When meeting with new clients, a question often comes up: “How do I know that my Realtor is not keeping all the good deals for himself?”. The answer to that question depends upon your Realtor and their trustworthiness and motives, but generally I believe most Realtors are excited and anxious to find/give their clients the best deals out there before taking any for themselves. Every investor, even a Realtor that is an investor, is in a different buying cycle. Rarely is an investor buying constantly and buying everything they believe is a good deal. There is typically a limit to an investor’s time, cash, and credit.
- Time-Whether doing a flip or a bringing on a new rental, each property can take time to absorb and acclimate to your portfolio. While many seasoned investors could take on several properties at once, most people are not geared up to take on several each month for many months.
- Cash-Buying new properties often require some outlay of cash for earnest money, down-payment, or closing costs. As much as we would like it to be so, typically an investor does not have an unlimited supply of cash.
- Credit-Many traditional lenders will frown on rapid acquisition of multiple properties in a short time. They like to see the properties “seasoned” before lending more money. Often, your credit score will also take a dip immediately after the purchase until your credit adjusts to the new mortgage on your credit report.
Buying investment property is typically a long-term investment strategy that yields only relatively small amounts of monthly cash flow. Practically speaking….your Realtor needs commissions to pay his bills, put food on his table, and to buy his own investment property. If you have a concern about your Realtor and their investment strategy and timing, ask them. I am sure you will find your concerns will be calmed.