Establishing A Great Investor-Realtor Relationship To Increase Your Profits With Randy Zimnoch

Investors and realtors go hand in hand. They can profit very well together! That is why the need around the country right now is investor-friendly brokerages. Join Jeff Rutkowski as he sits down with real estate investor and investor-friendly broker, Randy Zimnoch. Listen as Randy shares what you should do when you get started in this space. Find out the importance of your investor license and how you can leverage it. Discover the power of education and why teaching others is important. Also, understand why investors and realtors need to work together! So go grab your license and start leveraging your knowledge today!

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Establishing A Great Investor-Realtor Relationship To Increase Your Profits With Randy Zimnoch

I am pumped. I have a good friend and expert real estate investor/realtor, Mr. Randy Zimnoch. We’re going to be diving deep and getting into how realtors and investors can profit together to grow their businesses at exponential rates. I’m excited about that. You’re going to love, Randy. He’s a great investor-friendly broker. He has been involved in over 350 residential home flips. He knows the business, understands our language and has walked in our shoes. He has over 1,600 transactions closed as a realtor between him and his team. He’s also one of our regular guest speakers on the show. For those of you in our community, you may see him from time to time at one of our boot camps all across the country. Years after bringing his brokerage underneath eXp, which he’s with now, he’s expanded from 40 agents to over 500.

You’re going to get a lot of value out of this show. Before I bring Randy up, we’re going to focus on the word of the week. Word of the week is listing commission. As a real estate investor or an average person going out there to buy or sell a home, the national average is a 5% to 6% commission if a realtor lists a house. That’s for the normal guy. If you’re an investor, we should not be paying anywhere close to 5% to 6% on our listing commission, but that is the national average.

When a real estate agent lists a property to put up for sale for a homeowner and investor, the listing commission, let’s call it at the high end of the average, which is 6%, if that house sells for $1 million, that’s $60,000 off the top that is going to the real estate agent. Depending on your price point, that could be big or smaller numbers.

How it works, if an agent lists a property for 6%, they’re going to cut that in half and offer 3% of that out to what they call a buyer’s agent. That listing agent puts the house up for sale, they market it, it’s on the MLS, all of these other channels and platforms, another agent brings the buyer and they’re going to split that.

If the listing agent finds the buyer themselves, they get to keep that 6% commission. I wanted to focus on that as a word of the week. A lot of what we’re going to be talking about is how as an investor, to keep as much of that in your pocket, also benefit from having your license alongside being an investor. If you like multiple streams of income, this show is for you. Let’s get into it.

Mr. Randy Zimnock, welcome to the show.

Thanks for having me, Jeff.

It’s good to be here. I feel like we haven’t chatted for a while. We lived in the same community then you moved up to that big fancy house on the golf course and you don’t call any more. What’s up with that?

Traffic. It worked during COVID, the Zooms and the calls. In-person is so much better, but I’m going to blame traffic.

You live in Southern California. Traffic is a legitimate excuse. I’ll give you a pass for that. It’s great to have you on the show. You bring a lot of credibility and value. Every time you come speak to our audience, it’s always well-received and always imparts a lot of knowledge. We’re going to get into some things. As I said in the opening, as investors read this, it will give other ways of making multiple streams of income and leveraging their real estate license.

Before we get into that, I went through your credentials. You’ve done hundreds of flips, thousands of real estate transactions. You have 500 realtors in your community. You’ve been around the block a few times, but what did Randy Zimnoch’s life look like before real estate? Where did you come from? How did you get here?

I knew from the beginning that I wanted to be an entrepreneur. Out of college, I started a cleaning service business, out of all things. It was to help my family because my family is immigrants. They don’t speak English very well. I want it to get them out of the very hard-working positions that they got, making minimum wage to being business owners.

That led me to start my own cleaning service business as a waiter. I hustled and opened up the cleaning business but gave business cards to customers at the restaurant. That led to 200 accounts of residential homes. I had 2 vans, 12 employees and then I became a driver full time from 7:00 AM to 7:00 PM. I share those with our audience that was good. It served me well, but I hit the ceiling and that business owned me. I didn’t own the business. I realized that three years in that I had no life. That’s what drove me to the next thing and real estate then became the answer.

You are an entrepreneur when you can leave your business for months and it’s still running.

What country did your parents immigrate from?

Poland.

That’s a common theme. We hear from business owners across the country, the business-owning them not owning the business. I can’t let that go. You got to give a tip around this. That’s not the case. You own the business. The business doesn’t own you. What are the fundamental shifts that you made to make that a reality?

