Fewer Clients More Money

Before we dive deep into why you should work with real estate investors, it is important for you to realize that not all real estate investors are the same. There are different types of real estate investors. Some are much better clients for us as real estate agents than others.

According to the National Association of REALTORS®, investment properties make up between 17% and 28% of all sales depending on which year of data you’re looking at. That means that about a fifth to as much as a quarter of all sales are to investors. If you’re not working with investors, you’re not working with a large part of the real estate market.

Most real estate investors are looking for a real estate agent that specializes in working with real estate investors. In book 2 and 3 of this trilogy on how to start and run real estate investor groups, we will go over how to create and provide on-going valuable resources to demonstrate your commitment to and specialization in working with real estate investors. This will help you capture a disproportionately large percent of real estate investor transactions.

Furthermore, as I will demonstrate when we discuss working with a special real estate investor type we call Nomads, I will show you that these real estate investors actually buy properties as owner occupants with the intention that later, after they’ve satisfied the owner occupancy requirement of the lender, they will convert the property they’re living in to a rental property. This means that a percentage of your business won’t even be investment properties, but owner occupant properties that will eventually become investment rental property.

In my personal brokerage business, which I will share details about later, approximately 80% of the 42 transactions we did last year were real estate investors from our real estate investing club. Since our real estate investor transactions sometimes include a few multi-family property transactions, it is probably closer to 90% when you calculate the percentage of our income that came from real estate investors from our real estate investing group.

For now, let’s go through the different types of real estate investors together and why you may want to work with each type.

Read more

There is a strong argument to be made that when discussing the types of real estate investors you’ll find at a real estate investor group meeting, that I should start with bird dogs and wholesalers, and move on to flippers and buy and hold investors. I’m not going to do that though. I am going to tell you about what I consider to be the absolute very best clients to work with: Nomads.

We made up the term Nomad™ to describe serial investors that buy houses regularly over time.

When we originally taught it, we would explain it as:

1. Buy a home as an owner occupant
2. Live there for a year
3. Then buy a new home
4. Convert the previous to a rental
5. Repeat the process until you reach your financial goals

Early on, we emphasized the moving into properties component as a key attribute to being a Nomad. We have since expanded the definition and added variations of the Nomad model to include ones where you don’t need to move in (which was probably the most common objection to the model), but you’re still buying a series of rental properties.

Read more

Real estate bird dogs are usually brand new real estate investors that are looking for a way to generate some extra income without investing any of their own money. While I wouldn’t seek out these types of clients to work with, it is important to understand what they are wanting to do, how you could work with them, and how they might ultimately become clients for you.

As I describe in more detail in the other books in this trilogy, when you start and run a real estate investor group, you should teach classes that attract your personally preferred types of clients. But, no matter how narrowly you create your class content, you’re going to attract a few of the other types of investors that are not necessarily your ideal client. That’s OK. Having a few of these other types of investor clients will help round out and optimize your brokerage business. The easiest example for me to make to explain this is: while I don’t necessarily recommend that you focus on finding tired properties that need fixing up and working with all fixer upper real estate investors, having one or two as a client will allow you to sell the fixer upper properties you happen to stumble upon while you’re working with other clients. You don’t want 50 fixer upper investors, but 3, in addition to a bunch of Nomads, will add a few extra transactions per year to your bottom line. The same logic applies to the other types of investors as well; you’ll probably want a lot of your primary client type, and a few of each of the others.

Now, back to bird dogs.

Read more

Flippers are real estate investors that are looking for opportunities to buy homes, fix them up, and resell them for a profit. While having a small number of flippers as clients will help round out your business, in my opinion, I don’t think you should focus on working with these types of real estate investors.

There are two primary flavors of flippers: those that have their own money and those that don’t have any of their own money. The flippers that have their own money may not have the full amount to purchase the properties but they have some resources to be able to do a much wider range of deals. The flippers that don’t have any money need to find deals they can buy where they can borrow all the money, including repair money, from a hard money lender (or a private lender). The flippers that do not have any money are much more challenging to work with. Let me explain with an example.

