The Four Qualifying Questions Realtors MUST Ask New Investor Clients


Realtors, many of us are leaving opportunities for repeat transactions, additional income, and priceless wealth-building lessons if we aren’t working with investors! If you are interested in working with more investors, read below to learn the four MUST-ASK questions to review with new investor clients before you start working with them. If you aren’t interested in working with investors, I invite you to read at least the next section and reconsider. 😀


Why Work with Investors? 

Working with investor clients can be incredibly rewarding for several reasons:

  • Repeat Business: Investors purchase multiple properties, which means more transactions and ongoing business for you as a Realtor. Where the average consumer stays in their home for 10 years, experienced investors will usually transact at least once/year, if not more! 
  • Less Emotionality: Investors typically approach real estate transactions more pragmatically, focusing on the numbers and potential returns, making the process more straightforward and oftentimes less dramatic.
  • Hedge Your Income Risk: During down markets (usually marked by recessions), there are fewer consumer transactions. However, investors come out of the woodwork seeking opportunities in down markets and can be a great source of business in leaner times. 
  • Learning Opportunities: As you work with investor clients, you can learn a great deal about various investment strategies, property types, and most importantly – building wealth through real estate – which can benefit your career and your personal finances.


So hopefully you’re excited about working with investors. We work with a lot of investors at The Chabris Group, and it gives our agents a more steady flow of business. 

In this blog post, I’m going to break down the four qualification questions you MUST ASK every prospective investor client. I’ll also explain why they’re important in identifying legitimate investors who are ready to take action. Let’s dive in!


Question #1: “Are you looking for cash flow or equity?”

The first question you want to ask prospective investors is whether they are looking for monthly cash flow to be generated by the asset (cash flow) or if they are more interested in holding onto the asset so that it increases in equity over time (capital appreciation). This question helps you understand their investment goals and strategies, enabling you to tailor your property suggestions accordingly. 

Some people will say just one or the other, while most will say some sort of blend. If they don’t know how to answer this question, that’s a red flag; they may not be legitimate investors that are ready to take action. Be prepared to dig a little deeper into what their preferred blend means to them to get a clearer picture of their investment strategy.


Question #2: “Are you looking for a turnkey investment or a value-add?”

The next question to ask is whether they are looking for a turnkey investment or a value-add investment. A turnkey investment is an asset that is already performing well and requires minimal effort on the part of the investor. On the other hand, a value-add investment is an asset that isn’t performing as well as it could but has the potential to be improved with additional time, money, and effort. Some investors like to take the additional risk and invest that additional time, money, and effort to get a better return on their investment. 

This question helps you gauge the level of involvement your prospective investor clients are willing to take on and whether they’re looking for an easy, hands-off investment or if they’re interested in tackling projects that may require more work. If they don’t know the answer, be cautious, as they may not be qualified investors. This is another red flag.


Question #3: “What’s your source of capital?”

Do not feel awkward asking this question!! This question is critical to know how your new investor client plans to pay for the right asset. Is it cash? Are they doing hard money lending? Are they pre-approved for a loan or do they have a line of credit in place? By asking this question, you can ensure that they have their capital lined up and secured before you start showing properties. It can be frustrating to do the work and realize your new investor client can’t perform when the time comes. It can also be embarrassing if you are working with a co-op on a potential sale and it comes to light that your client can’t move forward as they don’t have the capital. 

Additionally, in a competitive market like the one we find ourselves in here in 2023, you want to make sure your clients are financially prepared to act quickly on opportunities that present themselves. Understanding their financial situation can also give you an idea of the types of properties they can afford and prevent you from wasting time showing them assets that are out of their budget.

And if they can’t answer this question – you guessed it – it’s a big red flag! 


Question #4: “What’s your timeline?”

The last question you should ask is about the investor’s timeline. You can use the question above. O, to phrase this question more effectively, ask, “When I find you the right opportunity, when will you be ready to take action?” This question helps you determine whether your clients are serious about investing or if they are simply collecting information without any intention of taking action. I’ve been there before … it’s frustrating. It’s also important to keep in mind that some investors may have a more flexible timeline, while others will be eager to invest as soon as possible. Knowing their timeline will help you prioritize your efforts and focus on clients who are ready to take action.


Pre-qualifying Your New Investor Clients

Asking these four essential qualifying questions will help you identify legitimate investors who are ready to take action, thereby saving you time and effort. By understanding their investment goals, strategies, source of capital, and timelines, you can tailor your services to those that are ready to take action, and ultimately achieve greater success in your real estate career.

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