Investing 101 Lesson 5
Lesson 4 covered Managing Your Investments.
WORKING WITH A REAL ESTATE AGENT
Many of the real estate investing courses and books offer advice on how to “Do it Yourself” or “Don’t Pay a Commission.” These courses and books are doing a disservice to the investor. A good agent that is familiar with investing in income-producing properties can be an investor’s greatest asset.
Many of the problems investors have with real estate agents arise from choosing the wrong agent. The majority of real estate agents specialize in residential single family, owner-occupied properties. Obviously this is the largest market, so it makes sense that this is where the majority of agents specialize. The investor must find an agent who specializes in income-producing properties — the Investment Specialist.
The Investment Specialist knows the market, is familiar with commercial transactions, understands commercial financing, and, most importantly, understands that the investor is in business to make a profit.
The Investment Specialist can recommend sources for financing, inspections, 1031 exchange intermediaries, title companies, management companies, or other resources that may become necessary.
A good Investment Specialist is worth much more to you than the 7% or so that you will pay in commissions when you sell. Remember, however, that as long as you are buying, your agent represents you at the seller’s expense. It often doesn’t cost the buyer anything to be represented by a top-notch Investment Specialist.
The Investment Specialist will ask probing questions to find out your needs and goals in order to help you. You will be asked about your income, how much cash you have available to invest, and what your monthly expenses are. The agent that is truly an Investment Specialist will also need to know what kind of cash flow works for you and if you have the desire to repair a property.
Will you manage the property yourself, or will you hire a professional property manager? Is there any area where you wouldn’t want to own property? What are your main concerns about investing? What are your goals? The Investment Specialist will ask all these questions and more. Don’t be concerned that you are giving away too much information — your agent is there to work for you, and the more information the agent has, the better he can serve you. If for any reason you don’t feel right about sharing this information with your agent, look for a different agent. Find the Investment Specialist that you trust.
So just keep in mind that if you are buying a home you intend to live in as your primary residence for a long time, find a real estate agent that specializes in residential single family, owner-occupied real estate. But, when you invest in income-producing properties, you need an Investment Specialist to protect your best interest.
Franklin Commercial Group has a track record with proven results in commercial property transactions. We are Investment Specialists committed to the best interests of our clients.
