What questions to ask the agent

Question

I'm buying a duplex and just got  pre approved for the loan. I have found a property I like and have contacted the agent. We are viewing the property this Friday. What are things I should look for and what questions should I ask ? The rooms are currently rented. Also should I get an agent ?

Jay Helms · Answer

In case you aren't able to find a realtor by Friday @Aziz Bangurah, a few questions to ask:

• Historical & current rent rolls
• P&L for last 12-36 months
• copies of current leases &  expiration dates
• last time current tenants had a rate increase
• who is responsible for utilities and grounds keeping (tenant or landlord)

I have a spreadsheet on my site for small multifamily book keeping. Great for beginners who want to know and learn their business. I'd like your feedback on it.

Casity Kao · Answer

@Aziz Bangurah How many investments do you own and where are they?  If not in the same city that you are investing in do they know what is necessary to get rental certifications if needed, if not will they guide you to the answer or just tell you to call the city.  Do they give you advice on exit strategies and values adds.  If they say the property is a great investment, ask them why, and ask for a breakdown of the numbers.  It is always a red flag when realtors say a property would make a great investment but cannot clearly justify why.  I would be careful to use the listing realtor because there goal is to sell the property, not necessarily to help you get the best deal but that does not mean they are not the right person.  What type of support can they give you to invest more?  Contractors? Captial?

Andrew Johnson · Answer

@Aziz Bangurah Some of this just has to do with your level of confidence.  Sure, you can go through a seller's agent if you know what you're looking at, know what you want, know the market, etc.  It's a little unlikely that buy doing that you're going to save any money.  The agents are paid by the seller and maybe the seller saves 1% (5% instead of 6% commission) but it's negligible and you'll never see their real estate agreement to verify.

If it's a first investment (I'm guessing it is since you're asking what questions to ask) you're probably better off finding an agent to represent you.  If for no other reason that it's another set of eyes.  Someone else to tell you if rents seem reasonable, how the area is doing, etc. and they'll know how good the deal is...or isn't.  I'm guessing there has to be some agent from Lexington cruising around BP that would be happy to assist you.

My suggestion would be the drive the neighborhood and look at the "for sale" signs.  If you start to see a pattern of 2 or 3 agents with multiple listings in the area, well, those are the people that I would call first.  It's a local business and it helps when they know the local market.  Talk to 2-3 agents and see where you end-up.

John Warren · Answer

@Aziz Bangurah as an agent myself, I know that this is the dream come true for the agent. Most agents in this situation get to work with both the buyer and the seller. The seller is typically paying a 5-6% commission, and the listing agent would normally split this with the buyer's agent. If the listing agent shows you the property, they are then entitled to the whole commission. This does not align their interests with your though!

You should immediately try to find an investor friendly agent who knows rental properties. Have them show you the property so you really have them on "your side".

What questions to ask the agent

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