As a real estate agent, working with investor clients can be very lucrative. Unlike traditional homeowners, who on average live in one house for 13.2 years, investors are constantly selling and purchasing property in order to grow their portfolio. Aside from increased commissions, there are additional benefits to working with clients who purchase investment properties, such as their ability to work quickly and without emotion. Investors are simply seeking out the highest return on investment rather than their dream home. Plus, real estate investors typically are connected with other investors, increasing your chances of referrals.
So it’s clear that working with real estate investors offers many advantages. But how do you find real estate investors and how do you successfully work with them? Keep reading to discover how to find real estate investors, strategies for successfully adding them to your clientbook, and how to retain investor clients.
Types of Real Estate Investors
To work with real estate investors, it’s important to first brush up on your knowledge of the different types of real estate investors. Different investor types can provide unique benefits for your business. In 2024, there are a lot of different real estate strategies an investor can leverage for cash flow:
- Buy and Hold: Buy and hold investors purchase property with the end goal of profiting off of property appreciation. During the hold process, investors will rent the property out to a tenant to generate monthly income. These investors are far more concerned with playing the long game than they are in short-term gains.
- Why work with them? Buy and hold investors are looking for a property that has strong potential for appreciation. If they’re well-researched, they’ll know what they want and don’t want from an investment property, creating a speedy buying process. If they aren’t well-researched, you have the chance to show off your market knowledge and secure them as a loyal client.
- Fix and Flip: Flippers purchase “fixer upper” properties that are listed under market value with the goal to renovate and quickly turn them around for profit. Because flippers tend not to hold onto a property for long periods of time, they open up opportunities for realtors to work with them more frequently.
- Why work with them? Unlike buy and hold investors, flippers want to turn their profit around quickly. Once flippers are finished with their renovations, you can contract the newly renovated property and hopefully find them their next project.
- Wholesaling: Wholesalers enter a contract to buy a property then sell that contract to another buyer, never personally taking ownership of the property. Wholesalers are savvy negotiators.
- Why work with them? Wholesalers are unique because they don’t have to involve supporting services like lenders to complete their investment. Working with a wholesaler can be quick and easy for realtors.
- BRRRR (Buy, Rehab, Rent, Refinance, Repeat): Coined by investor Brandon Turner, the BRRRR method involves buying fixer uppers, renovating them, renting them out to tenants, refinancing them, and then using the refinanced funds to do it all over again.
- Why work with them? The ultimate goal of this investment strategy is to continue buying properties, meaning more commissions for you.
- House Hacking: House hackers buy a multi-unit property, live in one unit, and rent out the other unit(s) to cover their mortgage. House hacking is a gateway for many investors to get started in real estate.
- Why work with them? Because house hacking is popular among new investors, this is a great opportunity for you and the client to grow your business together and form a long-term partnership.
- Turnkey Investment: Turnkey investors purchase fully renovated properties managed by a property manager for a more hands-off, passive income approach. Because turnkey investors opt for a property manager, they won’t have as many questions or concerns about the rental process.
- Why work with them? Turnkey investors typically opt in for a property manager rather than hands-on management, which means they won’t have as many questions or concerns when searching for a property or figuring out the rental process.
- Value-Add Investment: These investors identify properties with potential for improvement, make enhancements to increase value, and generate returns. If you’re finding hidden gems that just need a little bit of work to boost their value, this type of investor is an ideal client.
- Why work with them? If you’re frequently identifying hidden gems with potential for large gains after one or two enhancements, this type of investor is a great fit. Not only can you work together to identify great deals, but you will more than likely become their favorite agent.
- Short-Term Rentals: Also known as vacation rental investors, short-term rental investors purchase rental properties and rent them out on a short-term basis, usually through platforms like Airbnb.
- Why work with them? Short-term rental investors are a great match for real estate agents who work in a popular vacation location or business districts (keep in mind business travelers).
- Long-Term Rentals: Long-term rental investors purchase rental properties, generating monthly revenue from tenants.
- Why work with them? Long-term rental investors will need to get tenants into their unit as soon as possible if they want to have steady cash flow. This is a great opportunity to provide helpful resources to find and screen tenants, establishing you as their go-to real estate resource.
- 1031 Exchanges: 1031 exchangers defer capital gains taxes through reinvesting proceeds from the sale of one property into another of equal or greater value.
- Why work with them? Not everyone has the skillset to support an investor in a 1031 exchange. Developing these skills will set you apart from your competitors and provide you with another tool to leverage to attract potential clients. There’s a time requirement as part of a 1031 exchange, so these clients will be motivated to move quickly.
Knowing the different investor types offers many benefits to your business other than just knowing the correct terminology. Depending on your market, sphere of influence, and interest, you can find your clientele niche and continue to build out your knowledge and clientbook based on this focus.
It’s important to keep in mind that the many investor types are not mutually exclusive and one investor can fall into multiple of these categories.
Recruiting and Retaining Investor Clients
Now that you have your foundational knowledge for who your clientele is, let’s dive into lead generation and retention strategies for working with property investors.