Meeting Than Merrill for the first time, I remember walking into his office because I was an intern at CT Homes. I interned in my late twenties after I decided to change my career path from cleaning to real estate, not knowing anything. The first book that Than gave me was The E-Myth and that opened up my eyes to, “I don’t have to be a technician and everything that I do in my business.” That was it. Working from technician as fast as you can, to the manager, to an entrepreneur, which that term is loosely being used. To me, an entrepreneur is that you can leave your business for weeks, months and it’s still running and growing.

That’s a great book recommendation. If you’ve never read that book, Michael Gerber, The E-Myth, it’s an old book, but the principles are tried and true. It’s a common language around here. It’s something we all refer to.

Than even partnered with Michael and they wrote their version for real estate investors. If you’re going to pick one up, pick that one.

We fell in love with that. That book revolutionized the way Fortune Builders, CT Homes does business that we reached out connected with the original author, then Than Merrill and Paul Esajian rewrote the books specifically for real estate agents. Thanks for bringing that up. One of the things we’re going to talk about is how investors should be, in our opinion, leveraging their license to grow their investor business. That presupposes those investors should get a real estate license. Why should anybody investing in real estate also hold a real estate license as an agent?

There are 4 or 5 main reasons. Number one is access to the MLS. You can look at Zillow, Redfin and all the websites, but there’s nothing better than the MLS. I don’t even know that investors know this that there’s a part in the MLS listing that other agents are only seeing, Agent to Agent remarks. You know this, you were a realtor back in the day. MLS access is number one.

Number two is access to properties. Being a realtor, you’re legally allowed to go and look at properties. You don’t need to ask another realtor anymore. Then, access to a realtor network. Realtor events are happening all the time in every city. You can go even though your intentions might not be, “I’m here to sell real estate as a realtor,” you could use that license to get around realtors for your investing purposes. Then referrals, you can collect referrals which 25% is typical. If you have those types of leads, which we all will do when you’re in the real estate industry, why not collect 25% and do nothing? It’s all those commissions. Those are some of the four.

That’s the main reason I kept my license. That’s what I was talking about at the beginning of the show if you like multiple streams of income. JD and I talk about it. You’ve read some of the episodes, but the average investor will make 25 offers to get 1 offer accepted. You’ll find about 4 to 5 of those offers. They’re not willing to go as low as you need them to be a deal as an investor, but they are motivated to sell your house.

You pass that lead over to a realtor by having your license, and 25% I’m coming back to you. We’ll recommend maybe after 6 to 12 months max after being an investor, pull the trigger, get your license, you’ll be able to unlock a lot of things that we’re talking about here. What are some of the specific ways an investor should be leveraging their license to grow their real estate investing business?

One specific way that we did early on was when I moved here in 2010 and partnered with JD and Than at CT Homes. We didn’t know anybody. We couldn’t move our whole CT Homes business to San Diego. Everybody stayed there. Some employees, we’re able to convince because of sunny San Diego. The point here is that we have to start from scratch.

FBL 22 | Investor Realtor Relationship

Investor Realtor Relationship: Having an investor license means that you have access to MLS, properties, Realtor networks, and referrals.

 

I got my license in San Diego as well so did JD. What we did, and this was consistent, we would go to what we call caravans. Caravans is an old term used in the realtor industry where agents usually get together at 8:00 AM. Some sponsors will pay for their breakfast. They might come for food. They might come to pitch the listings that they have coming up or talk about the buyers they are about to start looking with and see if the realtors can do business with one another to spread the word amongst the community.

What I would do is I would go to those events because I was licensed. I was allowed to go inside those caravans. If you’re not, you can’t. I would get up the section where they said, “Anybody here that has a buyer that you want to mention?” I would raise my hand and be like, “I’m a buyer and I’m looking for the ugliest thing on the block. I don’t care if it’s fire damage or foundation issues. The worst it is, the better. That’s what I want. I’m a cash buyer. I would love for you to represent me if that’s what you have available coming up or maybe it’s listed.” I was able to speak to 50 to 100 agents in one room face to face. They were all potentially looking at me as their client.

Every week we did that consistently. We would get a deal. Since I’m a realtor, I will be listing my flip. Then they saw me in front of a room, pitching our listing. That’s when it became real to them and even more credible. “That’s the guy that comes all the time and raises his hand in the buyer section. He has one and he’s talking about the flip.” You have to do it consistently.

