Pick Up These Golden Nuggets from Atlanta's Top Investor's Agent

‘If it’s on-market, it’s overpriced’

“Any agent can provide on-market listings to an investor and say, ‘Hey this may be a good tear-down, this may be a renovation.’ If it’s on-market, it’s overpriced,” Johnny told me. “You are paying retail. It’s not the name of the game in investment. You make your money when you buy into a project, and then it’s going to be 10-fold after you’re done with it.”

He explained why you make money when you buy, not necessarily when you sell:

“Because one thing you can’t foresee is that there are always going to be overages. It’s an intangible you have to budget for up-front. … With every day that goes by, materials are getting more and more expensive. … There is only so much that you can account for. The lower you can buy in (below wholesale, even), that’s where you are going to cover yourself for those overages. … The profit is always going to be there. To mitigate those overages, you are making your true money when you buy into that project.”

‘Sometimes investors get too greedy’

Another insight he provided was that it pays to go that extra step.

“With some investors, all they are looking for is the bottom line, and they want to provide as little as they can to try to get as much as they can. Those two equations don’t go hand-in-hand,” Johnny said.

“The investors I work with are running circles around these greedy investors because they are providing over-the top-finishes and other extras, and buyers like having the luxury of that choice. They say to themselves, ‘I could go with this first-time guy who doesn’t have an established name—that’s fine, but on top of that, he cheapened out on finishes, he provided bare-minimum wire rack in the closets. But with this other builder, I have custom built-ins in the master. I have Kitchen-Aid appliances instead of Whirlpool.’ We’re talking maybe a slight disparity in price, not much. They are going to take that other builder, all day long.”

Johnny’s right. And you know how you beat out the investors who are cutting corners? All you need to do is go to some of the open houses that are in the area in which your build is. Take a look at those finishes. Take a look at their color schemes and what they are doing differently. That’s your standard. If you can provide a little bit more above that, guess whose property is going to sell faster?

‘It takes money to make money’

When I asked what one piece of advice he would you give new investors, here’s what Johnny told me:

“I’m a true believer that it takes money to make money. Here is one thing that I will say: advertising is king. I spend thousands and thousands of dollars a year on my website. … To me it’s all about image, and it’s all about branding. It’s a two-edge benefit. Of course it benefits me by getting my name out there; it gets me recognition. But it also benefits my sellers because—even if I am doing a resale and their property is listed on my website—if somebody from New York, California, or wherever is doing a quick Google search, I’m the guy whose name is coming up, not some other agent. Well guess what, that client of mine just got that much exposure. I just got that much exposure. That’s what you want on your team. … I admit it takes a lot to get yourself established to be able to spend $5,000, $10,000, $15,000 a year just on maintaining a powerful website … You have to hustle initially and get those first couple sales. But then spend the money where it counts: Advertising. Get your name out there. No one will work with you if they don’t know you.”

To see the video of our entire conversation, go to:

www.youtube.com/watch?v=EQLKrtaEXy0