How to Find Real Estate Investors
Most markets have a large network of real estate investors who need a trusted agent in their back pocket. There are multiple ways to locate those clients and get in touch with them:
- Networking: Networking is the age-old tip for success! The best way to find real estate investors is to attend local real estate meetups and events. This is your opportunity to make a good impression and begin to form connections within your community. Check out Meetup and social media for local upcoming events.
- Referrals: Ask your current clients for referrals. Most property owners find their realtors through friends and family, so this is a great way to recruit loyal, vetted clients. Consider offering an incentive for verified referrals such as a gift card to a local restaurant.
- Take advantage of digital marketing tools: Create a website, post on social media (we recommend Facebook and Instagram), and invest in a CRM. The more active you are online, the easier it will be for investor clients to find your business. Don’t be afraid to interact with other investors you may find on social or other websites. You never know where you could find your next lucrative deal.
Strategies for Working With Investors
Now that you have interested clients from your successful recruitment strategy, it’s important to be prepared for your new clientele. This involves staying up-to-date on industry trends, preparing answers to frequently asked questions, providing valuable referrals for investors, and staying efficient and communicative.
1. Stay Up-to-Date on Your Market
All real estate professionals should be in the know on market trends, but it’s absolutely essential to be on your A game when working with all types of real estate investors. Investors will rely on you to provide accurate information on your market and provide insights into any potential opportunities that pertain to their portfolio, particularly if they’re interested in investing from out of state. If you have insight on off-market deals, this is a great tool to maximize your real estate business. Plus, the more you know and the more information you can provide to investor clients, the more likely they’ll be a repeat client.
Another reason to do your homework is that you’ll be better equipped to accurately price properties and navigate negotiations. It’s more than likely that investors have also done their research, so you don’t want to be caught in a situation where you’re overpricing or underpricing a property.
Possibly the most important reason to research your local market is to make sure that you and your clients are following all rules and regulations. You don’t want to end up in a situation where you’re providing advice to your clients that could get both of you in legal trouble. Join your local real estate association, check out your government website and publications, and keep an eye on the news for any impactful changes that affect real estate investments in your area.
2. Provide Quality Referrals
No matter what types of real estate investors you’re working with, they’re going to turn to you for their real estate questions and advice. A great, reliable real estate agent is one that is prepared to provide their clients with information on how to move forward with their investment, effectively manage rental properties, and maximize cash flow. Most real estate agents provide a packet to their clients chock full of information, referrals, and special offers.
One of the most common questions you’ll receive from a new investor client is regarding next steps for managing their new investment property. Renting out a property has a lot of moving parts like state-specific lease agreements, tenant screening, rent collection, and maintenance. Generally, investors choose between self-management or hiring a property manager to manage their property for them. Be prepared to provide the pros and cons of each option and referrals for both. For an easy all-in-one free self-management solution, refer your clients to TurboTenant. TurboTenant even provides special branded referral and educational resources for real estate agents to pass along to their clients.
Other helpful referrals you could provide include a trusted attorney, local contractors, maintenance professionals, maid services, real estate investor communities, and a lender. Plus, if you are a consistent referral source for local businesses, it’s likely that they’ll refer their clients to you as well, increasing your sphere of influence.
3. Be Efficient and Communicative
No one hates difficult and slow communications more than a real estate professional ready to close a deal. Investor clients seeking out investment opportunities, no matter if it’s single-family homes, multi-unit properties, or a fix and flip, will want an agent who can move as quickly as them. While this may seem like a simple tip for successfully working with clients, strong communication techniques are often overlooked. The good news is that there are endless tools available to help improve your communication touch points and efficiency while juggling clients and your personal life, like a good customer relationship management software, or CRM.
Make sure you’re using a customer relationship management software (CRM) to track leads, keep up with your existing clients, and to guide your communication strategy. CRMs are a game changer for real estate agents and the amount of time they’ll save you by creating clear, effective, and efficient messages to your clients is priceless.
Make sure your business operations are up to date. If you’re wondering what this means, you probably have some work to do to make sure your business strategy is resonating with clients of all types. Savvy and successful real estate investors won’t be able to find your business if you’re not online, and they definitely won’t want to work with an investor who knows less about real estate marketing than they do. Check out the most essential tools that all real estate agents should have and you’ll see immediate improvements in your recruitment and retention strategies.
Working with real estate investors can be fruitful and an ideal client for real estate agents. While picking a clientele niche may seem simple, you won’t succeed without strategy and intention. Real estate investors boost their cash flow by taking a huge financial risk, so they have high expectations and are well-researched individuals. Make sure you’re prepared for the challenge by educating yourself on the different types of real estate investors, what’s going on in your local market, and what your client’s specific goals are. To really seal the deal with real estate investors, be a wealth of information for them by providing helpful referrals (and maybe even exclusive discounts!) as well as running a speedy and communicative business.
TurboTenant loves to work with the top real estate agents, which is why we’ve developed exclusive resources just for you. Don’t forget to check out our real estate agent resource page to build out your professional toolkit with curated tools, information, and deals!