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We have had owners kick themselves for making mistakes when it comes to a purchasing price that seems too good to be true – and sometimes, it is. Usually, the owners who experience this phenomenon are those who are purchasing properties in lower-income neighborhoods. The thought process is, how can you lose? 

However, the fact is that when they bought that property at a certain price, it was not occupied. It was not in service. 

Often, there are code enforcement orders against the property or reasons why the gas can’t be turned on. In reality, there are many things owners aren’t able to identify or find out about until after they purchase the property. 

Suppose you intend to hire a property manager to put a property back into service. In that case, I think the whole idea of separating the group, person, company, or team that is going to manage your property from the person who is going to help you purchase it is dead wrong.

They are two different processes. However, if those two processes aren’t connected and don’t talk to each other, it spells trouble. 

The last thing I want to do is have to explain to an owner a year into managing their property that, while I was the one who sold it to them, I feel in retrospect they paid too much. I want to avoid having that conversation. Instead, I want to be able to say these kinds of things up front when we’re looking at the property. 

I value being able to look someone in the eye and tell them exactly what I think is going to happen and what they can count on based on my professional experience. I want them to know my thought process from day one through purchasing, and I want to be available for them to discuss questions we should ask, as well as keep track of the information we’ve already gathered. 

Ultimately, I want them to see me as a collaborator and a partner, so they can be assured they are making the right decisions – and I’ll stand behind what we do together. I don’t want to be hired as a third-party manager after the fact because I can’t win many times – and if I can’t win, the owner can’t win. 

It’s easy to avoid falling into the trap of discovering a property with a “too good to be true” price tag when you’ve got all the information in front of you and are actively working with a team that can acquire anything else you need to make your final decision. 

Why Hire A Property Manager?

There are a lot of advantages to buying (and selling) with your property management team, especially if they function the way we do.  

First, just like we helped you price that property when you bought it, we’re going to be able to help you price that property when you sell. 

Second, we work with roughly 400 owners in Ohio alone. As a result, we have owners who are looking to buy or sell properties within our portfolio. Therefore, we’ve got the leases and the cash flow statements. Plus, we know what’s going on and all the requisite documentation about those properties. 

It’s easier for prospective buyers to make an informed purchase because we have the data and are intimately involved in that purchase. 

I’m a buy-and-hold person: Once I buy something, I never want to sell it. But if you do, those two reasons are part of what adds value to our team. By working together, you get a bigger advantage – and a greater overall knowledge – of what’s available and possible. We value transparency, so you can walk into every deal with your eyes wide open. 

From a pricing standpoint, there are some tax questions to ask. There is a different set of resources that need to be consulted when you go to sell. From a practical standpoint, we respect licensing, realtors, and not crossing the Code of Ethics. We keep things on the up and up; we’re professionals. 

However, if you do decide to work with us, or let your property management team help inform your future buying and selling decisions, it’s important to stay the course. There is nothing more frustrating for us as managers when one of our owners lists a property with somebody outside of our office or outside of our team. Then, the issue – especially if it’s an occupied property – becomes about tenant relationships and our interactions from that perspective. 

It’s in your best interest to have a positive relationship with your tenants, even if you’re trying to sell. 

That’s another major advantage of having a property management team like ours; we work well with tenants. 

When working with an occupied property, we aspire to maintain a positive relationship with tenants and make sure they’re comfortable paying the rent and or able to enjoy their tenant’s rights and so forth. It’s always a can of worms when you’ve got a listing agent who doesn’t understand why the tenant won’t let them show the property at a moment’s notice and so forth. 

Again, from a practical standpoint, it’s very, very hard sometimes to get tenants to cooperate with showing a property. There’s a far better chance of getting tenants to cooperate if the people showing the property are the people those tenants have worked with for a while. They trust us to look after them and value their needs.

Final Thoughts

In short, if something seems “too good to be true,” it probably is – and you likely need to take a closer look. When you venture out alone to invest in real estate, it can be challenging to determine whether a property that seems like a good deal actually is one. That’s where a professional can help, giving you a huge advantage as you navigate the world of real estate together. 

We strive to use our expertise to boost our clients’ know-how and capabilities in the market; our job is to guide, advise, and ultimately lead them to make the best possible decisions. We want you to find a property that will pay off and suit your needs. Whether you intend to buy and hold or looking for something you could flip and sell to another investor (perhaps someone we already work with), our job is to keep your investing goals in mind and help you get to where you want to go. 

