As a happily hyper-busy real estate professional, one of my biggest challenges is keeping up with voice mail messages during a typical work day.  On the other hand, when I am “off duty” I like to be present and attentive to my friends and family and purposefully do not answer calls.  Sometimes this is a problem.  What I needed was a more efficient monitoring system to keep up with urgent messages and separate them from non-urgent messages.   I found Google Voice and a dedicated email address on my Blackberry to be an ideal solution, here are the benefits of setting this system up for yourself:

• Voice mails are transcribed to text so you can quickly read them anytime you can’t or don’t want to answer
• The recorded messages are available to listen on your phone or the internet at any time in any order
• A phone log is automatically generated of all your messages to save or plug into CRM later
• You can “return calls” via SMS or email rather than calling back if appropriate
• No need to log-in to voice mail or take notes about the messages (or worry about losing your notes)

Following is “before and after” voice mail story and an easy to set-up system that allowed me to respond more efficiently to clients and customers and also enjoy free time without the stress that I might missing something critical.

My Problem with Voice Mail

Here’s a typical scenario that used to happen to me all the time, which I refer to as Voice Mail Hell:  I have a two hour meeting in the morning with an investor group.  Because I need to focus completely on the meeting, I have my phone set to silent.  But the phone lights up every 15 minutes and people are leaving voice mail messages.

At the end of the meeting I have seven new voice messages to listen to and then return calls.  The first message I take down notes in my handy voice mail log sheet, but the second is urgent, so I hang-up to return the call right away.  There are still five messages left in my voice mail box.

After I finish the urgent call, I dial in again to the voice mail system.  I get three more messages written down and the phone rings.  It is an important client calling.  Again, I drop the voice mail system to take the call.  During my twenty minute client conversation, two more calls come in and more messages stack up.  You get the picture.

How did I cope?  I have always been pretty diligent about updating my contacts, so when people call who are in my database, I can see their name on caller ID.  This is helpful because I can just call them right back without listening to all the voice mails.  But I also get a lot of calls from numbers that are not in my contacts, some of which may be urgent calls.   In order to get to those messages, I have to troll through the voice mails in the order they came in.  I am a pretty committed Blackberry fan, but do envy iPhone users who can skip over and listen to voice mails in any order.  Even so, I think this system is better yet…

Google Voice Mail Transcription, Free!

The answer to my voice mail challenges was a new Google Voice phone number that transcribes messages into text, and then forwards them to my SMS and/or email inboxes.  Here is how it works:

• Callers dial my cell phone number, which auto forwards to my Google Voice number if I do not answer
• Voice mail messages are recorded at my Google Voice inbox rather than my cellular voice mail
• The voice mail is transcribed by Google Voice into text, which is programmed to send a copy to a dedicated email account on my Blackberry (it can be programmed to deliver SMS text messages of the transcription also, but I prefer just the email version on my phone)
• The recorded message is stored in my Google Voice inbox online.  The message is also available to listen on my phone browser.
• I can quickly view a list and the complete contents of all my voice mails on my cell phone in text so I can read them during meetings
• I am now free to read, listen and respond in order of priority either via email or by returning the calls.

This system is extremely efficient for me compared to having to dial into my voice mail and listen to messages (in chronological order).  Also, I don’t have to write down any messages, or worry about losing notes.  Having a written log and the recordings kept in an inbox on my computer has been heavenly.   When convenient I can save or delete or plan extended follow-ups for the calls.  Finally, a text system is discreet enough to check messages during a meeting (or at the ballpark) without having to hold a phone to your ear and take notes!

Thanks Google Voice!

I have a few key methods of qualifying real estate investors to determine whether or not I want to work with them.  This has little to do with the amount of experience they have, and less to do with the amount of money they have then you may think.  These are both important factors in determining how I will work with an investor.  But the critical factor in whether to work with them is based in their commitment and integrity.

During my first interview or call with a new referral, I ask the standard questions about their experience, available capital and credit score.  More importantly, however, are the questions about their goals and intentions.  The way certain questions are answered, including was is NOT said, usually gives me a good indication about whether I can establish a mutually beneficial relationship.  With practice, you can learn these evaluation skills to qualify investors, and only work with those who will be good clients.

The first step in this learning process is to understand the Types of Residential Real Estate Investors.  This will allow you to differentiate between clients, customers and vendors as you grow your business through networking and marketing.  All investors will fall into one or more of the following categories.  Less experienced investors generally require more time, but more experienced investors will require more skill and knowledge to earn their business.  As always, the relationship must be a “win-win.” 

