What criteria do you provide realtors when looking for a deal?

44 Replies

I'm currently networking with realtors in my area in hopes of finding a solid deal.

I'm looking for rentals and/or flips in Palm Beach County, Florida.

Here's an example of what I'm planning to send them:

- Single family or 2-4 unit multi-family properties in Palm Beach County
- Should ideally have a way to force immediate appreciation through rehab, value add, etc.
- If rehab is required I must be able to buy below 70% of the fixed up value including my rehab or value add costs
- If it does not require rehab I must be able to buy it at 70% or less of it's current market value
- Rent must equal at least 1% of my total cost (purchase price + rehab)
- B or better areas - no war zones, lower class, section 8, etc.
- Purchase price up to $XXX for all cash deals and $XXX for financed deals

From what I've seen, most agents are not investor savvy and they are not familiar with BRRRR, 70% rule, 1% rule, etc.

Will a typical agent understand my criteria or is this too specific and I need to take a more simple approach?

What criteria are you providing realtors to help them vet deals and understand exactly what you're looking for?

@Brian Garrett - The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

Originally posted by @Brie Schmidt :

@Brian Garrett- The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

I'm aware those are just BP rules of thumb that's why I didn't list them in my criteria but instead I tried to explain them.

I also understand finding a deal that doesn't need rehab for 70% of FMV is a long shot however it is still possible.

Would you mind providing me an example of the type of criteria investors send you? That would be more helpful.

That's a lot of work .... how much business you giving this agent? You can't expect full attention from the agent(s) unless you're providing them a significant portion of their income.

I wouldn't expect the agent to do this work for you. I would expect you to do your due diligence on the properties. You should tell the agent your budget and what you are planning to do (flip, rent, etc) and ghey can give you houses that fit this criteria, however I wouldn't expect (or even want) an agent to go through these 70% rule math, or rental math, that's for you to do.

Originally posted by @Brian Garrett :
Originally posted by @Brie Schmidt:

@Brian Garrett- The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

I'm aware those are just BP rules of thumb that's why I didn't list them in my criteria but instead I tried to explain them.

I also understand finding a deal that doesn't need rehab for 70% of FMV is a long shot however it is still possible.

Would you mind providing me an example of the type of criteria investors send you? That would be more helpful.

 It doesn't matter what criteria they send me.  They first need to understand what the market can deliver.  So I explain to them what a good deal looks like, what type of capital they are going to need, what kind of budget they are going to need, ect.  

Then it is up to them to decide if that meets their criteria.  If not they either need to find another market or waste someone's else's time trying to find a pet unicorn

In my market, if you aren't prepared to offer over list price then there is no reason to work with you.  Anything good sells $20-$50k over list price in a matter of days.  I had two clients offer on properties last week without ever seeing them and $30k+ over asking price.  That is what it takes in my market (Chicago) so you need to understand first what it takes in yours.  

Originally posted by @Matt K. :

That's a lot of work .... how much business you giving this agent? You can't expect full attention from the agent(s) unless you're providing them a significant portion of their income.

I plan to eventually provide majority of their income as I scale. I guess I just need to find someone aligned with my goals.

Originally posted by @Brian Pulaski :

I wouldn't expect the agent to do this work for you. I would expect you to do your due diligence on the properties. You should tell the agent your budget and what you are planning to do (flip, rent, etc) and ghey can give you houses that fit this criteria, however I wouldn't expect (or even want) an agent to go through these 70% rule math, or rental math, that's for you to do.

 So what value does a realtor add? I don't need them to simply send me everything on the market. I can see that myself.

Originally posted by @Brie Schmidt :
Originally posted by @Brian Garrett:
Originally posted by @Brie Schmidt:

@Brian Garrett- The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

I'm aware those are just BP rules of thumb that's why I didn't list them in my criteria but instead I tried to explain them.

I also understand finding a deal that doesn't need rehab for 70% of FMV is a long shot however it is still possible.