You don’t have to fall into the “too good to be true” trap – and we sincerely hope you don’t. I always tell people that real estate investments are among the best risks you can take and that there’s never been a better time to invest. If your goals are to expand your empire, please know that you’re heading in the right direction. 

Expansion is achievable; it’s entirely within your grasp. A few smart moves, the right partners by your side, and you’re there. 

Tayler Kohl ROOST Real Estate Co.

Today on the Connect Practice Track & Grow podcast Laci Leblanc and I spend some time with Tayler Kohl. Tayler is a new Realtor with ROOST Real Estate Co. and is working directly with Chris McAllister as the Director of Business Development.

Tayler’s role is to connect with anyone who has downloaded one of Chris’s books and find out if they are a 5-Star Prospect either as a future Realtor, property management client, buyer, or seller.

In other words her job is to CONNECT with future clients. (Hence the podcast!)

We discuss exactly what Tayler is going to be doing, her experience as a relatively new Realtor, and how the first couple of weeks of outreach are going. It’s interesting to hear perspective on both her first month at ROOST and her new role.

Listen now >>> https://www.connectpracticetrackgrow.com/017

When you’re talking about why we’re in this business, the parts of it we enjoy the most, and the areas where we want to be better than anyone else, it all boils down to passion. You have to love it because this industry isn’t the easiest one to be in, nor is it a “get rich quick” business. 

For all of us, whether we’re investors or real estate professional salespeople, there are ups and downs throughout a business cycle or even one’s entire career. Quite frankly, this year has been tough for everybody in the real estate business.

For salespeople, the very best among us across the country are down as much as 40% this year. Our owners are stressed this year, too; they are combating higher interest rates, inflation on what it costs to get things fixed, and so forth. During times when everything becomes a little bit difficult, you start to think, “Well, my gosh, this is getting tough.”

Is there an easier way to make a living? 

I think about that every once in a while. What I keep continuously coming back to is the fact that, if I wasn’t already in the real estate business, it’s still the only business I would aspire to get into – even today. Trust me: There’s never been a better time to invest in residential real estate. 

You may question this because times have been hard for a lot of people, but the only time that was better than today to invest in residential real estate was yesterday. Why? Residential real estate, regardless of the ups and downs, is always going to be in demand. I truly believe it’s going to be in demand for the next 25 years for a zillion different reasons. 

One of those is the fact that COVID is kind of in our rearview mirror these days.

We’re not constantly thinking about it, talking about it, debating vaccines, and so forth. However, the pandemic changed how people think about residential real estate and the way people think about where and how they live. 

Some statistics claim that over 30% of the people who started working from home during the pandemic are still working from home today. You can see that reality play out in how badly commercial real estate is doing. 

Right now, San Francisco is hovering around a 30% vacancy rate – and vacancies across the country are higher than ever. That’s a whole different problem with refinancing and managing commercial real estate. To be honest, I am so glad we are not in that. Conversely, I am thrilled that we are in residential real estate because, when you think about it, our homes became our schools.

Our homes became our entertainment centers, restaurants, work, and study areas. Because we’ve become adjusted to this lifestyle – and have found substantial benefits in it – this fact is never going to change. 

Now, this doesn’t mean we don’t want to leave home and go on vacation a couple of times a year; we’re willing to spend money on that. However, we are going to continue to spend money on making our homes more functional, comfortable, and enjoyable. 

For that reason alone, I think the next 25-plus years are going to be incredible. When you think about it, real estate is one of those few situations in which you can get a loan and have financed the term, meaning you can still purchase a loan for 10, 15, 20, 30 years, or whatever your terms state. You can get a fixed term, or – at the very least – one for a reasonable length of time. In that sense, you’re not constantly at the mercy of up and down interest rates.

For much of the financing, there’s still a ton of Fannie Mae, government-backed financing available for real estate investors as well. Those rates are ultimately subsidized by the government – and you can’t get those types of loans for any other sort of assets. 

Then, of course, there are the tax advantages with real estate investments. These advantages are tremendous. 

Here’s an example to illustrate why: Let’s say you’re a dentist for your professional career, and that job is your primary source of income. That doesn’t mean the profits you make on your real estate investment portfolio aren’t tax-sheltered within that portfolio. 

I’m not a tax accountant and I always oversimplify that, but the fact is that the benefits of investing in residential real estate are bigger and better than they’ve ever been before. Regardless of the ups and downs in the market, there has never been a better time to invest in real estate. If I wasn’t already in this business, I’d be doing everything I could to get into it. 

