There is not a real estate agent in the profession who has not been given, or at least will be given, the opportunity to sell income property perhaps no less then once per year. Not bad, considering an income property transaction can easily generate a multi-million dollar sale and substantial commission!
How do I assume that premise? Because real estate investors walk-in, call in, may be a previous customer, relative, friend, neighbor, or sometimes are merely uncovered during aggressive cold calling made by an agent seeking a residential listing.
This is how I made my first rental property transaction, many others did, and the way I have witnessed countless agents offered the opportunity. It is not a matter of skill or luck (at least not in the beginning), the opportunity to sell income property is statistical. Real estate agents (due to the very nature of our profession) are destined to encounter someone looking to buy or sell income property, at some point, during any given year.
Okay, but why is it that some real estate agents cannot (or do not) sell income property? Worse still, why do so many agents blow the opportunity? It is certainly not a lack of intention; I have yet to meet anyone willing to ignore a four of five-figure payday.
Psychology aside (I am a real estate broker, not a shrink), based upon numerous conversations with agents who have confronted me for investment property advice, I am convinced that most real estate agents give away opportunities to sell rental income property because they are so inundated with the concept of selling houses they swallow the myth that residential and investment exist in separate worlds, and the twain shall never meet.
In other words, the idea of selling income property is foreign to most agents; therefore, they neither prepare nor seek it. As a result, when presented the opportunity, the real estate agent does not act, is slow to act, reacts shamelessly, or refers the business away to someone else.
In real estate, any opportunity to make a sale is pure gold; real estate success thrives on opportunity. It is unreasonable, therefore, to think that any real estate agent would squander it away.
What should real estate agents do? Foremost, dispel the myth that residential and investment properties are distant cousins. Each concerns real estate with a buyer and seller, and if you are qualified to sell a house, you can sell income property as well.
Moreover (if it puts you at ease), consider whom it is who buys income property; the very customers you are conditioned to service, homeowners. Real estate investors are not from a nearby planet, they are normal folks who buy houses and then turn to real estate investing to get the best yield on their investment dollars they can.
Secondly, dispel the myth that investment property is ground strictly reserved for investing experts. Some instances might require a commercial specialist, but real estate agents can typically handle many rental property transactions.
Thirdly, prepare yourself to respond to real estate investment questions. If asked about a property’s cap rate or APOD, you should understand the question and have an answer. The inability to discuss these issues effectively is where real estate agents commonly fail to win the investor over and subsequently blow the chance to foster future dialogue. Real estate agents do not make points with an investor when they lack even a basic understanding of rental property nuances.
Fourthly, prepare yourself to service a real estate investor correctly. Real estate investing is not about kitchens and fireplaces, it is all about the numbers; real estate investors purchase cash flow. Be ready to discuss a property’s income, operating expenses, and cash flow. Have the ability to present reports, whether you create them yourself or use real estate investment software.
The idea is to align with the investor; show that you care about their money enough to provide them with an adequate investment property analysis. When real estate investors perceive that you are concerned about their investment, not merely looking for a one-time commission, they willingly become loyal customers, and in many cases, repeat customers.
Finally, prepare yourself to work with rental income property now. If you wait until you confront the opportunity, it may be too late. Not unlike any of us, once a real estate investor decides to buy or sell, urgency becomes an issue, and real estate investors are prone to discount the services of any real estate agent who reacts like a deer gazing into the headlights of a car because they are not suitably prepared to work with income property.
