You can’t be naive when getting into real estate investing. Someone will always try to suck more money out of you than they have to - if you let them. If you or someone you know, has been burned in real estate before and are more than hesitant to get into real estate investing, here is my advice to you.
Know what to look for…
Obviously, you want to make sure that the broker or the investment specialist you’re dealing with is professional, trustworthy, reliable. Be sure to ask for plenty of references and a great track record in the business.
AVOID: Someone who is new to the business especially if they haven’t invested for themselves before.
Not to say that the person you’re dealing with hasn’t done mistakes, it just means you’re looking for an honest and genuine person who won’t cheat you when you aren’t looking.
Friends or family first...
Work with a realtor who was referred to you - trust me, it saves you time and money. If they worked great for friends or family members, they will most likely work great for you and their credibility already checks out. It’s less investigating work on your behalf.
Ask the right questions...
Find out if the expert knows what they are doing. Here are the questions that help you find out exactly who you are dealing with.
How long have you been in the business?
Do you have your own investment portfolio?
If yes, how many properties do you own?
Is this a good time to invest? Why?
What areas do you recommend investing in and why?
Do you follow certain strategy? (Long term passive income, fix and flip, foreclosures).
Is there any criteria that you follow? (Geography, demography, location, type of tenants, etc.)
What kind of properties you typically buying? Residential? Commercial? Single family? Condo? Shopping centers? Apartment complexes?
What’s the return on investment (ROI) can you get in this market?
What other types of services do you provide? (financing, property management, insurance, construction work, etc.)
Can you show some examples for deals you have closed lately?
Do you provide a broker’s contract?
The answers should be logical. However, always trust your gut feeling. If it is telling you that this is a legitimate realtor - mazal tov! You should continue to work on deals with them.
Take Your Time...
If you feel that this realtor is putting too much pressure on you to close it’s a bad sign. A good realtor should let you make a decision that you are comfortable with and at your own pace.
However, don't confuse their “closing questions” as them rushing you or trying to deceive you. Those questions are there to find out what concerns you about the deal they offered so solutions can be found.
It's ALL in the details...
Along the evaluation process pay attention to small details. Be sure to look for punctuality and that their knowledge about the details of certain area or property are accurate. If you get inaccurate information - it could be that this realtor is not detail oriented or perhaps someone who tends to provide false information in order to make the investment more appealing than the reality.
Over the years I came across many “investment specialists” and brokers who have provided their clients with inaccurate information about deals, leading their clients to a bad deal and ending with a loss of precious money and time.
When a client approaches me, I make sure to have all of the answers in order and I’m very well prepared for any question. Being in the real estate industry for so many years I can deeply relate to these concerns therefore I’m very well prepared to answer all of these questions but more than anything I’m making sure I have the properties and services to offer that will meet and support their investment needs.