Memo – Realtors – Sales Drying Up? Pivot To Selling Investment Properties

Any Questions or Concerns right now? Stop reading and call me on (732) 673-0510.

To listen to the podcast version of memo click here —> Podcast Version

I deal with thousands of real estate agents every year. One interesting fact about them though is that they are the least likely to think outside the box when it comes to exploring all possible sales opportunities.

Most agents learned how to sell forever homes to families and then they stopped their training.

Today, with the rates increasing so wildly, those that have limited themselves to marketing forever homes may be facing a very uncertain future.

So, what can be done? I urge real estate agents to learn how to sell listings as investment properties as well as forever homes.

There are plenty of investors, sophisticated and unsophisticated, with cash in their pocket, who want to buy the same homes that are listed as forever homes. There are many people with stock portfolios crashing that are looking to diversify. They all need seasoned real estate agents to present them with opportunities.

Any investment advisor will tell you to diversify your investments. If all of your investment and retirement assets are tied up only in real estate or only the stock market, or only in crypto, then you are overly leveraged in one investment category.

Most people are overly leveraged in stock and bonds. Real estate is a good hedge against them.

Are you a real estate agent with active listings? Have you analyzed all of those for investability opportunities? Have you marketed them to the investor community?

If not, then you are ignoring a complete and vibrant market of buyers who may be interested in those listings!

Many agents are frightened of rental properties. This always amazes me. Investing in real estate can be as safe or safer than the stock market and has future cash flow and retirement advantages the stock market does not offer.

So if you’re afraid of rental properties, I urge you to contact me so I can explain the way that you can sell these properties with confidence and with full integrity.

Why compete with forever home sales for the next year or two? Forever home sales are always cutthroat and now with the increase in rates it’s worse than ever.

Many agents may not be here a year from now unless they do something that no one else is doing.

Investment Properties Advantages

1. Much Wider Range Of Territory – Not Limited To Forever Home Areas
   1. Investment property buyers do not need to buy a property extremely close to home. I suggest using a 300 mile radius from your location to research investment property opportunities. Just think of how many more listings can now be sold by you if you simply pivot to investment properties. There could be 1,000 times the inventory.
2. Eager Buyers With Cash
   1. Stock markets have crashed. People are looking for a safer investment and to diversify. Real estate is the answer.
      1. Market this to your existing client base. Simply put this in the subject line. “Your Stocks Are Down, Diversify With Real Estate.” Of course you need to analyze opportunities to present to them ahead of time.
3. Less Emotional Buyers – Investors are about the ROI (return on investment) which is a much easier and straightfoward sell. 
4. Does Not Matter If Value Increases Over Time
   1. Imagine Selling Homes Where Future Value Does Not Matter?
      1. Most investors want to buy and hold for long term cash flow. So there is no need to sell them on the value increasing over time like with forever homes. I cannot stress this one difference enough.
      2. This is why some homes that are not forever home worthy, make great investment properties.
5. Rental Properties can provide retirement cash flow without selling the asset.
   1. Remember, to get money out of the stock market, you need to sell those stocks. With real estate you can get endless cash flow and never need to sell any of the real estate. This is one of the most important distinctions and benefits of investment properties.
6. Less Volatile Value Fluctuations
   1. Real estate values are very stable. The stock market at times, can be more volatile.
7. Real Estate – Based In Reality
   1. Stock prices don’t seem to have a verifiable basis of value. Whereas in real estate we have a true market. We have comparisons of similar homes sold over time. We can improve our real estate. It is real in three dimensions. When was the last time you held your stocks? 
8. Very few other real estate agents are doing this extra work and research. 
   1. With investment properties there is the complete opposite level of competition compared to cutthroat forever home sales.
9. Real Estate Has Some Other Strong Benefits
   1. You can increase the value of your properties compared to others.
   2. Real estate can be insured against losses.
10. Easier To Sell The Financial Benefits of Investment Properties Than Forever Home Attributes.

I suggest that you learn how to do an investability analysis on all properties you want to market to investors.

The most important piece of information to do an investability analysis is to have the fair market value rent. I cannot stress this enough.

Instead of forever-home selling tools, you want to have detailed analysis of possible cash flow and tax impact for these properties that you’re going to sell now as investments.

Remember, investors are caring about the bottom line and none of the emotional or usual reasons why families are buying.

Many agents are scrambling right now and many are extremely nervous. Please trust me when I tell you that this can bear financial fruit in good times and bad.

Quite often I say that if I was a real estate agent I would only sell investment properties. Remember investment properties are the same listings that you’ve been trying to sell as forever homes. It is simply a different marketing strategy. And again, the market area is exponentially larger for investment properties than for forever homes.

There are two main takeaways to this podcast / memo. Remove any misgivings and fears you have about rental properties, and learn how to package listings for sale to the investor market.

Questions? Concerns? Call me on (732) 673-0510.