Last Updated 8-17-2018
If you’re currently active in the real estate market, whether you’re an experienced investor or a newbie searching for your first deal, you can relate with the fact that it is becoming more and more challenging to find deals that meet your investment criteria and return goals.
A great approach to generating leads in a hot market is to partner with a local real estate mentor brokerage (here’s my ultimate guide for finding a broker). But not just any brokerage. Due to the nature of the current real estate market, to maximize your chances of receiving high-quality deals, you should aim to partner with the number one brokerage in your market. Someone who has an established track record and a market strategy that locates the best deals in the market.
Samer Kuraishi, a broker who manages a team of over 40 agents and has done over $800 million in sales since 2012, is the type of broker you want to partner with. Samer and his team have ranked number one in the extremely competitive Washington, DC market for four years in a row. In our recent conversation, he explained how he qualifies interested investors who want to leverage his team to find deals.
When interviewing a broker, regardless of the current market conditions, it is important to realize that the ensuing relationship will be reciprocal. Typically, they are interviewing you as much as you are interviewing them. However, when you are pursuing a relationship with the number one broker in the market, the pendulum swings more to the side of the broker interviewing you. Therefore, with Samer being such a high caliber broker, his investor qualification process can give you a clear understanding of the types of questions you should be prepared to answer when asking for a top broker’s business.
Here are the five main questions he asks when qualifying a potential investor as a client.
Question #1 – Have you completed a deal before?
Samer said, “my first question is ‘have you ever done this before?’ You want to kind of gauge who you’re dealing with. Everybody wants to be an investor, everyone watches the HGTV shows and everyone wants to make some type of money.”
If you haven’t done a deal before, you will probably have an issue working with the number one broker in the market. You may be able offset your lack of experience by leveraging the expertise of your team – property manager, mentor/advisors, etc. – and their past business success or by following the advice I outlined in my blog post about how to win over an experienced real estate broker. However, don’t be surprised if your lack of experience is a disqualifying factor in the eyes of the number of broker.
If you lack experience, a good place to start is to follow the advice I outlined in two blog posts How a Wannabe or Experienced Investor Can Obtain a FREE or PAID Real Estate Education and Two Ways to Gain Direct Knowledge From Experienced Investors for FREE
Questions #2 – Can you send me examples of what you’ve done?
For investors who’ve completed a deal, Samer said, “I usually ask them to send me some of [their] properties. ‘Can you show me examples of what you’ve done? What did you buy that for? What did you end up making? Were you happy with that investment?’ Because you have to understand what they are used to.”
Since you know these questions are coming, you should proactively address them prior to meeting with the broker. Review the numbers on your previous deals to refresh your memory, or – even better – create a print out that shows the outcome of your deals.
Question #3 – Do you understand the market?
Samer also wants to know the investor’s knowledge of the market. He said he’ll ask, “Do they even understand this market, or are they coming from a different city that’s across the county and they’re coming here? Do they even understand the price points?”
The number one broker in the market doesn’t have an interest or the time to educate you on the market. Therefore, performing a market evaluation, and maybe even preparing a market summary, is advised.
Questions #4 – How would you finance a potential deal?
Additionally, Samer will question an investor about their financing situation. “Is it your money that you’re deal with? What type of financing are you doing? Are you getting a loan? Are you paying cash? If you’re paying cash, is it your capital?”
Ultimately, the number one broker will want to confirm that you are capable of financing a deal and that you are the main decision maker. They likely won’t have the patience to work with someone who can’t close or to play the game of telephone to reach the person who calls the shots.
Questions #5 – What are your goals?
Lastly, Samer wants to know about the investor’s goals. This includes their overarching vision, but also their deal criteria. For example, if an investor is looking for distressed properties, Samer wants to know if they have their own contractor and construction crew, or is that something they will be asking Samer to provide? Or, if they want to invest $500,000, do they have realistic expectations about the property type and size and returns from that sized investment?
If you want to find deals in a hot market, partner with the best brokerage in your market. However, unlike your typical broker conversation, the outcome depends heavily on your answers to their questions, rather than the other way around.
Samer Kuraishi, the number one broker in Washington, DC, asks these five questions when interviewing an investor who is interested in becoming a client:
- Have you completed a deal before?
- Can you send me examples of deals you’ve done?
- Do you understand the market?
- How would you finance a potential deal?
- What are your goals?
Expect these questions going into the interview and prepare accordingly.
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Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.