That’s powerful. You’re getting front for free. I remember those caravans when I started as a realtor as well, I wasn’t an investor at the time, but that’s right. You said something very important, “I’m a buyer. I’m looking for the ugliest house and I’m willing to let you represent me.” Why is that vital?

You mentioned commissions for the word of the week. Realtors work on commission. Most of the time, when they list the property and another agent brings the buyer, which means they’re going to make half of the commission. In this case, let’s use 5%. They’re going to make 2.5%. In this case, by me, letting them know, “You can represent me as a buyer’s agent.” They know they can make the additional 2.5%, which equals 5%. That’s a lot.

Week after week, how long did you do that for?

Years. The first two years, we were so consistent. One of the biggest acquisition channels for CT Homes is our realtor network. It became easier because the realtor network expanded and then we had people that we started doing business with. They start bringing our opportunities off-market, but you can’t stop those activities because the funnel will dry up.

It’s such a smart strategy and it should be a strategy of all investors. I don’t know what it is now, but pre-COVID was about 80% of all properties that sold across the country traded through the MLS with realtors. You’re going to get some great deals in your career off-market, but the majority should be coming from this funnel.

It’s free. We like free.

It’s your time. You’re paying a little bit of your time.

Maybe $5 or $10 for breakfast for the caravan.

You bring food to those caravans.

If you’re not licensed yet but want to get into caravan, sponsor it as the investor. Go and sponsor and feed the realtors. It’s not as effective because you don’t talk about the way I do it, but it could work.

The biggest need around the country is investor-friendly brokerages.

What else?

Another high level, outside of the first four points I mentioned. Once we started to get to know some of the realtors, the players, managers or brokerages, then we were like, “How do we leverage our time better and get in front of more agents instead of one at a time?” One thing we knew from having our brokerage is that agents want training. We were doing that for our own brokerage.

We approached other brokerage managers or brokers and said, “Would you guys be interested in having us come in and teach the agents how to work with investors? What are the benefits of working with investors?” There are always bad apples in any industry. “How do you identify someone that’s going to try to make a scam out of the situation and not make it an enjoyable experience for your client versus a good investor?

We did that for years. We would go and train, but we wouldn’t go there like, “Look at us. We’re the best investors in town.” We were educated on the keywords. What’s ARV? What’s the difference between hard money and private money? It’s Pure education. Reciprocity takes over. In the end, if they had a deal, they would think of us. That kept a compounding effect taking over.

I remember doing that myself back in old Milford, Connecticut doing that. You want to progress above one realtor at a time. One thing I love about agents is agents love to learn. They’re always craving training. The more an agent can speak the investor language, the more successful they’re going to be. You’re providing a valuable service to them. What else?

That’s funny you say that because the first listing agent that we hired, we walked in on an open house next to our flip. That’s what JD and I used to do, which drove to our flips on Saturdays. We walked into an open house by our flip to figure out what the market was doing. She knew what ARV was. That’s why we knew we should hire her and we did. The language matters. She used the ARV in her sentence and we’re like, “What? Most realtors don’t even know ARV.”

Give us one more. I need one more. It’s got to be three.

Another one would be sometimes we talk about an agent representing you which we call a dual agency. 1 out of 10, maybe that the agent won’t legally be able to because of conflict of interest and that will be if it’s an REO that they’re selling, which is a real estate owned, foreclosure bank-owned or state sales. I find that to be as well. They don’t want to represent you on the buyer side.

In that case, having your license, you have two options. You can submit an offer representing yourself and then you make the commission and bundle that into your profit. We waived our commission if you would like or what we’ve done often. We still represented ourselves as the agent, but we said, “We’re not going to charge the seller to a commission on the buyer side. We’re going to put her back to the deal.” That works a lot better because it’s a psychological thing. The seller sees a higher net to them. That’s what we focus on. It’s all about them keeping more money. It gives you more options. That’s the takeaway.

I remember looking back at my career if I could go back in time and do it differently. You started investing and morphed into a brokerage and all of that. I started as an agent and I was always trying to get the deal and the commission myself. We have a lot of real estate agents that come into Fortune Builders as students and they want to learn how to invest. One of the biggest mistakes is we’re trained to go after the commission ourselves that we’re cutting out an army of agents that Randy’s talking about.

Think about that, on 1 caravan, you have 20 agents knowing who you are and what you’re looking for that will meet multiple people and see multiple properties. The way I did it was I completely cut that out. That’s what you’re talking about. You’re talking about raising a little army to go out there and find deals for you.