Choosing the Right Team is a Vital Part of Real Estate Investing

Investing in residential real estate presents a tremendous opportunity. It makes perfect sense for many people right now – but that doesn’t mean there aren’t inherent risks in investing in real estate or any kind of investment. 

This year, we’re working with a lot of owners who purchased properties either right before the pandemic or during it. These people, typically speaking, were able to buy homes with incredibly low interest rates. Granted, some of those interest rates were adjustable, so they’re struggling a little bit now. 

However, in every single case where we have somebody struggling or going through a tough time with their residential real estate portfolio, it’s because they didn’t have a trusted partner or advisor in their corner to counsel them when they initially purchased the property. 

I can’t tell you how many folks we’ve talked to this year who bought their properties sight unseen.

A lot of people live out of state. They see something on the internet and get all excited even if they live in California. Everything in Ohio is cheaper than where they were in California. So, how could they possibly lose? 

You have real estate agent licensees out there whose job is to sell real estate; their interest is in pocketing the commission and moving on. Therefore, you can’t necessarily count on the fact that any realtor you speak to is going to be able to accurately assess the condition of a property or communicate what it will truly cost to put it into service or maintain that property for the long term. 

I know that sounds like a cliché, but if you don’t go in with your eyes open and arm yourself with an absolute understanding of what your return on investment can – and should be – you could be in a lot of trouble. You also need to be aware of what it will cost to put a property back in service, which is part of your capital investment. If all these factors are a surprise to you and your property manager, who had nothing to do with purchasing that property with you, it’s a horrible thing. 

While all investments carry some level of risk, there’s an even greater one when you purchase a property without proper counsel or the knowledge of which questions to ask. You also can’t count on getting lucky with finding an agent who will have your best interests at heart, show you why you’re paying X for the property when Y is a better number, and so on. 

Now, there are numerous times when we have clients who “overpay” for a property because they’re counting on appreciation or have a specific reason for wanting a specific property in that neighborhood, et cetera. 

That’s fine. Whatever you do, make an informed, adult decision to go in with your eyes open. That said, if there’s one particular risk to avoid as a property investor, it’s purchasing something at the wrong price. 

That’s part of why we want to recast ourselves as Invest with ROOST rather than Manage with ROOST. 

Our jobs are almost impossible some days when we find ourselves suddenly taking on the responsibility of helping an owner manage a property profitably when, quite frankly, we have no chance – at least, not in the short term – of helping that owner make any money due to what the property needs and the additional capital investment, which is often required.

Final Thoughts

If you want to expand your real estate empire as an investor, you’ve got to have the right mindset, the right strategy, and the right people guiding you through the process. There is always risk involved with investments, sure, but you don’t have to take unnecessary ones.

I always tell people I’ve made every mistake in the book so they don’t have to – and that’s why I love working as a consultant, advisor, and property manager for my owner-investor clients. I know what pitfalls to avoid, where people break their budgets, and how to navigate the daily pain points that will inevitably surface. 

Ultimately, you don’t have to approach investing alone. If expansion is your goal, having the right team in place is your best chance at long-term success so you can grow and grow and grow to achieve your goals. Whatever those goals may be, our team at ROOST is ready to help. 

In today’s episode, Laci and I unravel the recent National Association of Realtors lawsuit causing industry buzz.

We tackle the complex issues, exploring implications for real estate and controversy around NAR’s Clear Cooperation policy.

We address uncertainty around high commission rates and the lawsuit’s possible effects. We also discuss media portrayals of buyer agents. Further, we shift to the debate between transaction and relationship mindsets.

We talk about transparency, licensing laws, and NAR’s role in protecting members. Join us as we shed light on this vibrant industry’s complexities.

https://www.connectpracticetrackgrow.com/016

By now, you understand that a successful investor buys at prices to yield a suitable return based on market-realistic rent. 

Betting on appreciation has its place, but not if it means negative cash flow. Florida’s Space Coast provides the perfect mix of cash flow and appreciation! (More on that later.)

Sourcing New Properties for Purchase

Buying foreclosures at auction is hit or miss, because you often cannot view the property before bidding, and foreclosing banks often bid the price up and buy it themselves, eventually listing it as an REO property (Real Estate Owned: housing stock banks have in their inventory). 

Estate auctions can sometimes be a good deal.

Buying ‘short sales’ often worked well in the years immediately following the crash. Most banks were willing to allow an owner to sell their property for less than was owed, as it was a cheaper process than foreclosing. Banks have less financial incentive to allow short sales today. However, short sales still pop up on www.Auction.com before the home goes to auction. These are rarely a great deal.

