Brokers a major asset to investors during what can be a challenging time: RCN's Nate Zielinski
The following article was provided by RCN Capital
When real estate investors begin their career, their sole focus is on acquiring that first property and making sure the initial deal is completed successfully. It can take a little time in the industry, but most real estate investors eventually shift their focus from one property to multiple and will look to scale their portfolio.
When scaling a portfolio, challenges can arise, and these investors not only need preparation but support as well. There are a number of areas – such as industry education, financing, and deal scenario conversations – in which a real estate broker can offer that support, be an asset to an investor looking to scale, and in turn, grow their business alongside the investor.
Education
An educated broker is one of the most coveted partners a real estate investor can have. There are a number of different ways a broker can be educated, so making sure all aspects of the deal process as well as the industry itself are vital.
Within the deal process, a broker can be educated on where to source a deal, meaning if they have a list of lenders that they typically work with, they should know where to send their client’s deal to expedite the process. Education can lead to quick decisions and save time for your clients. Different lenders specialize in different loan programs, so as a broker if you dial in on where to send what, a faster closing becomes easier to achieve, and investor/broker relationships get strengthened.
As for the industry specific knowledge, this may take time, but a broker that can be in tune with the news outlets that cover the industry, social media personalities that live the industry, and books that teach best industry practices. These are all areas that can be a wealth of knowledge for brokers. Fellow industry professionals can also serve as a mentor for brokers and help them navigate through some of the tougher deals they come across during their career. There are a lot of helpful educational tools out there, but nothing can replace learning on the job.
Education can provide insight into which way the market is trending, what areas of the country are currently favorable for investors, as well as what buyers and renters are currently looking for. These are all crucial areas of knowledge in which a broker can provide value.
Financing options
As a broker, it is paramount to have options when it comes to where to send a deal for your investor client that is looking to scale their real estate portfolio. Typically, when it comes to scaling, an investor will have multiple property types and will thus need multiple financing options. Whether it’s property size, property value, property type or location, having a lender on speed dial that can help is a must. The last thing a broker should want is not to be able to find a solution for their client when they ask as this can directly correlate to the investor either finding a solution on their own or replacing the broker with someone else.
With a variety of options, a broker’s client can also fund multiple deals at once, a surefire way to accelerate scaling a portfolio in the industry. When an investor has the confidence their deal will find its way to a proven lender, they can try different investment types and be creative with their portfolio. A diverse portfolio is one of the best ways to hedge against inflation, and a broker that can provide options is one of the best ways to support growth.
Networking
As with most parts of the real estate investment industry, networking can be one of the significant benchmarks for success. In this industry, your network is your net worth and a broker that has connections can unlock so many levels of success for their investor client. Networking is important because there are so many components of the loan process, and as a result, many people can help along the way.
At the beginning of any deal, a broker can count on a local real estate agent to send them leads that align with their client’s preferences for a given zip code or county.
From there, connections in the lending space are entirely up to the broker. Traveling to local real estate events as well as national trade shows can bolster a broker’s contact book and provide the necessary options to foster scalability and growth.
Tax, insurance, and title agents are other noteworthy connections worth having as a broker so they can refer their client to a trusted professional that will provide a competitive quote and quality customer service.
Appraisers and legal counsel are two connections that are a must as the deal nears the finish line and with these aspects being crucial to the loan getting closed, it is important to not only have options but to vet them thoroughly.
Start supporting scalability and growth
With these three pillars, brokers everywhere can help facilitate growth for their investor clients. Scaling a real estate portfolio requires time and effort but can be made much easier if the broker is able to lay the groundwork on behalf of their client. An investor that is looking to scale their portfolio can allow a broker to scale and expand their own business so these opportunities should not be taken lightly. Start your journey today with these tips in mind as a broker that is built to help investors scale their portfolio and support growth.
