If you are prepared… - Posted by B.L.Renfrow
Posted by B.L.Renfrow on February 20, 2001 at 09:15:14:
…to buy properties the conventional way, using cash or getting a loan, sure. But if you’re starting with little or no money, bad credit or trying to focus on “creative” deals, then you’re probably going to get frustrated rather quickly.
Why? Because 99% of RE agents are only familiar with the conventional methods of buying/selling. When you start talking about subject-to, lease options, etc., they will immediately lose interest because they won’t consider you a serious buyer. And of course, they want to know where their commission is coming from, so if no money is changing hands up front, they will assume – probably correctly – that they either won’t get paid, or will have to wait for payment. It’s not really fair to criticize them for this. Fact is, there are a lot of wanna-be investors out there who WILL waste an agent’s time and cannot or will not perform.
I see many newbies who decide to become investors, and their first stop is a RE agent – who promptly tells them it can’t be done. Then, unless the newbie investor searches out other options, their investor career is over before it starts. After all, a pro in the RE field told them that the creative stuff won’t work.
How do I know this? Well, guess where my first stop was when I decided I wanted to get into this business. The agent (whom I knew personally) asked immediately how much cash I had for downpayments. When I answered honestly, I was promptly escorted out of the office with, “Yeah, I’ll call you if anything comes along.” Of course, it didn’t. Fortunately, I was motivated enough to explore other means of accomplishing what I wanted to do.
If you’re set up to buy with cash (or hard money) then by all means, using a good agent/broker can mean more deals. But if your desire is to use someone else’s money, I think your best bet is to become familiar with lease options, subject-to, owner financing, etc. and deal directly with sellers. After all, if there’s no commission for the seller to pay, that should mean more profit in your pocket.