Monday, October 25, 2010
Finding The Right Realtor For Flipping
Your choice of realtor to represent you in flips is one of the most important decisions in your investment purchase process. This is not the time you want a rookie agent. Your agent should have a good working relationship with the main REO and short sale listing agents in your geographic area. This asset is important because the listing agent may be able to help your agent structure your offer in a fashion that the selling asset manager wants to see.
While your agent isn't a contractor, he or she should be able to look at a fixer and be able to give a close estimate for bringing the property back to move-in condition. Most important of all, your Realtor must have a very accurate estimate of what the rehabbed property will sell for. Your Realtor needs to be very familiar with the neighborhood and it's associated price trends. An over-optimistic rehab estimate or resale price will result in a lower profit or, worse, a loss on the resale.
You need a Realtor who will promote the property, not just list it on the MLS. Before the property is even finished with the rehab, there should be a "Coming Soon" sign on the property with a website showing the progress. Will the Realtor do an email blast to all the agents in the surrounding counties? These two actions could have the property in escrow before the work is even completed.
Your Realtor should also take photos of the entire rehab process and leave a copy of the photos in an album on the property and on the website. This allows potential buyers to see all the work that has been done.
Find a realtor who has an existing client base of investor buyers looking for income property. The Realtor, therefor, should be well versed in 1031 exchanges. Once again, it is impossible to put too much value on experience.
Finally, your Realtor should be willing to discount rather drastically their commission on the sale of the rehabbed property for two reasons. First, they already made a commission on the buy side of the property. Secondly, the faster they sell the rehabbed property, the sooner they can make another commission on your next project buy.
Experience, experience, experience...... There is no substitute.