Properties listed by Realtors® in the Multiple Listing Service (MLS) are by far the best source of great deals. 

All the major government players list their distressed properties with local real estate firms. The investment firms that purchased pool sales will list those properties with local real estate firms as well.

HUD, Fannie Mae, and Freddie Mac all have an initial period where they will only accept offers from certified owner occupants or non-profits. It is a felony to attempt to buy a home as an owner-occupant if you are not an owner-occupant, and the penalties are severe, with fines up to $250,000 and/or a prison sentence of not more than two years. 

A real estate agent with REO experience will know what is required by each agency and can help you get to the closing table and avoid legal problems.

Finding the Best Deals First

A good listing agent will inform past clients about a new property when it hits the market. Zillow.com uses public records to list properties in foreclosure that are not yet for sale. Unfortunately, many of these properties will never actually be listed for sale.

The best REO knows what is on the market regardless of who has them listed for sale. They maintain relationships with other REO agents and can represent you when you are ready to purchase a property. 

Your agent can also program your property preferences into the MLS so that whenever a property meeting your purchase criteria is listed, you immediately get an e-mail. 

Working With Your Realtor®

It is vital to understand how real estate agents, Realtors®—especially those who specialize in REO—work together and make a living. The best Realtors® are true professionals and live by the Realtor® Code of Ethics. Every Realtor® is licensed in their state but not every agent is a Realtor®. Unaffiliated sales agents and brokers do not have access to the same training and support as a Realtor®. 

Real estate agents are independent contractors. They pay their expenses. And their only compensation is commission when a property closes.

When a Realtor® lists a property, their brokerage is contracted to market the property for a commission, which is then split into two, shared between the seller’s brokerage and the buyer’s brokerage. Listing with a Realtor® incentivizes every other Realtor in the community to sell the property.

Marketing REO properties is far more intensive than listing a home for a private owner. There are larger personal investments in time and money, many times maintenance and repair costs must be paid by the listing brokerage, and then reimbursed by the asset management company. REO listings require regular at minimum, weekly inspections, condition reports, and Monthly Marketing Reports (MMR).

While a listing agent typically works directly for a seller, often an REO listing agent works for an asset management company, working for an institutional investor, adding layers of complexity to the process.

The REO listing agent operates amidst multiple competing forces with conflicting agendas and goals, all looking to make a living or mitigate losses. Multiple participants can increase the time it takes the asset manager to respond to offers. And the while the listing agent may influence the timeline, they cannot control the seller’s response time.

How REO Agents Get Paid

REO commissions are structured so that all involved are financially encouraged to find a buyer. The listing agent typically pays a referral fee to the asset management company, but there is never a referral fee out of the sell-side commission. Therefore, the listing agent is highly motivated to sell a property to their clients. It is the same amount of work (or less), and having both sides of the deal helps the deal close quickly. 

Most importantly, when an agent has both sides of the transaction, they are better able to exceed the expectations of the asset management company and receive more listings in the future.

Final Thoughts

Working with an REO agent gives you access to a wealth of professional knowledge, which can make your good decision a great one. 

When you have a good relationship with a Realtor®, you can feel more comfortable that the decisions you’re making as an investor will pay off. Of course, there’s always some level of risk involved, but a true professional wants their clients to succeed – and your interests are our interests. 

Just like you’d trust a doctor for your healthcare or a lawyer with your legal needs, a Realtor® is your partner in navigating this industry. If you don’t already have a relationship with a licensed Realtor®, I would love to help you find one or work with you to ensure your investment goals are being addressed. 

After all, it’s not enough to buy a property; you want to make sure you’re buying the right one. That’s where we can help. 

Have you ever struggled to close a deal? Do you feel like the final stages are where you fall a bit short? I always urge people to bone up on their negotiation skills.

Realtors often play a central role in negotiations between buyers and sellers. 

A successful realtor possesses strong negotiation skills to advocate for clients’ interests while maintaining a respectful and collaborative approach.

If you’re unsure where to start, I think there are tons of wonderful books about negotiating and numerous continuing education classes about negotiating. 

At ROOST, all of our realtors go through Brian Buffini’s 100 Days to Greatness, which contains several modules about effective negotiations and things to look out for while going through the process. 

In my experience with this program,  I think that I learned something. I’ll confidently say I’ve learned something new in every negotiation I’ve ever been involved in, whether working with an owner in property management, working with an agent we would like to recruit, working with buyers or sellers, or negotiating with my grandkids. I always learn something from the process. I recommend treating all your negotiations like a learning experience; approach it open-mindedly. 

