Finding the Right Real Estate Agent for Investing

Building Your Real Estate Investing Team

“Where no counsel is, the people fall; but in the multitude of counselors there is safety.”
                        -- Proverbs, 11:14

“The important thing to recognize is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none.”
                       -- Philip Caldwell

The most successful people always have a great team helping them.  You’ll need to find a Mortgage Broker, Real Estate Agent, Inspector, Appraiser, Insurance Broker, Contractor and CPA.  You may also need the support of an Attorney and a Property Manager.  Today my focus is on finding the right real estate agent.

To begin, the two most important members of your team will be your mortgage broker and your real estate agent.  Outstanding residential mortgage brokers and real estate agents rarely achieve even modest success with investors.  Insist on full-time professionals that specialize in working with investors so you can maximize your track record of success.

Interview and Check References when searching for a real estate agent

Bear in mind that the perfect agent with A+ answers on every question likely does not exist, and if they do, they will be so busy that they might not have time for more clients. Be willing to compromise. It’s rare that you can find the 100% perfect agent.  The search and thought process for investments should be highly numbers-driven - residential agents are mainly focused on the emotional appeal of a home and how well it fits their client's lifestyle.

Here are some sample questions:
  - Are you a Full Time Real Estate Agent or do you do other things? If so, what else do you do?
  - How many transactions did you complete in the last twelve months?
  - Tell me about the mix of clients – what types of clients did you work with and what sorts of deals did you do?
  - Do you work on a team? If you are sick or on vacation, who will be helping me?
  - What happens if I’m not satisfied? Can I get out of the contract? How long is the contract?
  - Describe the investment you are considering. What properties do you suggest I consider? What have you seen other investors like me do? What specific returns did they achieve?
  - How would we work together? What is your “Process”?
  - Could I get some references of two or three investors you have recently assisted?
Call them up and ask them …
     • How comfortable they were working with the agent?
     • How knowledgeable did seem?
     • How responsive they were in answering questions and returning phone calls?
     • What did not work for you in the relationship?

I encourage you to interview a few real estate agents before making a final decision to sign a buyer’s agency contract.  Make sure you have a clause to cancel if you are not satisfied.  Commit to working with one agent after your due diligence period so they will bring you the best deals.  Non-committal buyers only see left-over deals after preferred clients have picked over them.

If you are thinking about investing in real estate I recommend “The 2011 Guide To Colorado Real Estate Investing” by Lon Welsh. For your FREE copy give me a call (303-726-1051).

Easy Money

My father died 2 weeks ago & his memorial service was this past weekend. When the pomp & circumstance was complete, my siblings and I spent a few hours pouring over photographs & other memorabilia, telling old stories and for the most part laughing about the adventures and mishaps of our youth.

During our dance down memory lane I uncovered a frame that held 5 stock-transaction receipts near the top of the frame, a short poem in the center and the calculations of what could have been at the bottom. The stock receipts showed the sale of 2000 shares of Pizza Hut stock over a period of 1 year - 1975, my sophomore year of high school. Sale of 300 shares, sale of 500 shares, and so on. The last 700 shares were sold on 6/26/75 and settled on 7/3/75.

The poem goes like this:

There once was a young man named Dick
Who sold his Pepsico stock too quick
Making money had been easy
His attitude was breezy
He thought he was really slick

From this sale a lesson was learned
Easy money should never be spurned
Dick bellowed and blew
But from then on he knew
Keep good stock and you'll never be burned

And at the bottom were the split dates:
07/21/75 - 3 for 2 = 3,000 shares
11/07/77 - 1.55 for 1 = 4,650 shares
05/07/86 - 3 for 1 = 13,950 shares
08/10/90 - 3 for 1 = 41,850 shares

Dad figured those original 2000 shares would be worth about $5M today had he held onto them. What did he get in return? New siding on the house, a groovy little sports car and a 10-day family vacation to Los Angels.

My father left me many things, among them; a commitment to honesty, a thousand great memories, 4 fantastic siblings, a small gold pinkie ring with the classic 70's smiley face (the symbol of his life's guiding principle, "Think Happy Thoughts"), a very small amount of money, and this 8.5"x11" frame with a powerful reminder of what's possible when we use our cash to buy assets and then leave the assets to work their magic.

The New Wealth

Last night I watched a Tony Robbins’ interview with Eben Pagan, Internet marketing wiz kid. I say "kid" because he's only 38 and yet he's generated millions from internet marketing of his products. His products? He started with a "how to" on dating and is now into business development, how to hire the best employees, mastermind materials and all manner of improvement e-books. The product isn't what caught my attention. What snagged me came at the end of the interview and upon hearing it all that came before slammed into place.

Eben operates from a true abundance mentality. He talks about the 80/20 rule. Traditionally this concept addresses the notion that 80% of one's income comes from 20% of one's activities. Pagan's use is radically different. Having coined the concept of “moving the free-line”, Pagan promotes the idea that by giving away for free the value that I have to offer, I still retain that value and now another person has what I gave them AND I receive more in return. For instance: I have a lit candle, which I use to light your candle. My candle is still lit and now yours is lit AND there is MORE light because 2 candles are burning. Make sense?

So how does this translate into generating Wealth? The trick is to break out of the “scarcity mindset” (there’s a finite amount of money in the world and I’m going to get my share) and re-focusing attention on creating and then providing value. Once you are providing genuine value the money will follow. How do we know what’s of value? Look for a “yes” answer to the following 3 questions:
1) Does what I’m offering alleviate a pain my target client is experiencing?
2) Is my target client actively looking to alleviate that pain?
3) Does my target client have few or zero perceived options for alleviating that pain?
If you get 3 “yes” answers then you have a product that will sell itself.


How do I come up with a product/service that provides real value? Pagan’s answer: “Seek first to understand”. Talk to your client/people in your target market and find out where their pain points are. Dive deep in the conversation with an authentic intention to discover what their needs are. Once you know what they are in search of and cannot find then you insight into what you can create/offer as a product/service.

So what is “The New Wealth” and how is it created? New wealth is money made from a product or service that provides real value and the money is generated by the principal of – when I give it away I still have it and now you have it and I’ve gained from the act of giving. The key: SEEK FIRST TO UNDERSTAND!