Would you mind providing me an example of the type of criteria investors send you? That would be more helpful.

 It doesn't matter what criteria they send me.  They first need to understand what the market can deliver.  So I explain to them what a good deal looks like, what type of capital they are going to need, what kind of budget they are going to need, ect.  

Then it is up to them to decide if that meets their criteria.  If not they either need to find another market or waste someone's else's time trying to find a pet unicorn

In my market, if you aren't prepared to offer over list price then there is no reason to work with you.  Anything good sells $20-$50k over list price in a matter of days.  I had two clients offer on properties last week without ever seeing them and $30k+ over asking price.  That is what it takes in my market (Chicago) so you need to understand first what it takes in yours.  

I disagree in this approach but seeing that you are a turnkey provider it makes sense why you would feel this way.

If your criteria is buying at 70% at market value for a property that doesn't require rehab, then an agent has no real incentive to work with you unless you're buying at a really high volume. If an agent knew of a 1% property on the market in a good neighborhood that was 30% off, I'm sure they would have no problem finding a different buyer willing to pay 80% or 90% for it. 

If you're looking for your agent to find you these kinds of off-market deals, then it's probably not going to happen either. I'm not trying to sound bitter, but I hear this conversation all the time in the WA market and it really disregards the work that goes into finding deals.

When an agent finds an off-market deal, they are going to have the most incentive to get the listing and sell it for what it's worth on the market. For the 70% off example, you'd be asking them to decide between being your buyer's agent and taking 3% on a $160k commission, or listing it for $200k and getting 3% on the fair market value as the listing agent. If they like you enough they might take a 20% pay cut, but most won't. Even at 90% under market they still will be better off listing any property they find off-market. 

You should be able to pretty quickly analyze deals that they send you with the rental calculator on BP or elsewhere. I'd broaden your criteria a bit and then once you find a good agent and they get a feel for what you're after then you can narrow in the search a bit! 

Originally posted by @Ryan Evans :

If your criteria is buying at 70% at market value for a property that doesn't require rehab, then an agent has no real incentive to work with you unless you're buying at a really high volume. If an agent knew of a 1% property on the market in a good neighborhood that was 30% off, I'm sure they would have no problem finding a different buyer willing to pay 80% or 90% for it. 

If you're looking for your agent to find you these kinds of off-market deals, then it's probably not going to happen either. I'm not trying to sound bitter, but I hear this conversation all the time in the WA market and it really disregards the work that goes into finding deals.

When an agent finds an off-market deal, they are going to have the most incentive to get the listing and sell it for what it's worth on the market. For the 70% off example, you'd be asking them to decide between being your buyer's agent and taking 3% on a $160k commission, or listing it for $200k and getting 3% on the fair market value as the listing agent. If they like you enough they might take a 20% pay cut, but most won't. Even at 90% under market they still will be better off listing any property they find off-market. 

You should be able to pretty quickly analyze deals that they send you with the rental calculator on BP or elsewhere. I'd broaden your criteria a bit and then once you find a good agent and they get a feel for what you're after then you can narrow in the search a bit! 

Thanks Ryan I understand but a realtor should be incentivized to work with an investor knowing it will be consistent business unlike a one time end buyer. They also don't have to list it, filter out tire kickers, do a hundred showings, etc.

I see many advantages as to why a realtor would bring a deal to an investor over taking it to the retail market.

Originally posted by @Brian Garrett :
Originally posted by @Brie Schmidt:
Originally posted by @Brian Garrett:
Originally posted by @Brie Schmidt:

@Brian Garrett- The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

I'm aware those are just BP rules of thumb that's why I didn't list them in my criteria but instead I tried to explain them.

I also understand finding a deal that doesn't need rehab for 70% of FMV is a long shot however it is still possible.

Would you mind providing me an example of the type of criteria investors send you? That would be more helpful.

 It doesn't matter what criteria they send me.  They first need to understand what the market can deliver.  So I explain to them what a good deal looks like, what type of capital they are going to need, what kind of budget they are going to need, ect.  

