Hi, thank you for taking the time to read my post. I am a new investor and am eager to get my first investment property. Looking mainly at 1-4 unit multifamily buy and holds, but also considering SFRs and flips.
I have been working with a Realtor (who was referred by a friend/coworker). He has shown us around 4 properties (SFRs) and has been in contact with listing agents of multifamily listings. We found all the properties on the MLS. He went out of town for a week and another realtor from his office showed us a few multifamily properties. We expressed on Sunday that we want to place offers on two four-plexes. The 2nd realtor said that they would have a meeting on Monday (yesterday) about these and the original realtor would get back to us.
We tried contacting him yesterday and today and have only gotten through to voicemail. We really want to at least put in an offer on these properties, as we are eager to get started. If they get accepted, great. If not, then we can move on to other prospects. I greatly appreciate the time that the realtor has spent with us, but I hate to say it, the communication feels way too slow. I may lack experience, but I feel that one day can mean the difference between getting a deal and losing it.
We are offering significantly less on these two properties than list price, but they are the numbers that work on our buy and hold analysis, at around 7-8% cap rate. Could it be that the realtor feels that they are unlikely to accept the offer and it's not worth the time? While I agree that there is a big chance they won't accept it, I would still like to try. Is this an unreasonable expectation?
Any thoughts on the matter would be greatly appreciated.
Congrats on making offers.
Assuming you do not have an exclusive AND you truly believe this Realtor is not the right fit for you then thank them for their time (maybe by getting them a $25 gift card) and move on. If you're relying on a Realtor to get you into properties and put offers with the numbers that work for you (not them) to advance your business, then you need someone that's good on your team, and don't settle if they're not doing what you're looking for (i.e. making offers at prices that work for you and communicating within a reasonable time period).
One of the big challenges with REI is that you typically need to navigate through SO MANY important [prospective] people, places, and things (e.g. partners, contractors/subs, investors, tenants, brokers, buyers, wholesalers, properties, investment cities, lenders, etc.) to find ones that work for you.
I believe this is one of the biggest reasons newbies settle and/or stop because they get frustrated looking for the right ones, and they stop.
Good luck and keep us posted.
I think you need to communicate your expectations to the realtor. It does sound like he needs to speed things up a bit.
As far as not liking your offer being the reason, too bad. It is his job to write the offer no matter what he thinks. It will be the seller's agent's job to present the offer, no matter how they feel about it. When we first started working with our realtor, I know he didn't like the low offers we were making, but he did it anyways. We got our first rental property for 2/3 of the listing price, and brought less cash to the table than each of the two sellers- they just wanted out and we got a great deal. 2 years later our realtor talks about that deal all the time, and we are on our 4th and 5th purchases with him as our agent and are still learning from each other!
If you are offering significantly below list price, then a day is not likely to make a difference. If the property goes under contract before you get your offer in, you can be assured that it went under contract at a higher price than your low ball bid. I would communicate with your agent before dropping him. If you plan on investing for a long time, and buying a number of properties, you do not want to start your investing career by making enemies of agents. They will remember you down the line, and if you make an offer on a property they are listing, they may steer their seller to another offer and explain to them you are a difficult buyer to work with.
So my advice, communicate, communicate, communicate. Then if it doesnt work out...then move on.
Hi, @Arianne L. - Time is money when purchasing real estate.
With that being said, has there been a pattern of poor or slow communication from this realtor(s)? Typically 24-48 hours is a reasonable response time. However, if there is a pattern of poor communication from this agent, then you certainly have the right to part ways, unless you've signed a contract to work exclusively with this team (some agents require this) then you need to address that before moving on.
I was in a similar situation when purchasing my recent income property. The realtor had great Yelp reviews and gave a fabulous initial consult. However, things went downhill from there -- his communications were not detailed, he provided no timelines (we were out-of-state investors), and it took him 48+ hours to respond to our most basic emails.
I made the difficult decision to part ways and it was the BEST decision we made. Our mortgage broker referred us to an excellent realtor who met our needs and efficiently got the job done. Hope things work out for you!
Thank you all for taking the time to answer and add something to the discussion. Being a newbie, it's great to hear from people who have a lot more experience in the industry.
I do not have an exclusive so at least I wouldn't have to worry about that if it ends up that this realtor isn't the best fit.
Thank you for your input. I can definitely relate to the frustration of finding good parts of my "team", which right now is pretty much a big work in progress. However, I will not let this stop me reach my goals. I am hopeful that I'll be posting a success story soon, learn through expereince and be able to contribute more to the community!
