Would this motivate you?

[pakwolve]

I am a buy and hold real estate investor and the past few years it has become increasingly more difficult to find decent deals in my area so I am starting to do more networking to try and meet retiring landlords looking to sell their whole portfolio. A thought I had was to network with insurance agents as connecting with one insurance agent is like connecting with a thousand people at once.

If I understand your industry right it would be a win for an agent to connect an older investor who has a high chance of selling with a young investor who will keep the portfolio insured with them. How big of a win would this be? How motivated would you personally be to try and connect the old with the new? Is this a thing in the industry? As an agent, would you be annoyed by a person like me cold calling you? I have only tried this a couple of times so far with mixed results.

Lastly, if the portfolio is big enough to justify me bringing on a cash investor there would likely be a refinance event that would allow me to offer a small percentage of the holding entity as an additional incentive to an agent. Are their rules/regulations in your industry that would get in the way of something like this happening? Would this additional advantage be enticing if the first advantage wasn't?

Any ideas or ways to approach a conversation like this would be very welcomed!

 

[DHK]

1. The agent would need to be working with people who already fit what you're looking for.

2. You're essentially talking about a business succession plan to transfer assets from the landlord business owner to the next buyer.

3. Most, but certainly not all, probably have someone in mind that is already helping to manage the business and will be an internal family transfer of assets and income.

4. Unless there's a commission to be made by selling more insurance by solving a problem... (there are various business succession planning strategies available through funding life insurance for various sizes of businesses)... it would simply be a kind of referral fee of some kind. I know that agents cannot GIVE such a referral fee... but not sure about RECEIVING a referral fee?

5. The kinds of agents you will want to work with will be on a more sophisticated level and typically that means they will have securities registrations. That means that this may be an Outside Business Activity that may need to be disclosed for compliance purposes.

6. This had better be an "above board" kind of deal because these kinds of agents and advisors won't want to be affiliated with a deal that goes bad. Not saying that's your intent at all, but we certainly won't want to share in the liability if WE had introduced you and something happened. This WON'T be covered by our E&O coverage if we are affiliated in this.

In short, the agents you are wanting to work with will be more concerned about protecting their reputation rather than the money they could earn. It would be the same concerns with any CPA or attorney as well.

Here's a video series about understanding an agent's liability and how they can do a better job to protect themselves (and their reputation) with a prosecuting attorney who sues agents and advisors.

 

[fed up]

Many carriers have guidelines for how many tenant policies can be held by an individual before it becomes a business exposure. I could have 5 policy holders with 4 landlord policies each but as soon as those same properties move to a single owner, they become commercial policies and would have to pass underwriting. It is funny how commercial landlord policies should carry a renters policy on the same address and how frustrating it is when the renters place their renter policy with a different carrier