You must be open-minded to maintain your client’s interest. 

Again, as we’ve discussed concerning taking a client-centric approach, we have to ensure we’re negotiating on behalf of what our buyers and sellers want – not on behalf of what we think might be best for them.

Final Thoughts

Negotiation skills are a hallmark of a consummate professional. After all, a big part of what we do for clients involves getting them the best deals, whether we’re working with buyers, sellers, or both sides. When you can get the perfect property for a client at the best price, that’s a huge win, and that’s going to do wonders for your reputation. 

It’s not enough just to be personable and good with clients, you also have to be savvy about navigating every element of the business (working with other realtors, sellers, brokers, etc.). When you can skillfully and confidently approach a deal, you’re immediately going to benefit. Your clients will benefit from your knowledge and expertise, allowing them to be confident that they’ve made the best decision. 

And if they love their Realtor, well… they’ll probably talk about you to their family and friends. 

You just keep winning. 

You’ve found the perfect investment property–but do you know how to seal the deal? 

One of the biggest tips for buying investment properties involves knowing how the system works. Being aware of the motivations and constraints of all the players involved makes you and your agent powerful negotiating partners. 

Your offer must depend on what a property is worth to you, regardless of the listing price. Your target ROI and any required repairs will dictate how much you can pay and still be profitable.

If you’re considering buying an investment property that seems overpriced, keep an eye on it for 30 days. Price reductions often happen at 30 days. The longer it sits, the more likely the asset manager will be willing to negotiate. The smaller players who bought in pool sales are often receptive to any offer, even a lowball.

There are many moving pieces when you’re ready to buy a property – and it’s important to manage them correctly. As you navigate today’s real estate market as an owner-investor, here are some tips to keep in mind. 

3 Tips for Buying Investment Properties 

Even though the real estate market is volatile, I assure you: There has never been a better time to invest in residential real estate property. However, like any other investment, there are risks involved. 

To stay ahead of your competitors – and ideally dodge some of that risk – there are a few areas you can focus on to give yourself the best advantage. 

Before you purchase a new property, keep these three things top of mind. 

1. Ask the Right Questions

Sure, that listing may look like a fantastic deal – but you still have to ask the right questions. Many properties purchased “sight unseen” often come with a lot of hidden issues, so it’s vital to know exactly what you’re buying before you sign on the dotted line. 

Your listing agent will likely cover a lot of ground in this category, but as a buyer, you should also know what questions to ask. 

Here are a few questions to consider: 

This information can indicate whether the seller might be open to a lower offer, especially if it has been on the market for a while and/or is struggling to sell. If it has been on the market for a while, this also can clue you into whether it’s a good buy or not. 

Sometimes, a person’s motivations for selling can be eye-opening. For example, the choice to sell because they need to upsize to a bigger property to accommodate a bigger family is very different than selling because the neighborhood has taken an economic downturn, crime has increased in the area, etc.

If the property was last purchased a few years ago, it might not need any major updates or work, but if it has been decades since the last sale, you might need to budget more for maintenance and upkeep. 

You always have to consider the neighborhood when you buy a property. After all, you’ll need to find a tenant and keep your property occupied if you hope to turn a profit. 

Think about aspects like amenities (grocery stores, parks, entertainment centers, schools, etc.) and other factors, like walkability, that could make people want to live there. Another factor to consider is what would draw renters to the area. 

For instance, if there’s a new factory that just opened nearby, a big-box store being built that will open soon, or something similar, this could draw new workers (and potentially, new tenants) to the neighborhood. 

If the neighborhood is composed of young professionals who work remotely, you’ll probably want to buy something with an office space or something that could be converted – and you may be able to charge more for rent based on the salaries these types of professionals make. 

If you’re mostly tailoring to blue-collar workers or people who have factory jobs, work at Wal-Mart, etc, you may not need that office space – but you might not be able to charge as much. 

Either situation can still be profitable, but you need to be aware of how much you’ll ideally need to charge before you purchase anything and whether that’s possible based on the prospective tenants you’ll screen. 

2. Consider Location & The Property’s Overall Condition

Similar to how you need to consider the types of renters and potential draws that bring people to potentially rent in a neighborhood, you also have to look at the big picture. 

What is the overall outlook of the real estate market in the area where you’re considering purchasing a property? 

Are properties moving pretty quickly, or are they sitting on the market for months (or longer) at a time? Are more people in the area looking to rent or buy? Is there anything that indicates more people are moving to an area, or are people moving away? 

These are all things to consider when choosing a neighborhood or city to invest in. 

