Do Real Estate Investors Need Good Sales Skills?
Many people who are not in the real estate business might be surprised to learn that investing and real estate sales skills are two different things. Some sellers are real estate investors, as well, but not all of them are. This fact raises an interesting question: Is it important to have good sales skills to be a real estate investor?
A number of top real estate investors weighed in. An overwhelming majority (26 out of 30) active investors said sales abilities are very important as a real estate investor.
Marketing Knowledge? Yes! Sales Skills? Maybe Not.
One of the dissenting views was Harrison Liu, who believed good sales skills were somewhat important. In particular, he believes location trumps sales skills. Someone with zero or minimal sales skills will have more success investing in a good location with a good school district compared to a sales superstar that invests in a challenging neighborhood. Here is a blog post with a guide to evaluating and finding such a location.
However, he does believe the marketing skills are required in the current market in regards to finding, renting, and selling deals. Whether marketing and sales are two sides of the same coin is a conversation for another day.
Build a Large Portfolio and Properties Will Practically Sell Themselves
Joe Cornwell held an opposing opinion for slightly different reasons, using Donald Trump as an example. He said, “Trump doesn’t have to sell any of his units anymore, and he is arguably one of the most ‘famous’ real estate investors ever.” In other words, once you build up a large enough portfolio of cash flowing rental properties, buying new assets or selling off parts of your portfolio are no longer a requirement. Therefore, sales skills are not always needed.
Generating Leads with Great Real Estate Sales Skills
However, as a counterpoint, does an investor need good sales skills to generate leads and find qualified buyers and/or renters to acquire enough properties to reach the point where their portfolio is so large that they no longer need to utilize those good sales skills? In my opinion, and in the opinion of 26 other active investors that responded to the poll, the answer is yes.
For example, Nick Armstrong said, “I think building your sales foundation builds your negotiation skills, which is obviously a must in my opinion.” Negotiations occur more often than just at the offering table. If you are performing renovations, you are negotiating with contractors. If you are a passive investor, you are negotiating with a syndicator. If you are a small rental or apartment investor with good sales skills, you are negotiating with your tenants and/or property management company. And, as a real estate investor in general, you will negotiate with lenders, brokers, city officials, and business partners, among others.
To put it another way, in the words of Dale Archdekin, “I think that true sales skills are really people skills. The ability to hear and be heard. So, if you as an investor are dealing with people, then YES, it’s a good idea to have sales skills.”
In regards to raising money for apartment syndications, I commonly hear a similar question: “Can I raise money if I’m not good at sales?” My short response to the question is STOP BEING SELFISH! Watch this YouTube video for my full reasoning behind this answer.
Learn how to hone your real estate sales skills with this collection of over 25 blog posts on that topic!