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Real estate agents know the ins and outs of their local markets better than most. This, in theory, gives them a significant leg up on other would-be investors looking to buy property.
So why do only some agents invest?
Inman spoke with five agents who dabble in both selling other people’s homes and buying homes for themselves to either flip or rent out about their journey to becoming an investor. We also asked for the advice they’d give to agents curious about investment.
The consensus among the five we interviewed? Every agent should be an investor.
Matt Holm: Betting big on Austin
Matt Holm. Image: Compass
Compass agent Matt Holm has been working in Austin real estate since 2008 and started investing in property there in 2016 when he started building out a portfolio of single-family properties.
After a few years, he grew dissatisfied with simply operating a few rentals and decided to make a pivot.
“I’m sitting here on properties that are making me a couple hundred bucks plus depreciation, which is great,” he thought to himself, he told Inman in an interview. “But it’s just not that exciting; I’m not making enough money.”
He considered investing in Airbnbs but worried that some of the controversy that comes with short-term rentals could hurt his brokerage business.
“The problem is, it’s rife with lawsuits and angry neighbors. Ours being a reputation business, I didn’t really want to be associated with Airbnb,” he said.
Holm ended up landing on a compromise: he started investing in high-cost properties in desirable parts of Austin and setting them up as furnished rentals with six-month minimum leases. This opened him up to new sources of income such as corporate housing accounts, insurance companies putting up clients whose homes had been damaged, and people renovating their homes and looking for long-term yet temporary accommodations.
Holm said he avoids flipping houses because he’s more interested in Austin’s long-term prospects and wants to maintain his investments there.
“I’m bullish on Austin long term,” he said. “I feel like we’re living in Palo Alto circa 1999.”
Holm advises investment-curious agents to start by focusing on properties that have been sitting on the market for extended periods, and throwing out below-asking offers.
“You’ve got properties on the market that are perfectly fine, but they have been on the market 100 days, 150 days, 200 days, and nobody’s even looking at them anymore,” he said. “That’s your time to just go in and put in stupid numbers and see if somebody bites. You might put in five, six, 10 offers, but you make your money on the purchase.”
Mark Mason: Investor first, agent second
Mark Mason. Image: RE/MAX
While many investor-agents started out as real estate agents then gradually got into real estate investing, Mark Mason took the opposite route.
The civil engineer owned two rental properties in Minnesota as an additional income generator. When he was laid off from his engineering job in 2009 amid the Great Recession, he went all-in on investing and started flipping houses.
“I had nothing going on. The job market was really crappy, so I bought a house, renovated it, used a Realtor, sold it,” he said. “I was like, ‘This is kind of neat.”
Mason did three more investment transactions working with a Realtor before he decided to get a real estate license of his own to make his investment transactions more seamless. While he continued investing, he eventually began helping others with their real estate transactions, and his reputation as a Realtor continued to grow.
Soon after, he was able to start a small team, which he still manages to this day with a RE/MAX affiliation. He generated leads for the team from other home flippers during what he considers to be the house-flipping heyday of 2010 to 2015.
Though Mason has been a licensed real estate agent for over a decade, he considers himself an investor first. This only makes his services as a Realtor more valuable, especially to other investors, he claims.
“I would say I’m an investor first and a Realtor second,” Mason said. “I think all of the experience from the investing and construction really brings a lot of value to the real estate side, where a lot of Realtors maybe don’t have the financial background or the construction background.”
Owning rental properties has even benefitted his brokerage business in unexpected ways, by providing him with aspiring homebuyers through his tenants — whom he lets out of their lease early if they use him as a Realtor to purchase a home.
Mason, who has taught classes for Realtors on property investment, believes all agents should be investors; he doesn’t understand why more agents aren’t investors.
“I am continuously baffled by Realtors that are good at what they do and help their clients exceptionally and tell their clients ‘this is the biggest investment of your life’ and tell their clients how much it is going to appreciate and all these benefits, yet they don’t invest,” he said. “My advice to agents is save up some money and invest.”
Ian Slater: Investing in Rhode Island, selling in New York
Ian Slater. Image: Compass
When Ian Slater graduated from Brown University in 2013, he moved to New York City and began working as a real estate broker. A few short years later, in 2015, he and his future husband, who worked in construction, felt the urge to start investing in properties of their own.
Not having the funds to invest in the expensive New York market — each had about $30,000 to invest — they turned to the only other housing market they knew — Rhode Island.
The pair started out with a two-family building on the east side of Providence for which they paid $255,000. They were able to pay the mortgage by renting it out. They were eventually able to buy another house across the street and start renovating their properties.
“We had zero idea what we were doing,” he said. “But the rents covered the mortgage, and we just continued with our jobs and kept working on it.”