Likewise, you need to factor in the overall condition of the property before purchasing. Maintenance and rehab can be some of the biggest budget-killers for investors. A fixer-upper can seem like a bargain until you start crunching the numbers about what all those repairs are going to cost. Likewise, a well-maintained property that hasn’t been updated since the 1970s could need modern amenities to ensure it rents. 

Depending on your budget (and your location), a turnkey property could be too expensive, but you have to weigh the pros and cons of every facet before making your final decision. 

3. Educate Yourself (& Learn From Your Agent)

Your agent knows a lot about real estate – but that doesn’t mean you shouldn’t educate yourself. A well-informed investor-owner will be able to be more independent, and more of a collaborative team member with your agent. However, it’s always best to lean on them as a resource to help you grow your overall understanding, especially if you plan to buy multiple investment properties and expand your empire over time. 

You don’t need to be an expert, but you should have a cursory knowledge of the following to give yourself the best chance at success. 

Real estate agents seek continuing education to ensure our skills are honed to a razor-sharp edge so we can stay ahead of this ever-changing market. I encourage our owner-investors to do the same. 

How to Handle Multiple Offers For Real Estate Properties

While some properties are listed too high at first, others are listed too low, and attract a lot of action, resulting in multiple offers. 

This can be tricky to navigate. Most asset managers ask for the highest and best offer by a certain date. Others only negotiate with the best offer (or offers) and reject – or ignore – the others. 

Also, a listing agent typically cannot disclose multiple offers without the seller’s consent. Some agents prefer to disclose multiple offers, some sellers prefer not to, and all of this can be aggravating to a buyer who does not understand the legalities and complexities of these situations.

What is Considered a Lowball Offer in Real Estate?

Anything below 80% of the list price is a low-ball offer. Repeated low-ball offers can damage your reputation as a qualified buyer. Everyone involved is very busy, and it’s important not to damage what could be a very profitable relationship by wasting their time. So listen to your agent. 

If the listing agent hints that the seller is looking for offers, consider it an invitation to make whatever offer makes sense for your portfolio. If they say no today, they may come back later. Your offer helps both the listing agent and the asset manager.

Handling Earnest Money and Proof of Funds

Most REO asset managers prefer a cash sale because the process is quicker and cleaner, and additional time on the market can adversely affect an asset manager’s performance and compensation. 

Proof of funds in the name of the person or entity making the offer is required with the offer. Earnest money—10% of the purchase price or $1,000, whichever is greater—will be required by the seller. After the contract is ratified, a certified check for the earnest money is exchanged.

An experienced real estate professional is a vital resource for a real estate investor. They will help you navigate the complexities of an REO purchase and get you to the closing table. And they will help you expand your portfolio by identifying and evaluating potentially great investment opportunities.

Final Thoughts

Real estate investors have a lot of choices to make. Negotiations are a skill, and as a business person, you want to ensure you’re getting a great deal–but not at the expense of your reputation and relationships. 

Working with licensed, seasoned professionals is instrumental to your continued success and deepened understanding of the market, the industry, and beyond. The more you understand all elements of the business, the more likely you are to thrive as a real estate investor. 

That’s where we can come in to help you. If you do not have a relationship with a Realtor specializing in REO properties, please let me know. I would be honored to help you grow your portfolio. If you are outside the markets I work in, I would be happy to help you find a Realtor to partner with as you grow your portfolio. 

The number one complaint that we hear from owners, property management clients, buyers, and sellers is what they perceive to be a lack of clear and timely communication. 

I’ll be honest: Sometimes, we don’t want to communicate because we don’t have anything to say. 

We don’t want to have to call and give any of our clients the bad news that we haven’t had any activity on the property or any new leads in their house hunt. In cases where you’ve already had a discussion (more than once, at times) about lowering the price of a property, it may be tough to try again. 

We’re human so, depending on the situation, we may lean toward procrastinating. It’s not the best practice, but it happens. We sometimes avoid making a phone call even though we know we have to do it and understand why. 

A lot of times, this is where the lack of communication comes into play – and affects how our clients perceive our behavior. However, just like this is one of the top complaints, clear and effective communication is perhaps the most important skill for a professional realtor to have. 

When you’re at the top of your game, you’re committed to keeping your clients informed at every stage. 

It’s not always possible to be perfect, and even when you have good communication skills, you won’t be able to make everyone happy – but if you’ve spent too much time procrastinating of late or feel like you need to bolster your communication skills, I promise this will lead to a lot more happy clients – or at least fewer unhappy ones. 