They respect you because you’re also a realtor. I’m saying, “I’m not in it for the commission. I’m going to let you have it.” Their respect level goes up because they’re like, “Not only do we speak the same language, but you don’t even want the commission.” That’s not normal.

All of you reading, you know when you call on a listing, whether you’re looking for your own home or an investor, one of the very first questions the agent asks you is, “Are you currently working with an agent?” When you come back with something, “I happened to be licensed, but I’m not looking to collect the commission. I’d like you to represent me.” It’s disarming. It almost doesn’t make sense to them because everybody’s after the money, but you want to keep the main thing.

FBL 22 | Investor Realtor Relationship

Investor Realtor Relationship: Go to caravan events, get up and be a cash buyer. Ask the agents in the room to represent you. And, they will all look at you as their client.

 

The main for us is finding deals, flipping properties and adding properties to our portfolio. You started as an investor, CT Homes, yourself, JD. It wasn’t in your original plan to own a brokerage and have 500 agents in your network. Tell us a story about how that came to be and then we’ll talk about why it’s something everybody should consider.

The goal of getting our license was to accelerate our investing business and it worked to the point where as you start putting houses on the market, you start getting buyer leads off the signs and then also if you’re going to follow the E-Myth principle, technician, manager, entrepreneur, I didn’t want to be the listing agent forever. I quickly outsourced a listing agent, which we needed our brokerage to hire under us if we wanted it to control it all. That’s the way it started and it morphed into a brokerage over the years because we had this unique niche, boutique investor-friendly theme to our brokerage.

Agents we’re attracted to A, our culture because not only were they joining our company, they were joining our companies, Fortune Builders, CT Homes, all of that culture. They knew that they were going to get access to off-market properties. Who has the inventory? Us, the investors. That was a unique thing that attracted agents to us without even thinking about it.

The next thing I knew, I had ten agents and I was like, “I need help.” I hired a manager and then we grew with 40 agents and we have a brokerage. I realized and learned a lot about the brokerage world because I was put into that. Than and I were talking about, as we speak around the country with Fortune Builders, the biggest need around the country is investor-friendly brokerages. Most big brokerages, the KWs, the Coldwell’s, great companies don’t understand what we do. They automatically say, “We don’t allow you to wholesale. We don’t allow you to list your flips.” To them, it’s a liability. That’s it. They don’t understand what we do. They’d rather say, “We don’t allow it.”

You’ll get a few here and there, maybe the broker that invests in himself and understands but across the board, you’re right.

That was the biggest thing that we saw early on. Than and I wanted to solve that, but we knew that we didn’t want to grow our brokerage. That led us to a meeting with the CEO of eXp. The CEO that I can remember was Jason Gesing. We have looked for the perfect partner for years. We couldn’t find a perfect partner until that. The reason it worked for us is that they’re one company. There were no franchisees anywhere. It’s one company. They have brokers in every state.

For us, to expand our organization was very easy. Before we joined and had our brokerage in Southern California, I was limited geographically to here. We got 40, 50 agents on a team. Fast forward since we moved our brokers to eXp, we have 500 plus and growing. That is only possible because of the infrastructure and how the foundation has set up eXp.

We may have lost some people here, though, because we got investors reading this and they’re like, “I’m not interested in being an agent and running a team of agents or anything like that.” First of all, explain how you can set up a simple structure that could make you a lot of money off of your current business model as an investor?

Knowing what I know about owning a brokerage, the first thing I would tell an investor is, “Don’t start your brokerage.” Even if you get licensed, keep it simple. You can build a retail team. When I say retail, this is a team that’s focusing on maybe listing your flips, working with buyers finding their dream home, seller properties, traditional stuff. You don’t need to own your brokerage to do that.

For an investor, I would recommend that you get your license or one of you on the team, then hire a listing agent, but that listing agent doesn’t have to be under your brokerage. As long as you hang your license somewhere, it doesn’t matter where it’s at. I would at least make sure that they’re in that same brokerage to make it easier, but you don’t have any liability or any overhead.

You’re creating a little team under that brokerage that is only existing because of your need for the success of your investing business. Instead of you as an investor listing that home, give that to that agent that you brought on your team. Let them list that home because that’s their passion. They want to be a professional agent, not you, in most cases. That’s how it starts growing.

