Author: Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.
To become a real estate broker, the very first requirement is a passion for real estate investing. As a broker, you’re often the link between a property that’s waiting to be plucked and a buyer with big plans. The process of closing the gap between the two involves a careful strategy that ties together everything from a client’s expectations, to the financing opportunities that are possible. There is a real art to helping to put together a tidy, thorough transaction that allows your client to walk away feeling like they got what they wanted.
What it takes to become a broker for real estate investors
You essentially need to be a people person if you’re planning to become a broker. Yes, it may appear that you’re getting into the “property” business when you deal with buying and selling homes all day. However, the reality is that you’re really in the people business because so much of what you provide gives your clients confidence, peace of mind, and the tools needed to move forward with a deal they can feel good about.
As a broker, you are a resource. There is availability of so many do-it-yourself tools for both first-time and seasoned investors, so you need to position yourself as a professional who offers exclusive perks in order to thrive in your niche. This often means getting connected with exclusive funding resources or providing specialized services that make what you offer worth every penny to investors who might otherwise be tempted to “go it alone.”
Brokers are communicators
A big part of the “people skills” needed by a broker will be focused on communication skills. Of course, knowing how to create and maintain open, productive lines of communication with clients will be vital. You’re going to be explaining some very complex and nuanced details to your clients as you move forward with taking care of what’s needed for things like crafting a successful closing or obtaining financing. You may even have to be the one who delivers less-than-ideal news whenever hiccups pop up in the process.
However, it goes so much deeper than that. Brokers are often the “lifeline”, bringing together all of the vital players in a transaction. This includes other brokers, sales agents, lawyers, and direct financing sources for your clients.
Brokers are self-starters
Generally, brokers work independently. That doesn’t mean that they work alone by any stretch. In fact, an effective broker is actually a master at building a network of contacts, associates, and supporters. You really need to be willing to put in the “front” work as a broker because lots of creativity and patience are required when attracting new clients or initiating new strategic partnerships.
Brokers also need to work through every detail of the closing process. This often includes being the negotiator and “talking head” on behalf of their clients. Many brokers also employ other people. That means knowing how to find and manage employees effectively. A broker is also a professional who is always on the hunt to provide clients with the latest and best channels and resources for getting what they want out of deals. Primarily, your focus is on connecting clients with funding resources that make investment deals both possible and advantageous beyond a client’s wildest dreams.
Bringing existing skills to the next level
Many people consider a broker to be a next-level real estate agent. In fact, many agents find that becoming a broker is the next step to graduate to when they’re looking to expand their professional horizons. The reality is that brokers are really in a league of their own when it comes to being able to provide so many different resources for things related to funding and guidance.
Much of the technical aspect of becoming a broker is going to depend on the state-specific requirements that are in place where you work. You must be licensed by your state to be a broker. The typical trajectory involves working as a real estate agent for a few years after obtaining your real estate license. It’s possible that your state requires anywhere from one to three years of experience as a real estate agent before allowing professionals to make the leap to broker.
There is also typically a training course that must be completed based on the standards set by your state. Broker training courses will cover all essential topics that you’ll be dealing with in your path as a broker. This often includes topics like contracts, property management, and real estate law. A broker training course usually requires a few intense weeks of focus before it is complete. It’s also likely that your state requires all potential brokers to pass criminal background checks before they can be granted licenses.
First steps to take to get started
The big thing to remember is that only state-specific information is going to be relevant when it comes to learning about the path to becoming licensed. Some states may not require a license if you are brokering hard money loans that are non-owner occupied investment properties. Depending on the type of investments—like brokers who handle hard money loans–you might be able to work successfully in the industry without licensure.
Either way, each state has its own requirements and regulations regarding brokers. The best thing to do is simply search for your state’s online portal for real estate agents and brokers. You will likely find a robust compilation of information and documents covering course requirements, qualifying prerequisites, and content outlines for broker examinations. In addition, you will almost certainly be able to download your state’s broker exam application. Only trust information about broker licensing from official state sources.
We’ve covered what you need to know about the “technical” aspect of how to become a real estate broker. Coming out on the other side of completing your broker exam will place you in the position to walk into a new career space that’s all your own. That can be both very freeing and very overwhelming. As a broker, your success comes down to your ability to attract new clients, retain repeat clients and gain recommendations by exceeding expectations. There are some ways to do this very elegantly.
Getting volume as a new real estate investing broker
What’s the secret to becoming a high-volume real estate broker? The simple answer is to be the best. A broker becomes the best by offering a one-on-one touch while providing dynamic and exclusive resources and options for financing, negotiating, and more.
A big part of being able to offer your clients the best comes down to your ability and willingness to enter into strategic partnerships with other firms and companies that orbit your industry. This often includes making sure you can facilitate access to highly flexible, innovative financing options. In fact, providing intriguing, convenient financing options that put the goals of your clients a little bit closer in reach can often be the deciding factor for buyers and property investors when selecting brokers. We’ll cover more on how to position yourself to be a resource and avenue for innovative, flexible, and fast financing in just a moment. First, we’ll explore some of the marketing essentials that are connected to the task of building momentum as a new broker.
