So, you thought you are good at selling. And it is not just selling about something. It is about real estate! It is not about hundreds of dollars, it is about thousands of dollars. No! It is about millions.
But do you think you have what it takes in becoming a millionaire selling real estates?
Do you? Nah. You do not.
But wait! There is what they call real estate investment agreement.
Real estate investment agreement, as the term suggests, it means you as an agent, a seller, enter into partnership with another party. In some words, it is a joint venture of two sellers, they become one, they sell as one, and they represent for one instead of themselves.
It is not for the individualists to take up. If you are a hard-core individualist who is happy selling by yourself, then this is not for you. But if you are craving to have some sales, if you want to get that quota, or simply said, if you want to earn, the one thing you can do the least is to team up with another person, or group or individual. We may call them investors. It may sound weakening on your part but if that works, and it really works for other people, then why restrict yourself from doing it?
You may not have heard of it, and it is not even a business term. There is a word called collectivism. What it means is that you should value interdependence with other human beings. Before going into business, let us talk philosophy. Of course, individualism is the very nature of business. You want to have profit, so you want to be as individual as possible. The fastest way you can earn as much, is to earn alone by yourself, without having to share it, the income, with others. But can you do it all by yourself? That is a big question.
Collectivism in philosophy says the other way around. It tells you to work with other people so you can be productive. How? Well, one can explain the use of a broom as an example. One bristle of a broom is weak and probably useless. You cannot sweep with a single bristle. But if you tie plenty of them, if you group all of the bristles together, they can become a real broom. They can be useful. And that is how collectivism works. Unless you are that selfish, you will never be comfortable venturing into joint investment. But that itself is an investment. Teaming up with others is itself an investment—which requires an investment agreement. More on the agreement, or contract, toward the end.
This can be a personal preference. Some can work efficiently as individuals. Some can be efficient working with others. But we are talking about business here, and business is about profit. So the biggest question is, how do you do investment regardless if you do it yourself or with others?
Many of the successful sales are a product of a good relationship between the seller and the buyer. If you cannot make friends with strangers, how hard would it be for you to convince them to buy your products? If you notice sellers or agents, they are really good at talking with strangers, as if they and the strangers are long time friends. It is faking. True. But that is a necessity. You cannot get sales if your face looks sad and unwelcoming. But are you willing to act out as though everyone you meet is your friend? Can you act out as someone who is always smiling, a trait typical of a businessman or a salesman? If not, then you miss another point in the investment.
Selling is a gamble. You have to at least spend some money for things to work out. Would you be willing to buy a cup of coffee to a prospective buyer? Would you be willing to drive him somewhere else, to give him a look around of the property you are selling? Would you be willing to treat him to dinner? If not, because you are thinking it could just be a waste of money, thinking he is not a sure buyer, then you lack another investment, which is spending of money.
Would you be willing to give your day of salary just so you could spend time with the person, the prospective buyer? Would you be willing to give him a tour to your store, which happens to be a real estate? Just for one whole day, would you be willing? Or would you reschedule because you have other things to do? But by the time you rescheduled, you just missed the opportunity. He cannot make it. It is sleeping time for him, and someone, another agent, offers him to meet him tomorrow and give him a lunch treat. Game over.
But the current trend tells us that friendship is not really that necessary when inviting people to invest in your business. These days, people who are into investment, or shall we say, the investors are becoming more professional. And by professional, they do not look for anything else aside from business and profit. If they profit or they get a return in their investment, who cares if the people they have a venture with, they partner with, who could be yourself, is their friend or not. If they earn, they earn. And that is all that matters.
But there is a magic word, which is loyalty. Your partnership with other investors must be bound by loyalty. And we may include trust. And even commitment. They are not really necessary for a successful business partnership, but the people who should enter in this partnership should at least feel and sense these magic words. So even if you have not attained that level required for in a friendship, but you should have at least the positive elements.
The very big question is, how do you assess and control your relationship as business proprietor or owner with those of your investors? And vice versa. How do you make a system?
In business, the system is called investment agreement. Some call it investment contract. So what is an investment agreement? And more specifically, what is a real estate investment agreement?
Investment agreement is an agreement between a business proprietor and the investors in running the business they are into. What an investment agreement does is define, limit the scope, and set the terms that the two parties must accede to. It defines their roles. It limits what they can do as investor and as owner, respectively. It regulates the process. Generally speaking, that is what an investment agreement is.
In a real estate investment agreement, the terms are very delicate. Here, we are speaking of hundreds of thousands, and millions of money. Your clients could be the president of the USA, the owner of a car brand, or a mafia. The implication is your documentation, and the investment agreement is just one of them, should be as professional as possible.
So what should be written in a real estate investment agreement? What are the terms to be set, to be defined? Who does what? When is the time frame for the contract?
In an investment agreement, the basic terms would be the names involved in the business, that is the name of the registered developer, owner, agents, as well as the names of the investors.
Another information would be the dates. What is the starting date of the contract? How does it end? Is it renewable?
The purpose of the agreement should also be mentioned and what the agreement document is all about. There could also be some space for the investors to express and write their reasons why they are joining in the real estate investment. There can be many reasons for entering into investment, but basically it is all about profit.
People who will involve themselves in a real estate investment are there for money, profit. The softer term for that is return. So in this document, the investment return should be defined clearly. Remember, the investors are there to help you in the first place. So you mast take care of them. In the return, what is the percentage that they should get? How much should they get? What are the means of contributions. Is it through deposit or through collection? How do they want their returns claimed? Is it also through deposit, or through bank checks?
But we are using the word investor here. For others, it could mean part owner of the business, as opposed to shareholder. Hence, it is important that the terms are clearly defined and established in the document. The agreement should be well understood by the people involved before they make the signature.
The risks should be discussed in the agreement. This may be overlooked, but in a real estate business, the risk is very critical. It involves a lot of money. If something happens, what are the terms to be followed? Is there a mention of it?
In some cases, corporations will define the roles of the investors. How much power do they have in controlling the business. Are they allowed to make the terms in the business? Or are they limited only to receiving returns?
So there is a word or two on real estate investment agreement. It is important to set the terms, as this will determine the structure of the overall business. Implementation of what is expected for every party is a must.