Most flippers need to find properties they can buy at a steep discount. They need to find properties they can buy where there is enough room to be able to buy it, finance it, fix it up, market it, and make a profit. While numbers can vary widely market-to-market, a common number thrown around is that they often need to buy properties at least 30% below the value of the property after they fix it up and go to sell it. To be completely clear, that does not mean they need to buy the property 30% below the current list price. It does often mean they need to buy the property below asking price, so if you’re in any way squeamish about making low ball offers, just politely opt out of working with flippers. You don’t need to work with flippers to be successful working with investors as a whole; I much prefer Nomads, and buy and hold investors.

Read more

Creative real estate investors are looking for creative financing deals. These deals involve buying properties using less common financing options like:

• Owner Financing
• Wrap Financing
• Loan Assumption
• Rent To Own, Lease To Own, Lease Option, and Lease Purchase
• Agreement For Deed, Bond For Deed, Contract For Deed, Installment Land Contract
• Subject To

Most creative real estate investors will be seeking these types of deals outside the MLS. While markets shift and change making some of these creative strategies appear inside the MLS from time-to-time, our current real estate market makes these types of transactions rare to non-existent inside the MLS. So, except for the same reasons I discussed with bird dogs and wholesalers, many real estate agents will opt not to focus on working with creative real estate investors.

Read more

Discover your opportunity for a better life in the real estate business…

• Stop worrying about where your next sale is coming from
• Stop cutting your commission
• Stop holding open houses
• Stop prospecting
• Stop wasting time with pretend buyers
• Lock in consistent, predictable streams of commission checks
• Start serving clients at a higher level
• Take back control over your clients, your time, and enjoy life
• Be the envy of every other real estate agent in your market

Dear Fellow Real Estate Professional,

Below, I’ll show you exactly how you can have the same system that I built—after investing thousands of dollars and thousands of hours in trial and error—set up and put to work for you, done for you, to dramatically change your immediate commission income and future banked commission income (and the way that you make it) for the better.

My name is James Orr. I am a 41-year-old REALTOR® in Northern Colorado. I have two college age sons, a wife and a dog that I love to spend time with (photo to the right). As a real estate broker, I own a three-and-a-quarter person real estate brokerage called James Orr Real Estate Services LLC. It is not what anyone would ever consider a traditional real estate office. My company is just me and my wife plus two assistants—one full time and one that does a handful of hours a week. However, you don’t need a spouse working with you or assistants to do what I do.

When I first got into real estate, I experienced the traditional feast and famine cycles that many sales professionals suffer through. I studied and tried just about every real estate book, course, and seminar out there searching for a solution. Maybe you’ve studied some of the same material by Tom Hopkins, Brian Tracy, Craig Proctor, Brian Buffini, Ninja Selling, Chet Holmes, Jay Abraham, Dan Kennedy, Mike Ferry, Tony Robbins, and many more. Sure, each one taught me something, but it wasn’t until mid-2015 that I discovered the strategy that helped my sales almost double (commission checks as proof below).

Now, I have traded in chasing down clients like a madman herding cats and the self-inflicted torture of prospecting, to serving clients at such a high level that they seek me out in order to work with me. I spend most of my time on my passion of creating tools, writing, and teaching classes. I probably spend 2 or 3 days a week actually brokering properties for clients. While I still show houses, it is almost exclusively to serious buyers that either have bought, or are planning to buy, multiple homes from me. I rarely list homes, except for clients I’m especially fond of and usually only after they’ve convinced me they shouldn’t keep the property as a rental. My clients are almost exclusively actively working on acquiring multi-million dollar real estate portfolios and I now consider many of them my best friends—how bad is it to help 50 or more friends become multi-millionaires with tons of free time to travel and enjoy life as clients? I don’t have to answer every call at inconvenient times or instantly return voicemails for fear a client will call another real estate agent they know.

Read more