How to find interested realtors?

Question

Hey guys,

I'm from Canada with a $500,000 budget to invest in some real estate in the US.  I'm thinking about buying a couple of properties with 25% down on each and then renting out the property that should cover the mortgage and hang onto the property for a few years and then sell once the prices are higher again.  Depending on how it goes I can always increase my budget significantly.

Few questions:
1) What's a good area to look at?  (LA & California I know are generally good places)
2) What's the best way to find a realtor that's interested in finding these properties for me?  I do my own homework and would do thorough research as well as fly down before I commit to anything but what's a good way of finding a realtor that's interested in these kind of investments?

Thanks!

Jason Hanson · Answer

Of course interview several agents. Make sure they are investor friendly agents. I would ask them questions about wholesaling, subject-to, lease options and rentals (if they look at you with a blank face then move on.)

As someone else said, any Realtor is going to jump at a guy with $500,000, so do your homework because 95% of Realtors have no idea what "true" real estate investing is.

Richard F. · Answer

Finding a real estate agent to help you spend $500K should be no problem. Finding a knowledgeable agent familiar with investment property will take considerably more effort. Look for firms that specialize in commercial or investor oriented sales and/or property management, and if the agent has a CCIM, or CPM designation, all the better. Avoid the typical residential sales "specialist".

Will Barnard · Answer

Where you should invest in the US depends on your goals and strategies. As you mentioned, CA has proven to be a good place for appreciation over the years, but is in a depressed state and will remain that way for at least another 18 months. If you were to invest in CA, expect the value to drop more, creating a longer span before you can sell for a profit. In addition, investing in CA would be a speculation play, not a cash flow one. Even if you can buy at 50% of value, you would be lucky to just cover your expenses.

On the other hand, as Cummins stated, Texas is a completely different environment. Houston and even more so, the Dallas/Fort Worth Metroplex, have undervalued RE, job growth, and population growth. You can also buy with a very small cash investment and cash flow the property. While you most likely will never see 20% + appreciation rates in Texas, you also will not see that kind of drop either.

It all comes down to your investment style - cash flow (+long term future appreciation) or speculation which ultimately will require you to carry a negative cash flow until the time of sell/market recovery.

As far as Realtors go, finding an experienced and competent one will be a task. Make sure they deal with investors on a regular basis, make sure they invest themselves (practice what they preach), and always get multiple professional opinions on the advice they give you.

Jason Cummins · Answer

Why are LA and California good places to look?  In my opinion they are not very good places to look.  Many of the ares are in double digits on how far prices have decreased and continue to fall there.

There are not many houses you can buy to rent out there and have positive cash flow from what I have seen and heard on these forums and other places.

I may be biased since I live here, but Houston is a good place to invest.  We continue to be one of the best economy's in the nation, and our houses are still going up in price in general.  We never inflated like crazy like much of the nation did.  Katy and Sugar Land are two of the fastest growing City Suburbs in all of the nation because there are jobs in Houston.  Great place to rent out nice houses that you can get pretty cheap.

Jason Kasic · Answer

LA and California since I have a friend that's done some investment there in the past and did fairly well.  Also homes and condos are fairly low prices and for such a nice city those prices will go up sooner or later but to be honest I'm really open to anything.