The REI Referral Network: Connecting in Quarantine
The real estate investment world has come to a screeching halt since COVID-19 hit the U.S. Although many people are refinancing their homes, most banks have slowed or halted their new home purchase originations all together. Suzanne Andresen, the chief revenue officer at REI INK Magazine and one of the founders of the new REI Referral Network, says that this current crisis will create more opportunities for investors once we get back to business—and investors need to be ready.
She advises both investors and realtors to build their networks and relationships during this down time. By doing so, realtors will already be familiar with what their investor clients are looking for and can make sure they get first glance at assets that could be an acquisition for their portfolios.
The Referral Network Solution
Networking can be a challenge with stay-at-home orders in effect around the country, but Andresen has a solution. Last year, REI INK developed a new online network to connect real estate agents and brokers to partner with investors and service providers. Although the company didn’t foresee the current pandemic, they did see a hole in the market they wanted to fill.
As a realtor herself, who started selling real estate out of her dorm room in college, Andresen saw the value in an affordable online platform that could connect real estate practitioners and investors. The modest fee, with no contract, is more than paid for in just one deal. Even better, the REI Referral Network is waiving its fee until September so real estate professionals can give it a test run.
Not only does the REI Referral Network help you build your relationships, but it also gives you a first look at investment opportunities, many of which are not yet listed publicly. Each week, the network sends out a newsletter to more than 30,000 people featuring one of their member’s listings. Not only do members see the listing, but they also have access to a real-time comparative market analysis for the property, along with information on the market it is located in. Members can access market metrics directly from the newsletters and can see how the asset compares to other listed and sold properties nearby.
Because the newsletter is sent nationwide, members can explore markets around the country and then connect with realtors who have expertise in that specific area. The featured asset has a direct link to the listing agent. The network does not take a referral fee because that’s not its mission. The REI Referral Network’s mission is to connect realtors with investors.
“You may not realize you have a California investor who wants to buy in Albany, New York, and we take that asset and share market metrics. Now your listing is marketed to more than 30,000 people with no marketing fee,” said Andresen. “Real estate is a relationship business, and this is an opportunity to expand your relationships well beyond where you currently market to. Many realtors only focus on investors in their backyard. This is an opportunity to connect nationally with a partner for a local business, which is traditionally not how real estate is done. So, you’re now creating a strategy as a real estate professional for national engagement.”
Agents and brokers can list up to three states and up to 20 counties as areas of expertise on their REI Referral Network profile. This allows agents working in tri-state areas, such as New York, New Jersey and Pennsylvania, to attract clients interested in their entire market.
If they develop a strong relationship with an investor and do right by them, they can potentially list the fix-and-flip acquisition again after it has been rehabbed. By developing their relationships with agents, investors put themselves in a position to get a first look at opportunities that hit the market, often before they are made public to other real estate professionals.
Post-COVID Trends
Andresen stresses that the time to build these relationships is now. Before COVID-19, inventory was low. Many investors were using the build-to-rent model to build their portfolio. However, she believes this trend will change dramatically in the next 60-90 days.
“The availability of assets to the investor, post-COVID, is going to significantly increase,” Andresen said. “It was at an all-time low for them, so it will literally go from zero to 60 in a short time. They were competing, and now it’s going to be a feeding frenzy.”
The economic burden this crisis has created will result in more REO and foreclosure assets coming to the marketplace, and homeowners’ financial distress will contribute to a buyer’s market. As a result, the rental market will improve as people move from home ownership to renting.
Another trend she foresees will be more people working from home now that they have proven their ability to get tasks done away from the office. Although working at the kitchen table may be feasible temporarily, she predicts some families will start upsizing their homes to accommodate one or two home offices.
“I project that commercial office space is not going to be as in demand as it was,” she said. Perhaps offices are going to reduce their brick-and-mortar footprint and provide three or four transient offices for those that come in once a month—where it’s not your office, it’s just an office that you use for the week that you’re in it and on-site. Therefore, people are going to need that additional bedroom they may or may not have in their current housing arrangement to accommodate one office, and perhaps two, if a husband and wife have been sequestered to be home.”
REI INK launched the REI Referral Network last year without any idea of what was on the horizon. Now that COVID-19 has created new opportunities for both agents and investors, the timing could not be better for real estate professionals to engage in this network, especially since the fees are waived until September. After September, the network will charge agents a nominal fee of $11 a month and investors $99 a year, with no contract. One deal will more than cover the membership fee. The network basically pays for itself. Feel free to take a test drive and enroll at www.REI-ReferralNetwork.com.
REI INK is in a unique position, having relationships with both investors and national real estate brands. “We want to bring everyone together,” Andresen said, “and we have the platform that can do that.”
