Real estate investor clients are different from owner-occupant buyers. They don't fall in love with kitchens. They fall in love with numbers. If you can speak their language, find deals and move fast, one investor can be worth a dozen transactions over a few years. Here's how I teach agents to serve investors without overpromising.
The short answer
Find out the investor's strategy first: long-term rental, short-term rental, fix-and-flip, house hack, or land. Then build every search and every conversation around their numbers: price, rent, expenses, repairs, financing and exit. Do the property-specific checks investors care about: zoning, rental rules, permits, HOA rental limits, and condition. Bring them deals, show your math, and let them decide.
Step by step
- Run an investor consult. Strategy, budget, cash available, financing type, target areas, property types, and their deal criteria. What does a "yes" deal look like?
- Set up a tight search. Price, property type, condition keywords, days on market. Investors like price drops and stale listings.
- Learn the rental math. Gross rent, vacancy, taxes, insurance, HOA, maintenance, management, and the loan payment. Investors check your numbers, so be accurate.
- Verify rent, don't guess. Pull comparable rentals. Note unit count and condition.
- Check the rules. Zoning and legal unit count, HOA rental caps, city rental licensing, and short-term rental rules. See short-term rental rules.
- Check the property. Permit history, unpermitted units, foundation, sewer, roof and big systems. See sewer scope.
- Know the deal sources. MLS, bank-owned, HUD after the owner-occupant period, auctions, and off-market. See REO vs HUD vs short sale.
- Write fast, clean offers. Investors often pay cash or use quick financing. Short deadlines help.
- Think about the exit. If they sell later, a 1031 exchange may matter.
A worked example (illustration only)
| Item | Monthly |
|---|---|
| Rent | $2,400 |
| Vacancy and repairs reserve | -$240 |
| Taxes and insurance | -$400 |
| HOA | $0 |
| Management | -$200 |
| Net before loan | $1,560 |
Illustration only. Numbers are made up to show the format. A lender sets loan terms. The annual percentage rate (APR) would differ from any note rate. This is not an offer of credit or an investment recommendation.
How to explain it to your client
"Tell me what a good deal looks like to you, in numbers. Price range, rent you need, how much repair work you'll take on. I'll send only homes that fit, and for each one I'll show rent comps, taxes, HOA rules and any rental limits. You decide if the numbers work. I'll make sure the facts are right."
Watch-outs
- No investment advice. You can share facts and math. Don't promise returns or appreciation.
- "Looks like a duplex" isn't a duplex. Verify legal unit count and permits.
- Rental rules change. Check city and HOA rules for every property.
- Fair housing applies to investors too. Don't help any client screen tenants or pick areas based on protected classes.
- Tax questions go to a CPA.
Further reading
- Real estate investing in Colorado on kennarealestate.com
- Rental property checklist on kennarealestate.com
This is training for real estate agents. It isn't legal, tax, investment or lending advice. Check with your managing broker.
Questions
What's the first question to ask an investor?
"What's your strategy, and what numbers make a deal a yes?"
Should I run cash flow for my investor?
You can show facts and simple math. The investor and their advisors decide.
Can investors buy HUD homes?
Yes, after the owner-occupant bid period. See HUD bid periods.
Where do investors find deals?
MLS price drops, bank-owned homes, HUD homes, auctions, and off-market leads.
How do I keep investors coming back?
Be fast, be accurate and be honest when a deal doesn't pencil. Investors remember the agent who saved them from a bad buy as much as the one who found a good one.
Do investor deals need inspections?
Yes. Repairs drive the numbers.
Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.