A lot of times, when we talk about bringing somebody on your team like Randy said, we’re not talking about you hiring and putting somebody on payroll or anything like that. This is simply because you have your license yourself. You can develop a strong relationship where you identify an agent, whatever it is about him or her. “This is going to be my primary listing agent. We have a mutual agreement. They’re going to list my properties at discounted rates. I’m going to send them other leads that require listing for maybe a referral fee or maybe not. Also listing our rehabs and then sending them some buyers.”

That’s how you start getting into the second bucket that we could touch on is how do you leverage the investing side to build a traditional business without you being the realtor that works on it. That’s how you do it. Slowly, you bring that one agent and know that your activities as an investor are going to lead to traditional opportunities. Why say no to that? Why not give it to someone excited to take those opportunities and convert them into listings and closings with buyers?

Serve your audience the right way by giving them options. There is a way to help them with every single lead.

Then you get whatever you agree on with that team member. It could be 50-50. That’s what I have as an agreement. I generate the lead. I give it to an agent on my team and I get 50% of the commission, but I’m not the one doing open houses. I don’t drive around on the weekends. Not that there’s anything wrong with it, but that’s not my passion.

You want to keep people in their lanes, where their passions are. Randy is saying, “I pass leads to people in my team and I retained 50% of the commission for passing the lead.” As we mark it as real estate investors, leads will come in. Are you going to throw them in the garbage or we’re going to develop a relationship where we develop another stream of income from that while being a resource and helping somebody else earn a good living? I don’t see why you wouldn’t do it.

Being an investor, many things we teach are to do direct to seller mail. Let’s say ten calls. You might get responses. How many out of those can an investor buy cash out of ten calls that they get back from their marketing campaign?

Maybe one.

Yes. That’s what I use, 1 out of 10. You might be able to buy as a cash investor with your cash program. The other nine are listing opportunities. Most investors completely pass on those. They’re like, “This doesn’t fit into my lane. I can’t buy it in cash. Sorry, moving on.” It’s fine if that’s how you want to operate and only maximize that 1 out of 10.

I learned from Than that we need to serve the audience the right way by giving them options and knowing that for every single lead that comes in, there’s a way to help them. If you have your license and/or have a licensed team member who loves being a realtor, you refer all those to that agent. You collect the commission on the 9 out of 10 as you focus on your 1 out of 10 flips. You get paid on all ten.

That’s one thing I love about the CT Homes model and your model. You squeeze every drop of juice out of the orange. A lot of times, I’m like, “I need to generate more leads and I’ll get three more flips,” totally neglecting the pile of gold that you’re sitting on underneath your structure. That’s what we’re talking about. Any examples or stories of working with a specific agent or somebody or maybe you wholesale the property? Let’s bring some life to what we’re talking about here and maybe throw some numbers at it.

One story that comes to mind on how I leveraged my knowledge of being a realtor and an investor is once I got out of being a partner at CT Homes, this is 2017. I got a lead from a friend in New Jersey. That’s where I grew up in. He knew this property of a family that had a property in Ocean Beach on Point Loma Boulevard.

I looked into the property. It was a two-family property, two houses on one lot. It’s a great location. I wholesaled that to CT Homes. The company that I was partners with. I was on the other side working and building the real estate team, the brokerage side, but I also had opportunities come my way that were flips, while I’m loyal to the company that I was with.

I went to them and wholesaled that property to them. I negotiated a relist on the backend when they finished rehabbing it. Not only that, I was able to make a wholesale fee, then I relisted the property for them. By marketing around the property, we ended up getting another neighbor listing. From that one lead and understanding wholesaling, investors, having access to the network of investors, in this case, this was CT Homes, I created 3 transactions or 3 ways of getting paid on 1 referral.

Those opportunities are all around. With at least every other transaction, there’s an opportunity to make at least one more income source than what you’re currently looking for. That’s the power of education. The more we know, the more we can implement, the more we could use. Speaking of education, every week, we host free virtual training. To anybody that’s reading, if you’re interested in getting started as a real estate investor or maybe you’re in that spot Randy was talking about, “I got into the business, but the business is currently owning me. I’m not currently owning the business. I’m stuck in a trap of being a technician.”

Every week one of our top speakers hosts a virtual training, it’s about 4 to 5 hours. That will help you get started, building or scaling your business. You’re learning from trainers that have done a minimum of over 1,000 transactions in their career, system and model. If that’s you, if you’re thinking about that, you would want to jump on that. Go to FortuneBuildersShow.com and you will get a free ticket.

