How to Work with a Real Estate Agent
Disclosure: We no longer do business with InvestOKC and this blog post should not be construed as an endorsement for this company’s work.
Kendal James, an Oklahoma City real estate agent, started a business with his wife and another couple after seeing a need to fill in his market. He has been working as an agent for the past five years, after spending some time flipping houses.
He decided to pursue his real estate license after he noticed a lot of vacant homes and couldn’t find agents that could tell him why. He saw people in these neighborhoods that wanted something done with them.
“I saw an opportunity and went for it. I decided to specialize in that,” he said.
Kendal, his wife Micah and another couple Austin and Morgan Curtis, now run InvestOKC Realty, a company that helps investors find properties in the Oklahoma City area. Kendal and Micah focus the purchase of houses and finding deals while Austin and Morgan do estimating and oversee renovations. They pride themselves on helping others find the right deals based on different strategies for financing, real estate strategies (flip, turnkey, BRRRR, etc) and investment goals.
Chad and I have personally used InvestOKC for all five properties we own in the Sooner State. I talk about one of our deals in another post.
To work successfully with any real estate investment agents, Kendal advises figuring out your product and the “why” behind the strategy.
“You need to understand why it’s supposed to work, not just do what others have done,” he said. “I see a lot of people who don’t have a good time starting off. It seems like it’s because they are listening to what someone else did without understanding what they are trying to accomplish.”
Kendal and his team will put together a deal sheet and plug in expected cash-on-cash return after including costs like closing fees, insurance, property management etc. Another piece to Kendal says you should have in place is how you plan to finance a project. Getting a mortgage or using a hard money loan versus using cash impact returns so knowing how you plan to pay for the property allows him to give you the most accurate estimate on potential deals, based on your goals.
The last piece is determining your goals for metrics like return on investment (ROI) or cash on cash return. If you only want deals with double-digit returns, an agent like Kendal won’t bring you anything unless the numbers line up with your plans. He can also advise if your goals are realistic for his market.
Once you make that investment, Kendal advises on finding a good property manager and not skimping on the cost.
“[A bad property manager] causes a lot of bad experiences,” he said.
Kendal started his real estate investing career flipping houses. He partnered with his grandfather who would take out a HELOC to buy a place and then Kendal would move into it and start the flip.
“I did a lot of demo, laid flooring and painted,” he said. “I oversaw the day-to-day stuff with contractors. I learned a lot about construction.”
His construction experience helps him work with his partners to come up with renovation estimates based on scopes of work (SOWs) that not only identify items like old furnaces that likely need to be replaced, but also understand the types (and cost) of finishes that match the market and help command certain rents. Lastly, they develop a schedule they believe is reasonable to complete the work.
Kendal’s education is actually in chemistry and physics, but was drawn to real estate because of the entrepreneurial opportunities. However, his science background gives him an appreciation for metrics and the empirical.
“Real estate investing is somewhat simple. It’s not like a restaurant where you have a lot of employees and there are not a lot of things you can measure,” he said.
KENDAL’S RECOMMENDED REI RESOURCES
- Motivation – Website: BiggerPockets
- Construction knowledge – Book: Renovation by Michael Litchfield
- Market Research: US Census
- Continuous Education: LinkedIn Learning or Lynda.com (membership may be free with a qualifying library card)