Why Investors Often Are
Brokers' Best Customers

Business can be challenging for real-estate professionals. Even with interest rates at historically low levels, the uncertain economy makes homeowners hesitant to relocate or trade up. In many markets, there just aren't that many clients out there, and competition is fierce to get their business. The single hot area seems to be foreclosures, but that isn't necessarily bad news. Big money can be made in this niche -- if you can cultivate relationships with the right people.

Large and growing numbers of people work as full-time real-estate investors. I'm one of them. We buy properties from motivated sellers and resell them at a profit. For real-estate professionals, this can be a huge source of repeat business. We look for realtors who understand how we work and can meet our unique needs. Become one of them and you'll gain access to a largely untapped source of continuing revenue.

Many real-estate agents worry that there's something unsavory about foreclosure investors. But most people who do this for a living are honest and compassionate. Investors solve problems for people who are struggling, and our timely intervention often produces gratitude. Once you learn how professional investors operate, you'll feel reassured and even excited about getting a good one on your team. It's an interesting and potentially profitable way to grow your bottom line.

How can you as a real-estate agent stand out from the pack and earn repeat business from full-time investors? Here are five tips that can help ensure success:

1. Know what investors want and deliver it.

Knowledge is power. Every transaction is different, so assume nothing. Take the time and effort to clearly identify an investor's criteria for a successful venture. For example, an investor who wants to acquire an income property and hold it over time will have different criteria than one who wants to buy, fix up and resell a property immediately. Ask your new client focused questions that will help you to understand these criteria. When you know what he wants, you'll be ready to work on his behalf.

2. Save your investor's time.

Once you understand your client's criteria for success, pre-qualify each deal in advance. Don't waste her time bringing her prospective deals you haven't fully investigated. The agents I work with pre-sort deals according to three buying criteria:

• A specific location,

• The reason the property is being sold, and

• The price -- 80% or less of market value.

Whenever my agents bring me a deal that meets my criteria, I have them make an offer for me.

Most serious investors are juggling numerous details of their investing businesses, from tenants to closings to repairs. It helps if you can make life easier for them by handling as many details as possible about each deal you're arranging. This is a powerful way to add value to your services. You might even have your staff handle these details for you, freeing you to pursue more business.

4. Don't try to make decisions for the investor.

One of the biggest mistakes an agent can make is trying to make up an investor's mind for him. The most successful investors are motivated by freedom and control. They tend to resist interference from others. Furthermore, they may perceive an agent's enthusiasm as overstepping boundaries. Gather information, make recommendations, explain any potential consequences, and then let the investor make decisions for himself.

Twenty percent of your clients are likely serious buyers who do actual deals month after month. The other 80% will take up a lot of your time but won't buy or sell that often. Each year, cull your client list and create two categories. The first category includes only serious investors whom you contact personally to ensure they remain satisfied with your service. Send gifts and find other creative ways stay to connected with them.

The second category is the mom-and-pop investor. At most, this client buys a few properties annually but takes a disproportionate amount of your time. Ask your assistant to work with the client, or better yet, refer him or her to a struggling agent in your office. He or she will appreciate the favor, and you'll appreciate having time free to make tenfold more commissions.

-- Mr. Finkel is a professional real-estate investor and the host of "Real Estate Radio," a nationally syndicated weekly radio show. This article was adapted from his book "Making Big Money Investing in Foreclosures without Cash or Credit" (Dearborn Trade Publishing, 2003).

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