FBL 22 | Investor Realtor Relationship

Investor Realtor Relationship: When you start, don’t start with your own brokerage even if you get licensed. Keep it simple. Get your license, build a team, hire a listing agent, and start growing from there.

 

One objection, I’m feeling that somebody there is like, “This is great, but realtors do not like working with investors. I’ve tried talking to them and they think I lowball on everything and I’m a complete utter waste of their time.” Any truth to that or can you debunk that argument?

I would debunk because I know of investors who don’t enjoy working with realtors. Why is that? There are bad apples in every industry. That’s what we hear about the most. It’s always negative. That’s where that comes from. The reality is if you meet a realtor that does a lot of business with investors like myself included, it could be one of the most profitable ways of making a living without chasing, which is what most realtors starting, especially have to do. When you were a realtor, you know what it takes to be a full-time realtor and make a living off it. Most agents get out of the business within the first three years, 90%.

The average agent does three transactions a year or something like that?

It’s 3 to 5 somewhere in that range. You’re not looking for the right investors. If you’re the realtor with that mindset and haven’t found the right one yet, then the opposite is true. If you’re an investor that had a bad experience with one realtor, find the ones that can create a good experience for you.

We alluded to some of these things. If somebody reads this and they’re like, “This makes sense to me. I’m going to start building some relationships with realtors,” to me, it’s important to know, “What do we have to offer?” You and I both know an investor is extremely valuable to a realtor. Let’s pull together some of the things we said throughout the show and then add on anything else you want to. Why should realtors be very interested in working with investors?

The number one thing is repeat business. I shared the stat with you, which was shocking. I feel like I have to look at it again. Most realtors work in the traditional arena, with buyers and sellers. This stat was average years homeowners stay in their home as of April of 2021. This says ten and a half years. In San Diego, it’s fourteen and a half years.

That is insane. As a realtor, this is what you’re up against. People are staying in their homes longer. For you to have that client as a repeat client, you need to stay in front of that client for 10 years or in San Diego for 15 years. That’s what educators and trainers teach realtors to do. I do that too, with the hopes that they’re going to refer my business or maybe one day, they’re going to sell, ten years down the road versus an investor like CT Homes and many others that are successful.

We flip homes depending on who it is. It could be 3, 10, 20, 60 a year. To me, that should be the number one reason why a realtor should even at least consider looking into this and realize that this could be a very easy way to make a living without doing ten listing presentations a year. If that’s what you’re starting, you would probably be doing that to get ten deals.

I remember when I got into the business. It was 5 to 7 years. It was the national average. Everybody bought and sold the home. I remember meeting my first investor, Joe. He wanted three-family properties in Bridgeport, Connecticut. He’s like, “I want eight this year. You could find me all eight. I’ll buy eight from you.” I’m like, “Wow.” To me, it was a holy grail I found. Any examples you have of working with investors or some of the close relationships you have? Bring that to life for us.

As a realtor, you want to be strategic. Find the ones that are not necessarily that they’re already doing 100 deals because they probably already have their real realtor relationships built. Not to say that you can’t get in there. It’s going to be harder. Number one, go to REI meetings, real estate investor meetings. That’s a great place to meet them, but you also have to be able to filter through who’s the real deal or not.

How do you do that very quickly? Give some advice to the audience.

First, I would say, “How long have you been in the business?” to gauge what I’m up against as a realtor with this investor. “What’s your acquisition channel? Is it building realtor relationships? Is it direct mail?” What I’m looking for is someone to do direct mail. Why? I already know as a realtor, if I help that investor and build a relationship with them, I might have opportunities on those 9 out of 10 that we talked about earlier. I will zone in on those investors who spend money and have a marketing budget. That’s a tip and a strategic way to identify who’s for real and where is the biggest opportunity.

I remember something you taught us. The average investor should be doing direct mail. That’s tried and true. You shouldn’t depend on it as your only lead source but part of the mix. A lot of times, we send out the yellow letters or we send out to post or whatever as the investor. When you have a relationship set up like Randy in your local market, you share those leads with the realtor, you have the realtor send out letters as the realtor saying, “I have a buyer.” The buyer happens to be you.

Keep trying to find the right Realtor/investor for you. There are bad apples in every industry.

We’re hitting from both angles as the investor and realtor. That’s one of the ways you could work together. How long have you been in the business and are they investing money in their marketing? Also, by having your own MLS access, you could put in an agent ID or an agent’s name and see how many transactions they closed in the last twelve months or whatever it may be. The last time I checked, I was to do it.

