11 Critical Insights of L.A Developers & Home Flippers
Investors and developers speak a different language
Robert Rodriguez and his team are well equipped to deal with LA real estate developers because weunderstand the 11 listed principles below. Los Angeles home flippers, investors and developers speak a different language, which we’ve mastered.
1. Developers love individual agents with highly specific knowledge of hyper-local markets. They love WORKING with well-oiled agent teams that are capable of covering all aspects of development, rehabbing and flipping homes without a learning curve.
2. Developers love DEALS. If you want to gain the love of a developer, finding them a good deal to develop is the best inroad by far. This requires lots of hard work and a deep understanding of markets and potential future valuation. If you don’t know low range — high range and the spread of each zip codes and their pockets, then you’ll never speak the same language as a developer. As a realtor, one of my main tasks is to know the markets better than my clients.
3. Developers seek OPPORTUNITY at an appealing pricing. You must know your “FOUR D’s”: Death, Divorce, Desperation and Dumb. In death and divorce (or separation of partners) lie heirs who may want to liquidate or must liquidate. Desperation is all about financial burden providing buying opportunity. Dumb is all about people who may be sitting on an opportunity but don’t know how to bring it to life, or simply don’t know anything about development, remodeling or updating to today’s standards or financially are unable to.
4. Due Diligence: Developers do lots of it and thrive on data. In the LA area, many are turning away from closed sales data to signed contract data as the markets are shifting and stabilizing. They are always talking about the deals they passed up but sold for astronomical profits or the potential upside on recently listed teardowns. We speak the same language.
5. Developers love a good TEAM: not just for marketing, which includes a comprehensive set of professional positioning and valuation advisors as well as public relations, creative, media placement, etc, but also a good zoning attorney, a general lawyer, bankers, an architect, a reliable builder, an accountant, an interior designer or realtor with great vision, etc.
6. Developers love PROFIT. Developing and building is hard work with enormous risk. The greater and more guaranteed the profit potential, the more it is worthy of the time and the more buffering exists for surprises, mistakes and shifting markets…..all of which are almost guaranteed.
7. Developers can sometimes have Big Ego’s, but the one’s that don’t are the best to work. Ask what their story is and how they got into flipping homes or how they landed in their current position. You’ll be amazed. My current favorite team of flippers are the most modest brother I’ve ever met. In fact, they were physically repairing and updating their first flip and they still are on the ground floor of every project. How awesome is that? Couldn’t ask for better people to work with. The smaller the ego, the more realistic they will be about expectations.
8. Developers are GREAT SALESPEOPLE: they have to sell their vision and ideas to bankers and financiers and family members. A developer without a vision is a disaster waiting to happen.
9. Developers are FEARLESS. At least they want us to believe that. In reality they are taking on enormous risk and they ARE fearful and scared a lot of the time. Most exude confidence. They must believe in what they are doing. The biggest fears of most developers is the cost of time: financing interest can eat up profit and markets change. Timing is everything.
10. Developers love when you give them design opinions. They aren’t designers and a lot of designers aren’t professional or academically trained. The tastemakers of what is popular and in vogue rarely are
11. Developers love/hate to hear the truth. We are always 100% truthful with our opinions and advice and feedback. While the roughest developer may respond angrily to the truth, deep down they will appreciate it versus the more than a sugar-coated version of reality. We may get fired for telling the truth, but that’s ok because we saved each other time and that is the only asset we cannot replace.
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