Then it is up to them to decide if that meets their criteria.  If not they either need to find another market or waste someone's else's time trying to find a pet unicorn

In my market, if you aren't prepared to offer over list price then there is no reason to work with you.  Anything good sells $20-$50k over list price in a matter of days.  I had two clients offer on properties last week without ever seeing them and $30k+ over asking price.  That is what it takes in my market (Chicago) so you need to understand first what it takes in yours.  

I disagree in this approach but seeing that you are a turnkey provider it makes sense why you would feel this way.

 I am not a turnkey provider.  I own 30+ properties / over 90 units and a brokerage company in two states that only works with investors.  

You can want whatever you want.  What I am trying to tell you is that means nothing if you do not know what your market delivers.  You are going to waste your time if you think you can dictate a criteria without understanding what is realistic in that market.  

I want a 100+ unit property that is a 10% cap rate with a value add opportunity in a A class market.  Ask any syndicator in any market in the US for that and they will laugh, literally, in your face.  What you want and what you can get are two different things, hence why I call it a pet unicorn.  

Originally posted by @Brie Schmidt :
Originally posted by @Brian Garrett:
Originally posted by @Brie Schmidt:
Originally posted by @Brian Garrett:
Originally posted by @Brie Schmidt:

@Brian Garrett- The 70% rule and 1% rule are BP rules of thumb, they are not industry terms that people use outside of BP.  As a realtor who works only with investors, I spend a lot of time upfront talking about market expectations.  

If you were in my market and sent me this, I would probably have a short conversation with you and tell you that you need to change your criteria or change your market (I know nothing of Florida so I don't know if what you are asking for is realistic)

You have a better chance of having a pet unicorn than finding a property that doesn't need a rehab for 70% of market value.  

So instead of telling agents what you want, try asking them what to expect in that market within your budget.  Listen to what they are saying about inventory, sub markets, timing ect

You could be totally spinning your wheels by trying to find something that doesn't exist

I'm aware those are just BP rules of thumb that's why I didn't list them in my criteria but instead I tried to explain them.

I also understand finding a deal that doesn't need rehab for 70% of FMV is a long shot however it is still possible.

Would you mind providing me an example of the type of criteria investors send you? That would be more helpful.

 It doesn't matter what criteria they send me.  They first need to understand what the market can deliver.  So I explain to them what a good deal looks like, what type of capital they are going to need, what kind of budget they are going to need, ect.  

Then it is up to them to decide if that meets their criteria.  If not they either need to find another market or waste someone's else's time trying to find a pet unicorn

In my market, if you aren't prepared to offer over list price then there is no reason to work with you.  Anything good sells $20-$50k over list price in a matter of days.  I had two clients offer on properties last week without ever seeing them and $30k+ over asking price.  That is what it takes in my market (Chicago) so you need to understand first what it takes in yours.  

I disagree in this approach but seeing that you are a turnkey provider it makes sense why you would feel this way.

 I am not a turnkey provider.  I own 30+ properties / over 90 units and a brokerage company in two states that only works with investors.  

You can want whatever you want.  What I am trying to tell you is that means nothing if you do not know what your market delivers.  You are going to waste your time if you think you can dictate a criteria without understanding what is realistic in that market.  

I want a 100+ unit property that is a 10% cap rate with a value add opportunity in a A class market.  Ask any syndicator in any market in the US for that and they will laugh, literally, in your face.  What you want and what you can get are two different things, hence why I call it a pet unicorn.  

Again I understand your perspective but you don't know my market so you are simply making assumptions.

This thread isn't about what type of deals exist in my market. It's about sending criteria to realtors so they can vet deals.

@Brian Garrett - Understand.  What I am telling you is that your criteria does not matter if your expectations are not realistic.  

So before you set your criteria you need to understand what a good deal is in your market.  You will never find an agent that takes you seriously if you are asking them for the impossible.  

So instead of telling them what you want, first listen to them on what is realistic in the market.