You can still do that.

REI groups, meet-ups, what else do you want to add to that list?

They were driving around and looking where the flips are happening. Early on, you could see where’s the rehab and identify who’s the owner and reach out to them. Go directly to the source based on seeing the property being renovated. It’s pretty easy to identify flips because most investors are going to put their sign up. That’s their marketing and branding. “We buy houses. New redevelopment by so-and-so.” Contact them and praise them about the flipped that they have coming up. Learn about it. Offer to do open houses for them as an agent. What do we enjoy doing? Open houses. There is nothing better than doing an open house at a vacant home that’s renovated and staged. All agents want that.

If they say, “We already have an agent.” “Would you be open for me to do an open house on a weekday?” I bet that the agent that they have is only doing it on Saturday and Sunday, the busiest days. “How do you get in the door?” Offer to do it on a weekday. As an investor, if you ask JD how many open houses he would like per week, he would say every day. Why not? Why don’t you want someone pointing signs to your property and marketing it? It would be foolish. It doesn’t cost investors anything.

I mentioned co-partnering and co-marketing with the realtor. I used the example of the yellow letter, for instance. What other ways are you able to capitalize on that relationship?

Since we had our license, we took the solutions approach. We teach Fortune Builders to our students that once you are licensed, that opens up opportunities to change your marketing a little bit so you’re not only talking about the cash program. You can say, “We can help you in whatever situation you’re in.” That’s what we still do.

One of the things that’s very effective is going to the appointment together with the investor. You are their realtor, the professional they rely on, so they praise you. They share how amazing you are and why you’re even there to run the numbers for them. Vice versa, the agent could praise the investor and how great a company they are. You edify each other in front of the potential client.

What you’re there to do is listen, take the server approach, and understand the real need of that potential client. The goal is it’s either you walk out with a purchase contract or with the listing, one or the other. The key thing is, is the seller chooses. Not you try to corner them to what you want. Then you work out a mutual financial partnership in that.

Get a listing from that appointment. The investment company is going to get a referral fee because one of you is probably licensed in an investment company if we follow what we’re saying. Or if that investor walks out with a purchase contract, you’re going to be listing that property, so everybody’s incentivized equally. No one is pulling in their direction.

It’s a win-win. You’re putting the client first. I remember my first year transitioning from realtor to investor. I went to these appointments and I always found it awkward. I’m like, “I could list your house for $250,000 or I’ll buy it from you for $200,000.” It creates this awkward thing where there’s nothing technically wrong with it. People listen to it and it doesn’t sit right with them. With the approach you’re suggesting, people will sense that you’re looking out for their well-being. “Whatever you want works for us. We’ll take care of you.”

It’s like, you stay in your lane and then have a professional agent who stays in their lane and it’s a lot easier to edify each other. It’s hard to be great at both. People are going to see right through that.

I remember being in this networking meeting one time and this new guy of the group. He introduced himself. He’s like, “I’m a realtor. I do insurance as well. I’m a mortgage broker.” I’m thinking in my head, “You do nothing.” You want somebody that specializes and focuses and is passionate, like you said. I do this in every show and I know you’ve listened to this show before, so you know what’s coming, but we call it, “The Fear Factor.” What advice do you have for our audience on how to overcome fear in life and business?

FBL 22 | Investor Realtor Relationship

Investor Realtor Relationship: If you meet a Realtor that does a lot of business with investors, it could be one of the most profitable ways of making a living.

 

The first thing that comes to mind is to partner with someone that has done it and has more experience than you and whatever you’re pursuing. Not forever, but in the beginning, because that removes all the fear. Starting as I know for anybody, especially in the investing game, the biggest fear we all have is, “I don’t have any credibility. I don’t have any money. I don’t have all the decks lined up,” but if you partner with someone and a lot of good investors do not mind partnering with other investors.

The same thing goes on the agent side. When I have new agents joining our organization, their biggest fear is, “How do I go to a listing appointment?” Partner with us, we’ll go with you. If they understand that education and experience are more valuable than a higher commission, in the beginning, they’ll win faster. Whatever you end up doing, if it is real estate in this case or anything else, find someone that’s been there, done it, has more experience and approach them with an opportunity of a partnership, for the first few transactions, whatever it is that you’re doing.

