Do you really NEED a filthy real estate agent?
Especially for investors- agents can be a valuable partner
It’s March and we are seeing more and more sunny, tolerable days here in southern Idaho, which is about the best we can hope for until Mid June! As many of you know, once the sun starts making regular appearances, people start thinking of barbecues and bike rides and along with that comes dreams of a new home- a new patio or deck, a place that’s close to that park you like or in that neighborhood with the really great bakery. Renters and buyers come out of the woodwork and things start getting really busy for property managers and real estate agents.
If you are reading this, there’s a good chance that you are either interested in investing or have been investing in real estate. There’s an ongoing debate- what role does a real estate agent play in a transaction, especially for a buyer with some experience. Well, ironically, the more experienced people we work with don’t even consider buying without an agent, it’s mostly the novice investors who think about the fact that they could put that commission in their own pocket or reduce their debt and get closer to a cash flow number that works well for them.
Understandable, absolutely, but buying a property and writing a contract that a seller will sign, but still creates leverage and protections for the buyer is more of an art than a science. True, anyone can just fill in the blanks on a contract, but how you fill in those blanks based on the information you can extract from a seller makes all of the difference in the world.
Here are a few examples of ways that our team has worked magic for our clients the recent past:
Superstar agent
Joey Banasihan had a contract last year for an investment property with a brand new client to us, who also happened to be a novice investor. The offer he wrote worked great for our buyer, but just as important, he developed a relationship with the seller and knew what they wanted to see in a contract too- so he was able to appeal to their needs while still protecting and building leverage for our client. During the transaction, he was able to use the hidden leverage he built in to the contract to get an additional $50K off of the purchase price for our client. That was nearly 10% of the purchase price overall, creating better cash flow, a lower down payment and a solidly performing asset for our client.
Tracy Ross, Boise Turnkey’s secret weapon, was able to perform a similar feat just recently. She’s working with a client who plans to house hack a short term rental. Basically live there for a while, fix the place up and leave it in a year or so as an AirBnb that will give them additional tax benefits and killer cash flow. The property is also on a lot that can either be split or allow the main home to be permitted as a duplex, so there are other options for these clients to force equity and better cash flow in the future. The offer she wrote had built in protections for these clients as well- she used her smarts and stellar negotiation skills to get them a $10K closing credit AND a $25K discount after the seller had accepted their original offer. That’s another $35K in our client’s pockets that they likely would have lost had they not hired a knowledgeable pro to guide them.
There’s one other misconception; real estate agents only do deals that are on the MLS. I guarantee you- our team sees every off market deal in SW Idaho, and we bring plenty of those deals to our clients. Our job is to help investors reach their goals and we do that in any way we can. As investors and agents ourselves, we are well networked with other agents and investors and those relationships bring us off market deals regularly. The ironic thing is that there are almost always better deals on the MLS if you know what you are looking for, but if an off market deal that we find works for you, we are going to help you get it closed.
Does every deal go like that? Unfortunately, no, but over time and hundreds of transactions, we’ve developed processes and tactics that help our clients get more offers accepted, many times beating out higher offers and cash offers, and still having leverage and protections built in that many sellers and listing agents don’t see or anticipate. We are an open book and love talking real estate and strategy. So- if you want to know our secrets, we are happy to share,
just reach out and book a call or meeting with us and we’ll spill the beans and give you all of the tools you need to make your own magic happen.
Happy Investing!