Once Slater, who runs Trove Compass, started making serious cash in his brokerage business, they were able to expand their investment operation considerably, purchasing five more properties over a three-year period and allowing Slater’s husband to quit the construction business and focus on their Rhode Island properties full time.
They eventually sold all their holdings on the east side and went all in on the west side, with their portfolio eventually reaching 35 apartments spanning one- to four-bedroom units. At the end of 2023, they sold off all their properties and are figuring out what to do next.
Slater says agents often underestimate their ability to find success in investing, and that the exposure they have to the housing market through their jobs is a significant advantage.
“I remember being very young and being super scared of construction and leaks and electricity and tenant management and all that,” he said. “But you realize that you actually are so exposed to it all the time that it makes more sense for you to own it as a real estate agent than the layperson. So just jump into it.”
Demelza Lisowski: Renting the Emerald Coast
Around 2016, Corcoran Reverie agent Demelza Lisowski and her husband came to the realization that unless they wanted to be working well into their 80s, they needed to start building some serious equity.
They decided to pursue short-term vacation rentals, first looking at properties in coastal Mexico, but ultimately deciding not to invest in the area over concerns around crime.
The then-Nashville-based agent decided to zero in on the 30A area on the Gulf Coast of Florida, otherwise known as the “Emerald Coast”, where she and her husband have decided to invest solely in vacation rentals after trying their hand at long-term leases.
“After doing a long-term lease, we’re going back to doing just short-term rentals,” she said. “Tenant relationships and things can be kind of an uncomfortable arena for us, so we’re more suited for the vacation rental, Airbnb, VRBO scenario.”
Throughout their years of investing, Lisowski and her husband have developed a strategy of pulling the equity out of their existing properties to finance purchases of additional properties.
“It’s always been kind of an equity play into the next thing,” she said. “We usually look every two to three years at trying to do something, and if that means at some point offloading one completely, that’s something we consider as well.”
Lisowski recommends investors look into working with local independent lenders rather than just the traditional Fannie or Freddie route.
“If you find a really good lender that might have some better loan programs, as opposed to the traditional Fannie and Freddie, a lot of times they will work with you to come up with a better rate so that it’s affordable,” she said.
For those looking to break into vacation rentals, she recommends keeping things simple.
“Start small. Your first one doesn’t have to be a luxurious, super pretty place,” she said. “What we find is a lot of people don’t really care, as long as it’s clean.”
Kevin Capra – Taking deals as they come
Kevin Capra. Image: Compass
After he finished high school, Kevin Capra wasn’t sure what to do next, but he knew he didn’t want to take on a mountain of debt. Instead of going off to college like many of his friends, he decided to start a mortgage business. That didn’t last long.
“I hated it,” he told Inman.
Determined to make money in real estate outside of mortgages, Capra decided to pursue real estate investing, taking some of the money he had made selling mortgages for a few months to buy his first flip house in his native Denver.
He started with a house he bought for $18,800 and put around $100,000 in renovations into it. When the work was done, the house appraised for $356,000.
“Alright, that was kind of fun,” Capra thought to himself.
Capra decided to hold onto the property as a rental. After taking a seminar-based class on real estate investment, he dove into it, working on as many as 10 properties a month at some points for a several-year period.
After falling out with his business partner, Capra turned down the intensity on investing and shifted to only investing in properties that dropped into his lap while also teaching property investment and negotiating across the United States and Canada.
While he started investing in 2004, Capra didn’t get his real estate brokerage license until 2018 and now runs the Compass-affiliated Capney Collection Team with his wife. He says getting a brokerage license has helped his investment business, if only by putting him in closer proximity to more people looking to sell their properties.
“If anything, it’s just that more people think of you for real estate, so you do hear of some of the deals a little bit sooner,” he said. “It does open the window for access,”
He shared one example of a client who came to him for listing agent services and shared with Capra that he was desperate for cash in the short term. Rather than list the property and wait an untold amount of time for it to sell on the open market, Capra decided to just purchase the property himself.
At this stage in his career, he thinks of himself as an agent first and investor second but is working to teach his children about property investment by involving them in deals and pushing them to pursue deals on their own, such as a recent project that all three of his kids contributed $15,000 of their own money to.
He recommends looking for leads on properties the old-fashioned way, by combing through HOA foreclosure records.
“One of our big sources of deals was HOA foreclosures because they get really overlooked,” he said. “I actually liked to go to the courthouse steps and do it the really really old-fashioned way and do the research to see which ones had liens on them. I liked to take a different approach to eliminate competition rather than trying to pit against everyone else.”
He encourages those looking to get into investing to not let the upfront investment costs scare them away. The cash can be easier to come by than you may expect, he says.
“Don’t overthink it, if the numbers make sense, use your network and find a way to get the money,” he said. “Don’t get in your own head. If you find a deal and you know for a fact it’s a great deal, do a bit of legwork and the money will pop up if you do enough due diligence.”
