Entry by Deb Orth

My New Investor Client


Good morning.

If any of you have investor clients, they can be a great source of consulting business. I have my usual clients and on occasion I get a referral from one of my lenders.

This is the case with my new investor client. He is a brand new investor who "went it alone" and bought a foreclosure at auction. Now he needs to know what he can get for the place after he has repaired or renovated it.

I have drawn up an agreement to provide consulting services where I will visit the property with him and his contractor, analyze its resale potential, provide a Competitive Market Analysis, provide ongoing consulting services during the scope of the renovation, interact with the client and client's contractor during the project either in person, by phone or email, and meet with client and contractor upon project completion to ensure all work has been performed in accordance with client's agreement with the contractor.

I have estimated that this will take anywhere from 25 - 30 hours of my time from start to finish. He will pay me a retainer fee of one half of the fee at the signing of the consulting agreement and the balance 30 days later.

When he puts it on the market, he has the option of listing with me at my normal commission or entering into another consulting agreement with me based on his needs, ability, and interest. If he chooses to enter into a traditional listing agreement, I will credit him the advanced fees he has already paid me and this credit will appear on the HUD.

Deb Orth
Richmond, VA


Paula asked:

"Question for you Deb - do you think if you didn't offer to credit him money back that he wouldn't list with you? "

No, I wasn't concerned about that at all. It is just part of my model. I realize I don't have to offer any credit but choose to do so. Maybe I'll change my mind later but as long as I feel I'm being compensated for my time & effort, I'm happy to credit the advanced fees if the client converts. In fact, it seems logical that a client would more likely convert to a traditional listing if he/she thought they hadn't "lost" their initial investment.

Deb Orth
Richmond, VA

That makes sense. I know some ACRE's who offer all of it back, others half, some of them offer none.

I was just wondering what the consensus was and if anyone else had actually tested it to see if it made any difference at all in the outcome or the ROI.

I'm pretty happy with the half credit back right now. They can try it their way, and if it doesn't work, they only lose a little money, not all of it. They've also been in touch with me and don't want to start over with someone else so even with no credit back, I can always say "just for you.... here's what I'm going to do".

They like feeling special ;-)

Paula Bean

This page contains a single entry by Deb Orth published on June 26, 2007 7:55 AM.

Changing Brokers was the previous entry in this blog.

Promoting ACRE to Corporate is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.