I look at partnerships as another form of funding deals. When I was brand new as a student to Fortune Builders, my first deal, I was looking at how to fund it, how to raise it, I brought it to Than, Paul and Conrad and we partnered on the deal. They funded the deal. They got 60-40. They’re better negotiators than I was at the time. Otherwise, I didn’t have the knowledge at that time to get the funding myself. I was a little afraid to do it as well. It was a great confidence builder. It was partnering and seeing how professionals do it. That’s great advice.

We got a lot of existing investors and people thinking about investing that are reading this. Maybe they’re part-timing and going all-in as an investor or taking that leap of faith and betting on themselves and starting the business. What is the number one piece of advice you would leave for that individual?

The theme here is getting licensed and being an investor agent. If you follow that and you do get your license, the number one tip I can give you is, please don’t get distracted. What I mean by that, this happens and this was my number one responsibility I felt like to our students, especially locally, is to keep them in their lane. They invested a lot of money to be coached by us. It would be a disservice to them if I all of a sudden be like, “You have an uncle that wants to buy a home? Go ahead and drive with them on the weekend and look for homes.”

My biggest tip would be that even though we said many good reasons for getting your license, please don’t get distracted and start working with your friends and family, looking at properties with them. Refer those to a partner that does it professionally until you’re ready to step into that game. That means that you already have a team. That would be my number one tip, stay focused, stay in your lane. If you’re an investor first, go all-in on that. If you’re a realtor first, go all-in on that, then you can transition into the other because they do talk to each other but don’t do it too fast.

Know what you’re aiming for. That’s what I hear when you say that. Everything that we talked about should be a tool to help accelerate and help build your business. That’s good advice in general for building a business. I meet so many young entrepreneurs who say, “I want to invest in real estate.” Then you see them and they’re like, “Bitcoin. NFTs.” All of this different stuff and nothing wrong with different asset classes, but know what you’re aiming for and go after it. That is great advice. If someone’s reading this from in the local San Diego area, how could they get in touch with you if they want to connect or need your services?

Email is best, Randy@RandyZimnoch.com reach out. If you’re interested even in joining our organization nationwide with Than and me, we love to have you in the investor-friendly organization that we’re building at eXp. We’re passionate about that and this is what we talk about every week. This is our life.

If you’re thinking about that, I would recommend these guys as the best of the best. It’s so good having you on the show. Thank you, everyone, for reading. I hope you enjoyed the episode. We will see you next time.

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About Randy Zimnoch

Randy Zimnoch, learned to speak English at the age of 12 after moving to United States with his family from Poland in 1989. Shortly after, he was achieving high honors in most of his classes. Graduating from Wallington High School in New Jersey in 1997, Randy got a full ride to William Paterson University based on his academic achievements. At William Paterson, Randy joined Alpha Phi Delta Fraternity where he served as Treasurer and Vice President while earning his Bachelor’s Degree in Business Management.

He graduated in 2001 with high honors and a G.P.A of 3.8. Randy Zimnoch always had an entrepreneurial spirit within him, starting his first business right after college. He ran a successful cleaning service company in North & Central Jersey managing over 200 accounts at one point. Realizing early that his passion is somewhere else, Randy turned to real estate for the answer and slowly took him self out of the cleaning service leaving it totally to his family. Getting coaching and mentoring from his very successful high school friend, Randy quickly excelled as a successful Realtor, Investor, and Speaker all within a short three years. Dealing mainly in this distressed market, Randy has negotiated over 50 short sales, sold over 50 bank owned properties as an REO agent and rehabbed over two dozen homes.

In 2008, he also co-founded the New Jersey Real Estate Social Network with his business partner, Jonathan Steingraber. It is one of the biggest & best real estate networking groups in New Jersey that holds monthly events with over 3000 real estate professional attending throughout the last couple of years. He currently resides in San Diego, CA and is the Acquisitions Manager for CT Homes LLC, a residential re-development company that has done over 550 projects since forming in 2004 and is featured on the hit TV show A&E’s “Flip This House.” He is also a co-owner of a real estate brokerage called Realty National Inc. with his partners, JD Esajian and Jonathan Steingraber. The brokerage, which consists of a few exclusive agents at the moment, came to existence in 2011 with big plans in mind for the near future. For pleasure, Randy enjoys working out, playing basketball, and traveling. Randy says: “there is nothing like taking a break from the daily life and exploring what’s out there, it’s truly amazing what the world has to offer.” Randy is happily married to Kamila Zimnoch with their two dogs, J.Lo & Lexi.