Types of Residential Investors

Scouts

Scouts, also known as Finder’s, are usually novice investors looking to get started in the business.  Many first time investors do this type of work because it does not require  money or credit to start. A scout’s objective is to source property leads for more experienced and capitalized investors.  Scouts gather information about potentially profitable properties and sell this information to another investor.  A good scout will include the following information in his or her report to the investor:

• Location of the property
• Owner’s name and contact information
• Condition of home, including pictures (recently taken)
• Estimated as-is value and remodeled value of the property
• Asking price on the property and current loan balance
• Estimated cost of repairs to the property
• Liens on the property or other applicable circumstances

The fee that a Scout charges for this information and/or lead is determined based on the value of the property as well as the estimated profit that the investor is likely to make.  This can run from a few hundred dollars up to a few thousand dollars on each property.

Many people want to start out in the business being dealers (wholesalers), but should learn by being a scout for more experienced investors.  The best scouts will succeed in the business, and eventually become Dealers.

Dealers

Dealers, also known as Wholesalers, are much like a scouts but with one significant difference.  They sign a purchase and sale contract and/or purchase the property to resell for a wholesale profit margin.  This level of control requires more capitalization and additional risk, so dealers stand to make a larger profit from the investment than scouts.  Typical dealer mark-ups are between $5-$25,000 per property depending on how “deep” it was purchased and if any additional costs or work are involved in selling the property.

You will often find people in the investment real estate business who are acting as dealers, but are really scouts.  Investors who contract a property but are not capitalized to close the property are not dealers.  They are often misleading the seller of the property (i.e., making a “cash offer” without any cash).  This is a tactic often taught in the “no money down” seminars and investment courses.   The difference between a dealer and scout is the dealer will close on the property purchase (or at least have the ability to close) before reselling to a rehab or landlord investor.  Scouts who act as dealers but are unable to close transactions often leave the unknowing seller with no buyer at the closing table.  This creates ill-will about the business of real estate investing and should not be done.

Most dealers will sell their properties “as is” to another type of investor, performing little, if any, work to the property.  In some circumstances a dealer may not close the property at all, or may do what is called a “double closing” or simultaneous closing.  An “assignment” means the dealer is selling the contract to another investor who closes the transaction.  In a “double closing” scenario, the dealer will only own the property for a few minutes between two closings.

More experienced dealers may perform major repairs to a property before selling it to another investor.  In this instance, the dealer will purchase a property, perhaps at a steep discount because of a structural problem, and do the “heavy lifting” of fixing a foundation problem or replacing roof and mechanicals.  This strategy involves the dealer making the property appealing to novice rehab investors who are looking for “cosmetic” type remodel projects.

Experienced dealers make excellent partners for your real estate investment business or investment oriented agency.  They often have deal flow and an inventory of properties that are not available through the MLS.  Good dealers understand the value of your role as a buyer or an agent working with investor buyers.  If you a rehabber or an agent working with fix and flip investors, finding and establishing a relationship with a dealer like the one described above is an excellent source of properties.

As with any business, there are talented and forthright dealers, and there are those who give the business a “bad rap.”  When working with dealers, be sure to get references and check local reputation centers like the Better Business Bureau.

Rehabbers

The rehabber is the most common (and famous) type of real estate investor, and so requires little explanation.  In the investment community they are called “retailers.” On TV and the internet they are called “fix and flippers.” Rehabbers generally purchase properties through agents, or from a dealer or scout.  The objective is to remodel and then sell properties to owner occupants at the highest possible “retail” price.  The rehabber puts the most money into properties and has the most risk.  Rehabbers also stand to make the largest profit if they are skilled at the trade.

Rental Landlords

Rental landlords are seeking properties that enable them to earn a profit on a monthly and yearly basis from rents over and above all expenses including debt service.  Rental landlords are generally the most sophisticated of residential investors because they are working on long-term wealth building rather than short term income.  A large percentage of landlord investors are not in the business of real estate; most have other income sources.  Investing in real estate is usually retirement planning and wealth building for landlord investors.  As such, they require the most knowledge and experience to work for as an agent.  For the experienced investor or investment oriented agent, landlords are very good long term relationship clients because they are usually well capitalized and buy multiple properties per year.

Balance Sheet Investors versus Income Investors

As you meet and qualify investors to work with in your business, you will gain a deeper understanding of experience and capitalization levels within the spectrum of investor types.  On a macro scale, I qualify investors as either Balance Sheet or Income investors.   In very simple terms a balance sheet investor has an amount of capital that he or she wants to grow on a risk adjusted basis for net worth gains;  an income investor is seeking current income from operating and selling real estate.  The difference to the adviser or agent is the level of legal and tax planning that is involved with the projects or investments.

As the nation continues to take its proverbial medicine for the spoils of Wall Street’s residential real estate backed securities fiasco, Realtors are suffering massive drops in transactions and income. If you are working the traditional residential market, you’re likely facing pretty grim volume now, and for the near future.  How about this for a change?