Keeping our clients informed is just what we do; it’s part of the job. 

However, there’s a flip side of the coin. 

Here’s a tip about effective communication: We must be careful not to confuse our obligations to customers with our obligations to clients

The Difference Between Customers and Clients

I define customers as people who are calling in either from the website or maybe someone who picked up your business card somewhere and is reaching out with questions. Ultimately, customers are people you are not currently working with.

On the other hand, clients include the people you are currently working with – or past clients. In essence, people in your database, your current clients, and the people you’re working with are the ones who get your cell phone number –  and get your undivided attention. 

These people are with whom you actively communicate via text or you pick up the phone and call. If you are in a situation where you’re under the gun or you’re busy, it’s crucial to prioritize your clients’ interests over customer requests and customers’ interests.

Logically, we all know there are only so many hours in the day. We all have other obligations, but the most important thing you can do as a professional is make sure the people who already know and trust you and have committed to supporting you and your business are absolutely number one on your priority list. 

I hate to say it like this, but here’s the truth: New customers are secondary to taking care of the people who got you here. 

I’ve brought up this adage before, but it’s relevant. 

Make new friends, but keep the old. We’ve heard this phrase or song since grade school. When determining how to balance your time and structure your business, it’s crucial to recognize that you can’t be for everybody. It’s exhausting to try and, often, you will fall short somewhere if you stretch yourself too thin. 

At a minimum, be there for the people you’re working one-on-one with. Be there for your clients. You’ll make time to build new clients with those customer calls at a later date. 

Final Thoughts

When you work in a client-facing career, communication skills are key to ensuring your clients have all the information they need and can draw from your experience to make the most informed decisions possible. Real estate can be stressful – but we can’t lose sight of the bigger picture. As agents working by referral, our client relationships are what fortify the foundation of our business. When they win, we win. And when they win, they trust us with their connections – and maybe even get us a new referral. 

To set yourself apart from other realtors in this competitive industry, hone your communication skills to ensure all your clients feel comfortable, informed, and confident in the decisions they’re making. When they’re happy with their purchase or sale – and not stressed about the outcome – you’re more likely to have a smoother, lower-stress transaction. 

In addition to the cadre of independent contractors who do initial rehabs and between-tenant turns for our owners, we have a team of skilled people on our payroll. Being employees, they are covered by our general liability and worker’s compensation insurance policies. 

We will only allow our employees to work in tenant-occupied units as a liability mitigation measure. We cannot send people we do not know into tenant’s homes.

A talented team of both W-2 employees and independent contractors is the key to flexibility, safety, and profitability.

Our senior maintenance team members can do most HVAC, plumbing, and minor electrical work. They have decades of experience between them and have been with us for several years. The hourly cost of our employees is not insignificant. 

However, our owners have found over the years that having our people handle an HVAC emergency or a broken pipe situation in the dead of winter is far cheaper than hiring a third-party contractor to do the same work – even after hours.

Our tenant service standard is to complete routine requests within 72 hours and to stay in touch with the tenant throughout the process. There is nothing more frustrating for a tenant than having something broken in their home and not being able to get it fixed.  

Our property management software vendor, Appfolio, provides us with a 24-hour answering service for maintenance requests from our tenants. If a tenant has an emergency situation or a routine request, they contact the service through an app on their phone or call an 800 number and speak to a live person.

The system allows us to designate what is considered an emergency and who is to be contacted to do the work for each unit under management. If an owner is doing his or her own maintenance, the service will contact the owner directly. 

All maintenance requests are documented on our management portal and the Appfolio mobile tablet application. Our maintenance team members each carry an Android-based tablet with the Appfolio application installed. 

We’re professionals; we have a lot of tools at our disposal and want to share them with our clients to bring them greater ease of access and peace of mind. That’s what a good management team can do for you. 

Final Thoughts

As a property owner-investor, the decisions you make are ultimately yours. Whether you find success as a real estate investor often hinges on the ability to make not only smart investments but also smart decisions. For many people, having a property management team to do much of the work they don’t have time to do – or simply don’t want to do – is invaluable. 

We offer our clients a service, and it is a business, but we also make it our goal to care for your properties as if they were our own. 

If you’ve gone into this business, there are probably some areas you enjoy more than others. Wouldn’t you like the freedom to put your time, effort, and focus into those spaces instead of taxing yourself working on areas you dislike? Even hate? 

Your property management team can free you up to shift that focus where it feels right to you. Spend your time doing what you do best, and we’ll spend ours doing the same. 

A major element of professionalism for realtors is taking a client-centric approach. I think it’s key to your continued success in this business. 

