In a previous post, I talked about the value of having investor-friendly real estate agents (Realtors) and how to qualify them. You’ll be asking them questions but be prepared for their questions too. Have these answers thought out and part of your script to guide the conversations to achieve your objective – build a winning team. Here are 8 questions they may ask you (be prepared):
Q1: What’s your experience as an investor?
A1: If you have experience sum it up quickly and demonstrate you mean business and opportunity for them. If you’re new, tell them so, but demonstrate you are well prepared and not just winging it.
Q2: What’s your end goal?
A2: Be clear on this. Tell them your WHY(s). Examples – retiring in 10 years with passive income, quit job near-term, buy and sell 4 – 5 properties this year, etc.
Q3: How will you finance your properties?
A3: This is where you need to demonstrate you can produce proof of funds from private money lenders, hard money lenders or joint venture partnerships. They’ll need to understand you are ready to pull the trigger, if the opportunity presents itself (and not just wasting their time).
Q4: What’s your investment strategy?
A4: Articulate your well-thought out strategy e.g., wholesaling, rehabbing, rentals, or some combination thereof.
Q5: What type of properties are you looking for?
A5: This is where your predetermined criteria comes into play. This should include the type of discounts that work for you and the type of house most retail consumers are looking to buy. Example 50% – 60% less then market value, bed/bath combos of 4/2, 3/2, 1,500 – 2,200 sq. ft., light to moderate fix up needed, etc.
Q6: How much to spend?
A6: In your business plan you have thought out the price points and ranges that work for you, your market and your available funds. Remember if you are rehabbing, you’ll need to keep in mind the repair costs in your budget.
Q7: What neighborhoods are you buying in?
A7: You’ve already targeted neighborhoods on the rise, recovering areas, areas in close proximity to you, or maybe in an area you haven’t thought of (but the numbers look attractive). Articulate those along with some guidance on where to look. Remember these should be neighborhoods you wouldn’t mind walking down the street in yourself. In other words – stay away from sketchy ones – your risk goes way up when taking on a project in a bad neighborhood. The price might be right but the risk to make a profit too great.
Q8: Who’s on your team?
A8: You don’t have to have specific names here. But do demonstrate you have a winning team which includes funding partners, one or more contractor(s), a title company(ies) you have used or vetted, and even other realtors to demonstrate you are working a real business, etc.
There are more questions that may come up, of course, but have answers to these to succeed (in building a winning team).