Yes, I do think that we need to talk about certain expectations. The first week we talked to him, he was more prompt. In fact that was when he showed us those 4 SFRs. However, after that, it seems that business has picked up (a friend of mine is closing a house with him soon, and I know from social media that he has two other on contract), and we are no longer a priority. While I totally understand that I am not a priority from a financial standpoint, I believe that returning a call and committing to a timeline is the professional thing to do.
Thank you for sharing your own experiences regarding writing offers and getting accepted. Congratulations on your recent purchases! One day, (hopefully soon) I'll be able to share some success stories as well!
I definitely would never want to make enemies out of anyone. The reason I asked on BP is so I could get a wider range of insight into my situation, so I greatly appreciate your input. I will continue to try and communicate. Once he actually returns my calls, which I hope is tomorrow, I plan on discussing our expectations of each other and hopefully submitting those offers.
When we first started working with each other, his response time was well within 24 hours. However, after that first week, it has been more than 48 hours, and there have been times when he would say that he would do something, and then never do it. I will give him the benefit of the doubt, and as I said earlier I'll discuss specific expectations and hopefully submit those offers. If we do decide to part ways, then I at least know that we tried our best but he just isn't the best fit for our current investment goals.
Thank you for sharing your experience. I'm glad that you were able to find a realtor that got the job done. Congratulations on your out of state purchase!
@Arianne L. I stumbled onto this post somehow and am now wondering how things went? I have had very bad experiences with agents in our area, especially when it comes to response rate, attention to detail, and work ethic. If you are going to be focusing on investment properties I would recommend going with someone who invests themselves or at least understand the numbers and how investors think, assuming you can find them. No matter what offers you are making and on what kind of properties, they need to be done in a timely manner. I have bought 5 houses in our area over the past couple years and have never used the same realtor twice, that should say something. And, because of that I took the time to get my license so I wouldn't have to go through that again. Best decision I have made in a while, so far. In fact, I am on the beach right now with my family and we have been looking at condos and SFR to buy as an investment. Best part, I don't have to wait for someone to let me in. Good luck and if you get time, let us know how things ended up with your realtor. I hope he came through for you guys, but this is likely just a look into what's to come.
We told the realtor that we wanted to make two offers on two separate multifamily properties. Our agent pretty much refused to make one offer, and said that the listing agent blew up on him when he gave the verbal and said not to submit the offer. I believe that we had the right to submit an offer, and isn't it the agents' job to be the "middlemen"? I feel like in this scenario they were more like "gatekeepers" and closed the door between the seller and us. In the end, we decided not to put in the offer through the realtor/s, but we are now pursuing a direct mail approach to contact this specific seller.
He agreed to make the second offer on the second property. So we went through a contract, and have received a counter to our offer. We submitted the offer on Friday, and received an email from him today regarding the counter. He is at least prompt with this one. I will further update on what happens.
Thank you for sharing your own experiences regarding agents in our area. In light of our recent experiences, I am now strongly considering getting my own license for the same reasons you mentioned. It would be great not having to wait to see a property and being able to actually submit offers! Do you mind sharing how long it took you to obtain your license and how much annual costs are? I've seen a wide range in terms of costs, from 1k annually to 5k
@Arianne L. If your offer was justified and backed up with hard numbers then there should be no problem presenting the offer. Especially if this is a multifamily property, the market rate of the property is based strictly on performance and that is quantifiable. You need to make sure your realtor knows investors and the numbers because your representative needs to get this across to the selling agent. I always hated that it turned into a game of telephone and I never knew what was getting through and what wasn't. Like you said, gatekeepers.
It took me longer than most as I kept putting it off because I wasn't sure whether I wanted to do it or not. However, you could take the classes online, take the exam and be done as quickly as you can get them both done (along with the application, finger prints, etc...). The costs really depend on what you want to do with your license, who you hang it with, what associates you become a member of, etc... There are some up front costs with the classes, application fees, etc.. (couple hundred bucks). Mine costs me between $1-2k per year at most.
However, I don't like making offers or representing myself if I can get away with it. I would much rather have another agent do that kind of work for me and I just find more houses. Don't forget that your broker will take a piece of your commissions too so it doesn't all go to you and your money gets hit with self employment tax. But, no one is going to represent you better than you in a transaction and look out for your best interests. For me, the thing I like about it is access to the MLS and not having to wait for someone else to let me in a house. Other than that, I treat each deal like I don't have a license other than disclosing that I do. If a realtor brings me a property I am going to buy, I will use them to buy it and use them to sell it.
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