode of Flip this house and can tell you all about Chip and Joanna Gaines. They are super excited, but generally they are not very well informed which can create challenges.
To get started, they’ll need a lot of hands, even more than a typical homebuyer. This is because their enthusiasm will often hide their fear, which can block or even kill a deal with smokescreen objections. On top of that, you may need to educate them against bad decisions.
And you will have to prequalify their finances. Many have misconceptions about financing rental properties, so making sure they can close is essential.
While the newbie can be a lot of work, they can also become a lifelong customer if handled properly. Remember that every successful investor was once a beginner.
This avatar can be difficult. The handyman may already have one or more rental properties in his portfolio, but has no track record of success. They have embarked on real estate but have not yet withstood the vagaries of the market.
The problem is, they tend to treat services like goods, including your services as an agent. As a result, they will often try to negotiate your commission down.
But it doesn’t stop there – they’ll likely also negotiate with other service providers they connect with through you.
Some degree of negotiation is acceptable. We all do.
But you will have to determine how far they will push it so as not to risk damaging them. your relationships. If you feel that they are devaluing and belittling others, it’s best to pass that perspective on, no matter how much money you might need.
It should also be noted that the DIY enthusiast can be difficult to please and may not have the financial capacity to survive a market downturn. If that happens, they’ll likely blame you.
The player has money to spend, is impatient, and believes he can create wealth in any market.
They are often motivated by success in other areas of their life. Maybe they’ve built a thriving business or been lucky in crypto, and they believe that’s a sign of their financial genius.
It is a classic case of Dunning-Kruger effect. If you are unfamiliar with this term, I highly recommend that you research it as it will come in handy in screening prospects and assessing your own abilities.
This avatar has the financial means to close a property, but might tire you out looking at a wide variety of listings before investing. And they’ll probably waste a lot of your time trying to convince you how smart they are in the process.
If you meet the plays, you have to sort them very carefully.
Although they are rarer, the professional is the avatar you want to set your sights on.
They come to the table with capital, experience and focus. But because of this, you have to bring your “A” game to deliver value, which means you have to understand both real estate and real estate investing.
You have to be able to identify the properties that best meet their investment objectives and not waste their time with those that do not. Remember that your job is not just to show them properties. Your job is to help them find the right properties.
They treat it like a business because for them it is. So if you want to gain trust, you have to treat it as such.
With this avatar, you’ll have to do more work to prove your worth initially, but you’ll spend a lot less time holding their hands, educating them, or helping them fund themselves. These investors also tend to make decisions quickly.
Put it into practice
In a high end you will often find many more “investors”, but many will be newbies, Handymen and gamblers. Money seeks return on investment, and real estate is highly sought after when it is rising.
When the market corrects, many of these avatars will exit the investment market, and only the professionals will stay.
But it is a double-edged sword. This gives you a better customer perspective, but it also forces you to deliver more value from the start.
It is also essential to trust your instincts and use good judgment. You should be prepared to say “no” if a potential investor client does not meet your criteria. Trying to be everything to everyone is a recipe for failure, and it will make you miserable.
The key is to identify the type of real estate investor you want to serve and then serve them better than any other real estate agent in your market.
It’s that simple.