RISMedia's Real Estate Magazine

APR 2012

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

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REAL ESTATE Business Building Investors Are Busy— and You Can Help Them by Margaret Kelly R esponsible investors have a major role to play in the real estate recovery—and it could be even greater. Unfortunately, lenders and policymakers seem more focused on the recklessness of fix-and-flippers during the boom times than on the positive aspects of encouraging sound investment right now. Despite restrictive lending and chal- lenging rules, investors are the prime force moving distressed prop- erties off the market. The clearing of this inventory is a vital step—it could take another two or three years— and rules that make it easier are surely worth considering. Many of today's investors are nor- mal people buying a home or two as rental properties. In many ways, their actions benefit everyone, bringing us all closer to a healthy industry. By providing professional assistance to these investors, we can take part in this process as well. What They're Up To Investors currently make up about 24 percent of U.S. residential buy- ers. That's up from a steady pre- 2011 level of under 20 percent. What's more, because nearly 77 percent of investor transactions are cash, today's historically low interest rates aren't driving the upward surge in activity. That tells you something about the confidence investors have at this point. And it's not just the old pros. First- time investors are catching on, too; some of them are so sure of the market that they're buying proper- ties with their IRAs; when they sell 52 April 2012 RISMedia's REAL ESTATE Where You Come In I can't say it enough: Training is es- sential to success in real estate. And that's especially true when work- ing with investors. You need to un- derstand the process and be able to demonstrate the value you bring. To learn more, consider the repu- table training and resources offered by groups such as the Charfen Insti- tute, whose Certified Investor Agent Specialist designation has empow- ered thousands of agents to work in this sector. Another solid option: the OwnAmerica program, which offers an amazing number of strategies and innovative ideas. These types of courses teach you the language of real estate invest- ment. They also get you thinking about how to market to investors, which is vital. later, the profits will stay tax free in the IRAs. In many cases, investors are buy- ing structures no one else wants, particularly damaged REOs. Accord- ing to a practitioner survey by Camp- bell Communications, investors are involved in 60 percent of sales of damaged REOs. Why? Because they have the capital to restore these blighted properties and turn them into rentals. In contrast, investors are involved in less than 30 percent of sales of move-in-ready REOs, a favorite of first-time homebuyers (more than 40 percent). In other words, investors aren't generally snapping up proper- ties that are better suited as owner- occupant. Within the distressed property space, investors are already accom- plishing a lot—with very little sup- port; imagine what they could do with more. The teaming of investors and real estate agents isn't a new concept, but because many investors built their portfolios without the help of an agent, there's a bit of resistance in play. That said, more and more inves- tors are looking for skilled, trustwor- thy advocates to be their eyes and ears in the hunt for good properties. So the smart move is to get the training, learn the mindset and let investors know they can count on you. And as you help them turn dis- tressed properties back into homes, you'll be doing more good than you realize. RE Margaret Kelly (CRB) is chief executive officer of RE/MAX, LLC. RE/MAX earned "Highest Overall Sat- isfaction For Home Sellers and Home Buyers Among National Full Service Real Estate Firms" in the J.D. Power and Associates 2011 Home Buyer/Seller StudySM. For more information, visit remax.com.

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