This element is very near and dear to my heart: If you’ve read any of my other guides or listened to any of the Connect, Practice, Track, and Grow podcasts, we are all about relationships and being client-centered at ROOST. 

So, what does the client-centric approach mean? 

Professional realtors don’t just prioritize their client’s needs and interests above their own; they have a fiduciary duty to their clients and make an effort to understand. Of course, I believe most realtors work diligently to achieve these outcomes, so this may sound like boilerplate language to you. 

A lot of realtors, myself included, feel confident that we know what’s best for the client. 

We feel like we have all the answers because we’ve done this a million times, and we know everything is going to play out – or at least we think we do.

As a result, we may unconsciously project what we think is going to happen – or what we think should happen – onto our clients. Unfortunately, in some cases, our clients may get annoyed with this sort of behavior. After all, if you are working with a seller, you’re getting paid 6%. Because they are paying us for a service, we may be the experts, but we also have a responsibility to listen to them and ensure they feel like they are being heard. 

We don’t have to show our work at the first meeting, and we certainly don’t want to be in a position where we feel the need to be right or say “I told you so.” 

Instead, we must strive to understand their goals. From there, our job is to help them navigate the market appropriately. This is similar to when we have buyer meetings. When I talk to buyers, I assure them that we are going to give them access to every possible listing that will come on the market if it potentially meets their needs.

To not miss anything, we need to have a pretty broad search. The fact of the matter is that your home purchase is going to be more of a process of elimination versus a process of checking all the boxes and waiting for something to come up.

As realtors, taking the client-centric approach involves having the ability to acknowledge that your goal is to get them that beautiful eat-in kitchen, the massive fireplace, the great room, a fenced backyard, and so forth. 

Of course, we want to give our clients everything they could want, but the reality is we have to hear them. We have to ensure they know we’re providing every piece of information available, and we don’t ever want to make clients feel like we’re trying to steer them in a certain direction based on what we know to be available or hold them back. 

It may sound odd, but I believe we want to come across as almost paternal or maternal in our actions, guiding them without being overbearing and accepting their needs without attempting to get them to change their tune. 

The client-centric approach has a lot of different layers for a professional, but the key thing is that we hear them, we repeat what we’ve heard, and we make sure that we are on the same page instead of arbitrarily projecting what we think is right on our clients. 

It’s about empowering them to feel confident in asking for what they want and proving to them how we can deliver. 

Even if you come in with the best of intentions, sometimes the busy nature of this work kicks in and leads us to act in ways we typically wouldn’t – or know we shouldn’t. 

Realtors are busy for all the right reasons – and for all the wrong reasons. 

When working to build a stronger client-centric approach, here’s an example of situations to avoid. 

In situations when realtors feel under the gun, desperately need to make something happen to afford the next mortgage payment, have three listing appointments today when they’ve got a packed calendar of showing houses tomorrow, and don’t know how they’re going to get it all done, the pressure starts to settle in. 

When we’re under pressure, we’re more likely to try to cut to the chase, especially a new buyer or seller – or, sometimes, while negotiating a contract. 

We have to guard against this pressure. 

In my experience, trying to make the outcome go faster or fit the narrative we have in our heads based on our experience, we can give off the (often subtle, but not always) impression that we know what’s best, this is what you hired us for, and this is how we’re going to do it. 

Try to avoid taking the reins from your clients, even if you’re stressed, even if you’re busy, and even if you’d like to close that sale sooner. Make them feel heard, work with them on their terms, and you’re far more likely to work with them again or get a referral. If you put them off completely, you may never get a second chance. 

Final Thoughts

I think working by referral is the best way to stay booked and busy in this industry – but it has to center around our clients. By putting our clients and their needs first, we are better able to establish ourselves as consummate professionals and earn their trust. When you earn your client’s trust, you are more likely to work with them again and/or get a referral. 

A lot of people may gravitate toward this work for the wrong reasons. Quick money. Lots of money. Independence. But you can’t be successful in real estate if you aren’t excited about the prospect of working with people and helping them during a very important chapter of their lives. 

When your clients win, you win. 

When your clients trust you, you win. 

I don’t know about you, but I like winning. I like making my clients happy. I like knowing that, at the end of the day, I accomplished something that meets their needs instead of going with what I think they need. It’s not about me – and it’s not about you. It may be a hard pill to swallow because, as realtors, we are experts. We know the market, we know what to look for – but none of it matters if our client’s needs aren’t met. 

Put them at the center of everything you do, and watch your business grow.