You keep telling people with WAY more experience than you how they are wrong.... have you stopped to think maybe YOU have the wrong approach? Obviously what you're doing isn't working which is why you made these threads asking for help...

Originally posted by @Brie Schmidt :

@Brian Garrett - Understand.  What I am telling you is that your criteria does not matter if your expectations are not realistic.  

So before you set your criteria you need to understand what a good deal is in your market.  You will never find an agent that takes you seriously if you are asking them for the impossible.  

So instead of telling them what you want, first listen to them on what is realistic in the market.

I know what is realistic in my market. I'm looking for a realtor to help present those deals and opportunities.

Originally posted by @Matt K. :

You keep telling people with WAY more experience than you how they are wrong.... have you stopped to think maybe YOU have the wrong approach? Obviously what you're doing isn't working which is why you made these threads asking for help...

I don't think YOU are understanding my point that's where the disconnect lies.

Also please don't tell me what I'm doing isn't working based off ONE example.

Why don't YOU contribute to the thread by simply giving me an example of YOUR criteria?

why don't you just become your own agent?

@Brian Garrett my agent makes the calls, schedules the showings, writes up the offer/binder and does a lot of calling and discussing with the selling agents on houses I am making offers on. i confirm my ARV thoughts with my agent, however I always run my own numbers.

I guess I really don't expect my agent to do much more than help with schedule, negotiations and very basic ARV thoughts. That's what his business is, not knowing rehab numbers or rental percentages.

Originally posted by @Brian Garrett :
Originally posted by @Matt K.:

You keep telling people with WAY more experience than you how they are wrong.... have you stopped to think maybe YOU have the wrong approach? Obviously what you're doing isn't working which is why you made these threads asking for help...

I don't think YOU are understanding my point that's where the disconnect lies.

Also please don't tell me what I'm doing isn't working based off ONE example.

Why don't YOU contribute to the thread by simply giving me an example of YOUR criteria?

 You missing the point here.... by a landslide. 

I would send this to my realtor

https://www.redfin.com/MO/Kansas-City/8207-Grand-A...

I would then verify with him the rent range that I've already established of 1100-1200 as accurate. I would discuss the type of renter I could expect and if this was a good fit for the area. I don't want the nicest house on the block nor do I want the worst, I need something that is rent ready with minimal expense but if I was to sell it later on I could do a value add.

Let's assume realtor agrees with my numbers, he will go preview it for me. He's going to walk it and see if it's actually in good shape or it's not actually as nice as the photos. If it's in bad enough shape we skip it on to the next. Now, let's assume it's in good shape ready to go and vacant. Well I'd lean on the realtor to tell me that hey it needs this and that and it won't pass FHA inspection but it should pass appraisal. Now we know we can go in conservative on our offer and IF it goes to someone actually wanting to live there w/ minimal down payment we'll have a strong position as back up offer. Moving on, we asked to submit best and final... again work with agent to fine tune the offer. Let's say we do short close, short inspection, and high Ernst money.... Then the realtor follows up and keeps in contact w/ the transaction and I go about my day.............


See, I can find the deals, it's far more likely I'll find it then they will. I know what I want and know what exceptions I can make.... what I need from the realtor is technical/local guidance and boots on the ground. I need them to tell me hey do this or that to your offer to make it strong, let me call blah blah.... 

In the end I don't expect much out of them when they are getting 3% of 120k or lower if we go under list. I do however expect quick turn around on my direct questions of something like  let's offer 110k and go for 1300 rent... they'd say sure or no do 105, 1100 rent.

It took me longer to type this than find that house

Originally posted by @Brian Garrett :
Originally posted by @Brie Schmidt:

@Brian Garrett - Understand.  What I am telling you is that your criteria does not matter if your expectations are not realistic.  

So before you set your criteria you need to understand what a good deal is in your market.  You will never find an agent that takes you seriously if you are asking them for the impossible.  

So instead of telling them what you want, first listen to them on what is realistic in the market.

