For the first six or seven years of my business, I was a wholesaler primarily focused on short sales and pre-foreclosures, and then I moved into flipping properties and rehabbing. Today, I’m mostly a private lender for flippers, residential properties, and commercial deals. As the market’s changed, I’ve adapted my business model to take advantage of better opportunities.
That adaptability is vitally important to every entrepreneur and investor out there. No matter where you start out, as things start to change, you need to be willing to change too. Travis Tomlinson from Lokal Real Estate here in Ohio had a similar epiphany. A few years ago, he was investing in fix and flips, but 2008 dried up all of his funding.
Then Travis moved into rental properties just to have some cash flow coming in. Today, Travis owns a real estate brokerage firm that does 300-400 transactions a year. Expanding his real estate investment business into the Realtor side of the business has allowed him to give sellers more options. He’s got three great reasons that investors should consider adapting to a changing market by getting a real estate license.
Keep Your Finger on the Pulse of the Market
Like many other real estate investors, Travis was inspired by Robert Kiyosaki’s Rich Dad Poor Dad book. As he invested in fix-and-flips himself, he realized that a real estate license would help him have a better idea of where the market was shifting to before it actually moved. This inside viewpoint would give him an edge over other fixers and flippers who were still hyper-focused on the retail side of the business.
As the owner of a brokerage firm, Travis tells his own Realtors that there’s no better way to make money while you’re learning about real estate investing. Everyone has bills to pay, and it takes time to grow your real estate investment to the point where they can fully support you. When you’re working as a Realtor, you’re learning the ins and outs of the business, making some money, and finding deals for yourself at the same time. It’s a great way to maximize your real estate education.
Give More Options to Sellers
If you’re going to go this route, disclosure is important, but don’t worry, being a Realtor doesn’t mean you’re automatically counted out on a deal. The ability to either offer a cash offer or pivot and offer to sell it for them and earn the commission on it gives you powerful leverage in any situation. They want to sell, and you have more than one way to make that happen.
A lot of traditional brokerages shy away from offering a Realtor who can sell or buy a house themselves because they don’t want to get in the middle of that. But as Travis has found in his own brokerage firm, as long as you disclose that you’re there representing yourself and that you have a Realtor’s license, you’re going to keep things honest and aboveboard.
Not every seller wants to accept a cash price or investor’s price, and the ability to pivot into then offering to sell it for them at the retail price let’s you keep that lead that you worked so hard to find. You’ve already built that relationship with them. You’re already in their living room talking to them, so if they don’t want a cash price, you can turn around and offer to list it on the MLS for them.
Double the Impact of Your Marketing Dollars
No matter which side of the equation you fall on, marketing is going to take up a huge portion of your time and money. When you can be both a Realtor and an investor, you can stretch your marketing dollars further.
Some of Travis’s favorite marketing techniques are:
- Driving for dollars
- Looking for homes that were bought more than 2 years ago
- Finding homes listed with an LLC
- Searching out property owners who’ve owned it more than 15-20 years
When I was really prospecting for wholesaling deals, we sent a lot of postcards, but we always followed up on the postcards with a phone call. It was pretty common that a seller would tell us that they had a stack of postcards just like ours, but we were the only buyers who picked up the phone for some personal contact. And we found that the best time to call was Monday night and every Friday afternoon. You didn’t have to be on the phone every day; just focus on those prime times.
One of the things I really love about this business is how many different ways you can do it. When you walk into Mitchell’s Ice Cream in Strongsville, Ohio, there are so many different flavors and you don’t even know which one you’re going to love. So you try a few to find your favorite flavor.
You may not know what kind of real estate you’re going to love, but if you try out a few different avenues, you’ll figure it out. No one I know is doing the same kind of real estate that they started out in, but that’s because they found something they loved more or they adapted to the market.
If you’re a Realtor now, and you’re thinking about jumping into the investing side of business, do it! If you’re an investor and you want to offer more options to your sellers, get your real estate license and expand your business model. Working on both sides of the business gives you even more opportunities, and why would you want to pass that up?