Building your client base
Yes, it’s going to be important to take steps to build those industry relationships straight out of the gate. In addition, you’re going to need to invest some time, energy, and capital into getting your name out there for potential clients to see. You really need to get “into the community” if you want to become a respected, recognized broker in a specific market. There are a few ways to do this.
Many become brokers precisely because they want to be independent. Of course, taking that first step on your own can feel a bit like jumping out of a plane without a parachute. Many of the platforms, connections, and resources that you were used to using while operating under the tent of a larger agency or firm may no longer be available. That means you need to focus on building up your own tent of resources. The first order of business when trying to become an established broker is to have a professional website built.
A broker’s website can be pretty concise. In fact, a website should essentially be thought of as a funnel for leads. This is where prospective clients can contact you directly. However, be prepared for the fact that the content you place on your website will activate a “snap” value call for all who visit that cannot be undone. That means that it’s important to select a professional, uncomplicated layout that clearly states the services you offer. The content you select for your website should inspire potential clients to ultimately reach out to learn more about what you can do for them.
Don’t skip social media
Being a “friendly face” on social media is a great opportunity for generating leads. This isn’t necessarily a platform for being “salesy” or “pushy.” It is a place for cultivating a presence that is authoritative, approachable and always happy to share the best information and “insider” tips.
What you’re really attempting to do with social media is position yourself to become “the trusted expert” that people know and recognize. That means that you will be at the forefront of people’s minds when the time comes to ask a broker a question. The goal isn’t to turn every post into a pitch. It is simply to provide compelling content that will have clients approaching you before they go to anyone else when the time comes to seek advice.
One key to really dominating on social media as a broker is to always look like you’re having a good time. That means that you’re enthusiastic about the properties you’re showcasing, the people you’re helping and the community you operate in! This makes investors want to join you.
Answer the questions that people want answered
Many people are interested in entering the property world for the first time with something like a fix-and-flip property because they’re inspired by what they’ve seen done television or by people they know in real life. Many who would like to purchase investment properties begin the process with “stars in their eyes.” However, they don’t actually know much about the nitty-gritty, serious aspects of making offers and obtaining financing. They are hungry to be fed this information by a reliable, approachable broker who understands the nuances of the investment world. This is one of the reasons why approaching your role as a broker with a “teaching” attitude can be so beneficial.
What does it mean to be a broker with a “teaching” attitude? It means that you’re enthusiastic and eager about dispersing the information you’ve learned through your many years of experience and training. You’re practically spilling over with enthusiasm when it comes to helping people learn what they need to know in order to begin making money as property investors. This can often be a much more effective approach than being a broker with a “pitch” mentality.
One of the ways to engage potential clients while establishing your role as an approachable expert with the answers is through question-and-answer sessions. Hopping on social media with some quick tips for people searching for investment properties is always a great place to start. In addition, you may want to introduce live “Q&A sessions” to your audience once you amass a healthy number of followers.
In addition, blog posts that answer common questions or region-specific questions can be great for attracting new followers and clients. Getting some outside help for creating videos, graphics and infographics is often a great idea as you work to establish a “brand identity” as a broker.
Offer what others can’t or don’t
Enough cannot be said about offering your clients value-added features and services. No aspect of broker services is as important as speedy financing. People seeking to make offers on investment properties don’t usually have time on their side. That means you’ll be dealing with lots of “impatient” clients looking to beat other investors to the punch. This is why it’s essential to have access to fast loan pricing. Working with a lending platform that gives you exclusive access to pre-qualification information and pricing in minutes is a value-added feature that can distinguish one broker from all others. Clients won’t feel like you’re giving them the runaround if you can let them know whether or not a deal can be done right away.
Getting preliminary answers regarding financing answered quickly isn’t where it ends. It’s also important to have a system in place that allows clients to get to closing quickly. Being able to offer clients a path to closing that takes as little as five to 15 days places you in a very special category as a broker.
Brokers who deal primarily with investments need a very specialized toolkit. That means being able to provide lending options that take into account things like rehab costs, fix-and-flip terms and lightning-fast offers. Unfortunately, waiting for the traditional mortgage process to get done could cause an investor in a hot market to completely lose out on a big opportunity. Make sure you’re providing access to lighting-fast funding options that are also completely vetted and credible. Providing financing through a platform that offers funding for up to 100 percent of renovation costs is also an intelligent strategic move if your goal is to become the local go-to niche broker for property investors and fix-and-flip buyers. In fact, your status as a channel to flexible, fast financing has the potential to make you a standout broker in your market.
Innovative brokers provide innovative financing resources
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In addition to offering competitive pricing and rates, we also offer products that are geared for fix-and-flip investors. Explore the perks of helping to make the dream of flipping houses real for your clients with LendingHome’s innovative platform.
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Disclaimer: The above is provided for informational purposes only and should not be considered tax, savings, financial, or legal advice. All information shown here is for illustrative purpose only. All views and opinions expressed in this post belong to the author. NMLS ID: 1125207 Terms, Privacy, and Disclosures. Copyright LendingHome Corporation 2020.