I know what is realistic in my market. I'm looking for a realtor to help present those deals and opportunities.

 Great!  Good Luck!  I can tell your criteria is realistic based on the data

Originally posted by @Victoria Gibson :

why don't you just become your own agent?

I've thought about it. For now I'll represent myself and deal directly with sellers agents and go from there.

Originally posted by @Brian Pulaski :

@Brian Garrett my agent makes the calls, schedules the showings, writes up the offer/binder and does a lot of calling and discussing with the selling agents on houses I am making offers on. i confirm my ARV thoughts with my agent, however I always run my own numbers.

I guess I really don't expect my agent to do much more than help with schedule, negotiations and very basic ARV thoughts. That's what his business is, not knowing rehab numbers or rental percentages.

Realtors should certainly know market rents and general comps for an area. If they are simply making calls and setting up showings for properties I found myself and did all the due diligence on myself then they are an assistant at that point, not a realtor. I'm just playing devils advocate here. A realtor should earn their commission not be handed it.

Originally posted by @Matt K. :
Originally posted by @Brian Garrett:
Originally posted by @Matt K.:

You keep telling people with WAY more experience than you how they are wrong.... have you stopped to think maybe YOU have the wrong approach? Obviously what you're doing isn't working which is why you made these threads asking for help...

I don't think YOU are understanding my point that's where the disconnect lies.

Also please don't tell me what I'm doing isn't working based off ONE example.

Why don't YOU contribute to the thread by simply giving me an example of YOUR criteria?

 You missing the point here.... by a landslide. 

I would send this to my realtor

https://www.redfin.com/MO/Kansas-City/8207-Grand-A...

I would then verify with him the rent range that I've already established of 1100-1200 as accurate. I would discuss the type of renter I could expect and if this was a good fit for the area. I don't want the nicest house on the block nor do I want the worst, I need something that is rent ready with minimal expense but if I was to sell it later on I could do a value add.

Let's assume realtor agrees with my numbers, he will go preview it for me. He's going to walk it and see if it's actually in good shape or it's not actually as nice as the photos. If it's in bad enough shape we skip it on to the next. Now, let's assume it's in good shape ready to go and vacant. Well I'd lean on the realtor to tell me that hey it needs this and that and it won't pass FHA inspection but it should pass appraisal. Now we know we can go in conservative on our offer and IF it goes to someone actually wanting to live there w/ minimal down payment we'll have a strong position as back up offer. Moving on, we asked to submit best and final... again work with agent to fine tune the offer. Let's say we do short close, short inspection, and high Ernst money.... Then the realtor follows up and keeps in contact w/ the transaction and I go about my day.............


See, I can find the deals, it's far more likely I'll find it then they will. I know what I want and know what exceptions I can make.... what I need from the realtor is technical/local guidance and boots on the ground. I need them to tell me hey do this or that to your offer to make it strong, let me call blah blah.... 

In the end I don't expect much out of them when they are getting 3% of 120k or lower if we go under list. I do however expect quick turn around on my direct questions of something like  let's offer 110k and go for 1300 rent... they'd say sure or no do 105, 1100 rent.

It took me longer to type this than find that house

I'm not missing the point of my own thread, you are. With that being said I understand exactly what your process is and I'm glad you found a system that works well for you. It doesn't mean it's right for everyone. Keep up the good work!

Originally posted by @Brie Schmidt :
Originally posted by @Brian Garrett:
Originally posted by @Brie Schmidt:

@Brian Garrett - Understand.  What I am telling you is that your criteria does not matter if your expectations are not realistic.  

So before you set your criteria you need to understand what a good deal is in your market.  You will never find an agent that takes you seriously if you are asking them for the impossible.  

So instead of telling them what you want, first listen to them on what is realistic in the market.

I know what is realistic in my market. I'm looking for a realtor to help present those deals and opportunities.

 Great!  Good Luck!  I can tell your criteria is realistic based on the data

That data is how you determined my criteria being reasonable or not in my market? LOL!

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