Stop Sucking Wind

• STOP wasting your time working evenings and weekends with “liar buyers” who drag you to see hundreds of houses and never make a decision.
• STOP listing over-priced properties that never sell or taking on Short Sales that require hundreds of hours of negotiations.
• STOP begging your friends and family for their real estate transactions and ruining relationships over business.
• STOP expensive and time consuming prospecting and holding lonely Open Houses.
• STOP working with clients that are barely qualified for loans and hoping the deals close to get paid.

Yes, you really can STOP all this nonsense by learning a few new skills and making a simple change in the type of client you work with.  In a down market, residential real estate investors are very active buyers (and sellers too).

Investors are desperately seeking good real estate agents who specialize in investments.

I know, you don’t work with investors because they make low ball offers, use your knowledge, experience and tools and then burned you for the commission.  Right?  Has this really happened to you or have you just heard about them happening to other agents?  Agents who suffer these set backs have not learned to find “real” real estate investors.  It is not hard to find them!  Investors are everywhere, and this $300 billion market segment is extremely under served.   Since your colleagues don’t want to work with them, you will get multiple, consistent referrals right from within your own office!

How would you like to have your best volume year ever this year while your colleagues fight over the few good listings available and cut their commissions to get them?

• Learn how to dramatically increase your commissions and income in a segment that is booming during the current housing slump and credit crisis.
• Learn how to find serious and qualified buyer clients who each purchase multiple homes per year, during normal business hours, treat you with professional respect, and make decisions quickly without emotion.
• Learn technological skills that will streamline your business and protect your most precious asset – TIME!
• Learn about the business that has created more millionaires than any other business ever! Real Estate Investing!

Learning to separate the short-sighted amateurs and “seminar graduates” from professional investors or well qualified high-income “retail investors” is paramount to earning and enjoying business success for agents.  The objective in attracting the latter two is building long-term mutually profitable relationships.

What can you do now?  Start by bookmarking this site.  This entire blog is dedicated to teaching agents and investors about investment property.  It is written by people with significant real world experience in the business of investments, agency, construction and finance.  You are also invited to download our Investment Property Training manual and subscribe to the Private Market Newsletter in order to be informed as the content and information grows.  Our team offers specialized training for both investors and agents.  We look forward to communicating with you further.

In the current financial environment, residential real estate investing continues to be a viable business, but the business has changed dramatically.  There are more challenges and deals require different credentials and strategies compared to recent years of loose lending standards and appreciating prices.  Private investment placement managers and established cash buyers are squeezing out the “mom and pop” investors because of lack of funding.  .

The housing market, driven by Wall Street speculation and mortgage backed securities, peaked in 2005, softened in 2006, crashed 2007-2008 and is now bottoming in 2009 in many markets.  Prices of houses and condos nationally have dropped significantly as has the number of homes being sold. The record number of foreclosures combined with a melt down in lending has created disastrous effects on the economy and changed the business models of most real estate professionals.

Like the businesses of real estate agency and mortgage brokerage, a cleansing of the real estate investment industry is occurring.  The Fix and Flippers of the boom years, mostly people who used 100 percent mortgages to buy appreciating houses for quick resale and profits have disappeared in most markets.  The real estate investors left over (the ones still in business) are well capitalized and using a buy and hold rental model.  Many are turning to private equity instead of banks and credit unions.

One major exit strategy for investment companies now is to sell the properties to passive investors who are getting into real estate as an adjunct to their regular jobs.  They are known in the business as “retail” investors.  These types of investors can still secure financing on investment property, and the companies servicing them successfully are providing the closest thing to triple-net (NNN) investment that the housing business has (NNN is a commercial real estate investment type where the owner is not responsible for any of the maintenance or expenses of the income property).  Pure passive investments in single-family were once difficult to find, but there are more service companies providing these opportunities than ever before.   There is also more demand from investors as money pulled from the market sits idle and falling to inflation in zero to low interest accounts.

In addition to the turn-key investment business model for retail investors, high-quality rehab and resale to first-time home buyers will work in some markets.  The first time home buyer market will be less affected because the buyers do not have any “baggage” – they don’t have to sell a property to upgrade.  Also, the loan programs for this type of borrower are healthier than normal conforming loans.

For most of my real estate investment career, finding the deal was the difficult part of the business.  Once you contracted a good deal, the capital was easy to find and it was relatively easy to sell.  That has all changed now.  There are properties at good values available everywhere from banks and motivated sellers, but the capital and sales are hard to come-by.  Once again, we real estate professionals and investors must reinvent ourselves to adapt.

I like the quote from Warren Buffet, “Be greedy when others are fearful and fearful when others are greedy.”  As difficult as it may be, I continue to recommend our clients invest in quality real estate now during the down cycle.  Please let me know I can be of assistance to you in any way.