Real Estate Agent or Real Estate Investor? Discover If You Should Be Both

Let's break down the differences and similarities between real estate investors and agents. People often get them confused, but the line between the two is becoming blurred.

By the end of this article you'll understand the difference between the two and if you could actually be both...what's known as a #HybridInvestorAgent

What is a real estate agent?

Let's start with the definition of a real estate agent. Typically real estate agents spend time helping people buy and sell properties. They work for a client who is usually a homeowner looking to buy or sell.

Agents may also be working for investors who are looking for investment properties to buy and keep or sometimes to Buy, Fix & Flip. The main reason people become real estate agents typically is to build a career in real estate.

As a full-time real estate investor for almost two decades and a licensed agent then broker in the state of #Michigan for about a dozen years. I am personally a Hybrid because I do both sides of the business (investment and retail).

What is a real estate investor?

A real estate investor is someone who buys and holds property or buys fixes and sells property. People seem to get the definition of investor and agent mixed up Investors are always working for themselves where agents are supposed to be working for the benefit of someone else. Now, as a Hybrid Investor Agent you can work for yourself as an agent, but represent yourself as an investor.

The markets and locals laws are starting to indicate the future of real estate entrepreneurs are just that they aren't going to be just agents. They aren't going to be only be investors...they'll going to be a mix of both,

Here comes the #HYBRIDS!

In recent years there's been a blending ending of both real estate agents and investors because of the foreclosure boom of the mid 2,000's. For many years there was a brick wall between investors and agents.

Agents disliked investors because they stole their deals and investors dislike because they stole their deals. Instead of arguing with each other and being opposed during the foreclosure boom mostly agents had to learn to work with investor and in turn, most investors had to learn to work with agents.

It only made sense that most investors who were around back then got their real estate license or they hired someone to work specifically for them who had their license, because there are so many advantages to having a real estate license which we'll discuss below.

Investors typically like to buy off market properties. In certain situations, investors can buy properties on the market and still find opportunities.

Typically investors like to buy properties from off market sources. Ove properties become available to the open market they are thought to be less desirable to investors.

One of the biggest similarities between real estate agents and real estate investors is they both work directly with sellers to either list or buy their property.

The difference between real estate agents and investors

Where they differ is investors take much bigger risks then agents do, but they also have a chance at bigger rewards. However, recently that line is becoming blurred because the cost of the average home in the United States is somewhere around $275,000. So if you look at a typical real estate commission of 3% on that $275,000 the agent will earn somewhere in the ballpark of $8,250!

Sometimes investors may not make a profit that large! However, since real estate investors take the bigger risks they usually get a bigger piece of the pie.

Real estate agents usually take smaller risks because they are looking to help someone find a property. Or there are hoping to list a property and bring it to market. So they don't have to buy it, fix it & sell it. They don't have to pay up closing costs or borrow money.

They do have to spend time marketing themselves, whether it's from their own actions or through advertising. There's many different ways realtors can get listings or find buyers, but they aren't usually spending hundreds of thousands of dollars to do so just to get one buyer like a real estate investor is just to make one profit.

What responsibilities do Hybrid Investor Agents have?

Buying from private sellers as an investor is big responsibility whether you're licensed or not. As non-business people or at least non-real estate people they will need hand holding and education. Where this can hurt real estate investors is if they don't have a license and people can't find out where you're your office is or find you on the internet. They can start to get a little bit nervous.

In today's world of smartphones and the ability to Google someone in half a second. It's helpful to your business an investor to have information on the internet about you. Potential sellers, buyers & clients are going to look you up. When an investor has a real estate license. Many times it puts the sellers or buyers at ease because they believe that you've had to go through a little bit of training to perform what you're talking about doing with them.

Licensed agents or licensed investor agents are always going to do a better job but initial perception is important.

How to make prospects love the fact that you are a licensed investor agent

Personally I love to tell sellers or clients that I'm a licensed broker in the state of Michigan. It tends to make them more calm when it comes time to talk about the difficult situations that they have to talk about when about when selling property?

If you're an active investor and you don't have your real estate license, when you do talk to prospects have you ever been in a situation where they're is a little apprehensive to do business with you because they don't quite know who you are?

If they were able to Google you, saw that you had and your real estate license, and you were listed on the roster at a brokerage on their on their website, maybe they would feel more calm.

As a licensed agent investor you can use this as a benefit when you speak with privacy sellers by explaining to them that I've been in the business for a specific amount of time they could verify by how old your license is. Then you can explain to them that because you have your real estate license, you're held to a much higher standard than someone who's unlicensed.

You should strive to show them that you're much more professional because perception is very, very important. Initially, when you start doing business with someone now there are certain legal responsibilities that you'll have as a Hybrid investor agent.

What you have to disclose to prospects

You have to disclose to buyers and sellers that you have your real estate license. When you explain it the properly and show prospects that it's a benefit and an advantage to them they're going to feel more comfortable with you.

Being upfront and transparent will help you build rapport and prove to them early on that you are trustworthy. In today's world of scams and ID theft people are very nervous to give out their information and who they can trust. Even if you sound like you know what you're talking about having proves credibility will always help you in business.

Remember, as an agent or investor when you do business with someone you have a lot of responsibility. Your prospect or client always comes first, then anyone else who can be impacted negatively by your actions and finally yourself. If you make a mistake or purposely hurt someone regardless if you're a licensed agent or not you can find yourself in legal trouble. Always consult a licensed real estate attorney before engaging in any business deal.

Having your real estate license is almost always an advantage

When you have a real estate license again is another advantage because it shows buyers, sellers & client that you are supposedly a lawful person, and that you've been vetted by the state you're licensed in. it's unlikely that you're a felon whose been convicted of fraud. If you do commit fraud and you are licensed there's a very good chance that you're going to lose your license and everybody can find out about that. Again the fact that you are licensed again is another huge advantage for your prospects.

If you're a real estate investor and you do not possess your real estate license, why not? You'll have more opportunities open to you, it gives you credibility so your prospects will feel more comfortable doing business with you and finally the state you are in may require it soon anyway.

Are you a Hybrid Agent? Not sure? Take my 11 Question Quiz that will help you decide if being a Hybrid Investor Agent is right for you https://bit.ly/Hybrid-QUIZ

If you'd like to explore the idea of becoming a Hybrid Investor Agent you can register for the Hybrid Agent Academy. In this free 6 week master class we deep dive into how to become a Hybrid investor agent, why it's the wave of the future and you'll leave the exact blueprint on how you can start your business.h

If you already consider yourself a Hybrid Agent and want to add rocket fuel to your business check out The Hybrid Mastermind. It's a nationwide deal coaching community where I help investor agents maximize every lead they come in contact with.