Real Estate Investing
FREE BOOK – 24hr Info #: 859-554-3388
"How To Make Money In Your Local Real Estate Market"
Today's Article: "Skill Sets of the Real Estate Investor: Communication and Examination"
As a real estate investor, it is imperative that you recognize and respect that your knowledge of the business makes you fairly unique. Most of your clients and many of your peers will not have the same knowledge as you and you need to be ready to properly explain things in so-called ‘layman’s terms’ or third grade English, so that you communicate effectively with everyone. Never assume, for example, that a client understands the foreclosure process in your area or that another investor speaks the language of real estate investing as you do. This approach will generally serve you well.
Here are four tips to help you communicate more clearly:
1. Ask probing questions that presume the client or peer knows what you are talking about. This way, you’ll avoid unnecessarily patronizing them if they are more knowledgeable.
2. Welcome feedback so, if a client or peer is not up to speed with what you are talking about, they’ll feel comfortable asking you questions.
3. Use analogies to explain concepts to draw parallels between real estate and things a client may be more familiar with.
4. Avoid terms that might confuse or scare away your client.
For example, instead of saying Contract or Purchase and Sales Agreement, say, “this is the piece of paper that says you are selling the home and I am buying it.”
Instead of saying this is the Deed, say, “this is the piece of paper which transfers ownership in the property from you to me.”
Instead of asking a seller if they will Owner Finance for you, say, “Will you allow me to make payments to you for the house.”?
By following these tips, you’ll be more effective as a communicator. When you can effectively communicate your business, you will be seen as more convincing because part of effective communication is making sure the other party knows and understands what you are talking about.
Ability to Eyeball Properties
What I call ‘eyeballing properties’ is something of a two-headed skill set for the real estate investor. Part one of the skill is to be able to see potential where others may not. Have you ever driven past a property and found yourself making a judgment about whether it was occupied, or had income potential? This premature judgment of a property’s potential has likely cost hundreds of investors the chance to secure a great deal, and usually without them ever realizing it. Look at everything as having potential. This may seem pretty basic but it is a skill because most investors have to train themselves to look at properties this liberally. Trust me, do what you have to do, don’t prejudge, and you’ll enjoy more opportunities.
Part two of this skill set is to be able to quickly evaluate the condition of a particular property. Many new investors will downplay their ability to assess a property’s flaws (and necessary improvements) and this is not as hard as you might think. First, you should have a contractor on your team who can back you up during your due diligence period. Second, it’s not hard to take a trip to the hardware store and price out different things that you may need to do to renovate properties. Between these two things, you can quickly develop the skill to estimate repairs (even if it’s only a crude estimate) and this skill will give tremendous confidence.