When researching their options for investment property financing, Velocity investors are twice as likely to ask a friend or associate and three times more likely to ask other real estate investors for a recommendation.  In comparison, other investors are four times more likely to ask their current bank for a recommendation and 2.3 times more likely to use online search listings than Velocity investors.  About one in five investors get advice from a real estate agent for investment property financing sources.

QUESTION: How do you usually find or learn about a financing source for your investment properties?

BASE: Velocity Investors (N=66). Other Investors (N=221). Values indicate the percentage of total investors surveyed in each sample.

Velocity investors are composed primarily of independent real estate investors and small business owners that may not qualify for a traditional bank loan.  Because of this, they rarely ask their current bank about financing resources for the investment properties.  In addition, bank employees are often restricted from recommending alternative lenders when their applicants don’t qualify for a traditional bank loan.  This may explain the marked difference between Velocity investors and other investors when it comes to asking their bank about resources for their investment properties.

Implications

These findings suggest that networking with other independent real estate investors and their associates is more likely to produce a referral for independent mortgage brokers and small business owners seeking financing solutions for their investment property loans.

When trying to grow your business through servicing the needs of independent real estate investors and small business owners, don’t rely heavily on “traditional” channels for lead generation. It’s important to get your name out to real estate investors and let them pass your contact information on to a friend or associate.