Find a good agent and wanting to buy at a low price point.

Buying & Selling Real Estate
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Find a good agent and wanting to buy at a low price point.

Nicholas Morris
Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes

So I live in CA and I want to buy a couple properties under 50k in the next couple months. Does it seem likes its hard to get a good agent (theyre busy) when you are at a low price point. I conctacted one agent through redfin and the first thing he told me was, if youre not active I wont have time for you. I told him. Id like to get 100k ish total in the next couple months. No response, no return on my phone call. Like wow.

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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
14y

Look for a hungry agent rather than a busy agent. Plan to do some of the legwork yourself.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    A $50K property is going to net the agent $1000. Maybe. You're not going to get much enthusiasm for that level of payback.

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  • Nicholas Morris
    OP
    Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes
    14y

    So does that mean its going to be hard to get an agent that wants to spend some time on you if youre at that low of a price point?

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  • Edward Hooks
    Real Estate Broker · Castle Rock, CO · Member since 2011 · 22 posts · 4 votes
    14y

    Clearly clueless. $2k a few times a year for pushing contract paper and a few searches is better than $5k once a year -mentally & fiscally.

    There must be better options than Redfin. If I were out-of-market looking, I might start with the agents that have the REO's on the market today (They generally get them in groups) - They may be SignSquatters, waiting for the Buyers Agents to come sell the places - but they DO KNOW where the distressed assets are.

    My reaction to the RedFink...NEXT!

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    Look for a hungry agent rather than a busy agent. Plan to do some of the legwork yourself.

    1Reply
  • Brad Z.
    Investor · Member since 2009 · 132 posts · 30 votes
    14y

    Why not just use the listing agent in these types of situations? Its going to give you the best chance of getting your offer accepted anyways. If you are wanting a great deal, chances are you are going to be writing a bunch of offers and that can wear an agent out. It may be a little more leg work on your end to keep using listing agents but they will be motived to get both sides of the commision.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    "I contacted one agent through redfin and the first thing he told me was, if youre not active I wont have time for you."

    At least the broker/agent was HONEST.

    Your expectation of finding a seasoned broker to put time in for those kind of returns is unrealistic to me.

    Find a newbie as mentioned and then you can run them ragged for a low fee as they do not know any better.

    If you are trying to buy at 50,000 and the broker you talked to has tons of buyers at 70,000 then they don't need your low ball offers.They are getting business all day at a higher price point offer and closing it.

    You need to make sure you are not trying to find a needle in a hay stack (look all year and might find one property to buy). Now if that purchase was 10 million I might look around and see if I get lucky.50,000 on a pipe dream there is no way.

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  • Nicholas Morris
    OP
    Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes
    14y

    Ok Joel I think you answered my question, Its unrealistic to get a solid agent for an out of state investor at a lower price point. I like the going straight to the listing agent. I think I will do that. The only problem I have right now is I dont know what the areas out there are like yet. I have a good idea on rental rates by looking at rental rates on craigslist and looking at what tenant occupied properties say there rents are. I dont think that is as good as someone that lives in the area and can you tell you "that area is going to get lower rent" etc.

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  • Tahani Aburaneh
    Waterloo Region, Ontario · Member since 2012 · 11 posts · 6 votes
    14y

    I agree with Jon. look for an agent who wants your business as much as you want his service. Look for new agents who are willing to do the extra work and you can train them.. I actualy talk more about that in my book. There is an agent out there that would love your business.. change your mind set from who wants to work for little money to who is willing to create a long term realtionship that both of you can win .. good luck

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Nicolas: why are you looking out of state for $50K properties? There are TONS in CA. What kind of rents are you looking for? I just sold a 3/1 that closed yesterday for $36K. The buyer, a landlord who owns other rentals in the area, will spend less than 10K to get it up and running as a rental at $800/mo.

    That buyer, BTW, has an aggressive buyer's agent looking for deals for him, and he's only bought two this past year. The agent only made $1100 on that deal. I sold an FSBO property in January for $95K to a buyer who had an agent find him the deal and he only paid the agent a finder's fee of $1500. All the agent did was show it to his investor and call and say they would pay my price. I wrote the contracts and did the paperwork. The agents work for this kind of money because they want more business in the future and because it's not that hard if you don't have to run around showing people properties. Both times those agents knew exactly what their buyers wanted and they were the first ones there and offered full price.

    I suggesting getting really clear about what you are looking for, what you bring to the partnership and call around your farm area until you find an agent who wants the business. If you are not an experienced buyer, and need a lot of agent support, you might not get it in that price range. As for contacting listing agents directly: in my area the REO agents do not usually work with unrepresented buyers unless they know them. You'd think they would want the entire commission. But they are volume operators and they can't/won't spend time with buyers. You'll have to check out your area to get a feel for what's going on there.

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  • Nicholas Morris
    OP
    Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes
    14y

    Where is california are you seeing properties that can do the 50% and 2% guidelines?

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    14y

    There is no place I know of in CA where the 2% rule will work. Just FYI, must CA investors are investing in other cities around the country for a reason.

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  • Nicholas Morris
    OP
    Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes
    14y

    Yeah thats what i was thinking curt.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    I sold a fixer 3/2 SFH to one of my regular landlord buyers in May of last year. He paid $35K. Total rehab, gutted kitchens and baths, all new plumbing, electrical and he added central air/heating. He's now in for a total of $60K. It's rented for $1150, which is Section 8 rent for a 3BDR in this area. This is probably his 30th rental property. He manages them himself and he always does a total rehab. He's very talented and he's got cheap crews and he can do more with $25K than anybody else I know. I've sold him ten others, some of them duplexes and tri-plexes.

    He'll definitely run it at below 50% of gross rents, way below. And he's pretty close to 2%. It can be done. Even without that kind of rehab. A 50K property that rents for $1000 is not that hard in CA. Takes some deal finding, but it can be done.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Yep, let's all just sit around and say that there's no rental deals in CA. Leaves more for everyone else. :) No offense, but was there was any truly comprehensive research on the part of the nay sayers here? CA is a big state with many different markets.

    In January I bought a 1500 square foot 3/2 for $65K. It was in a decent neighborhood, which is not the norm for me. It needed nothing but carpet and paint to make it rentable in the $1200 range. I don't keep rentals in that town, but it was tempting to keep it. I did clean-up, paint and changed out the counters and then sold it for $95K (to an investor).

    It's not my job to convince anybody that there deals in CA. But I do suggest not just repeating what you've heard and doing some real research.

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  • Randal McLeaird
    San Antonio, TX · Member since 2010 · 93 posts · 32 votes
    14y

    in order to help you find an agent that will work for you - call some of the large property managers in the areas you want to buy. sometimes they'll have homeowners who are ready to sell at a discount in order to offload their problem. also, you can ask them if they have any new agents in the office that need some business. the same applies to any of the larger offices. just call in and ask if they have any new agents. build the relationship with them and teach them to find what you're looking for. there are plenty out there.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Curt Davis: "Most CA investors are investing in other cities". Most? Can you back that up with anything? Many, maybe. But most?

    It's this kind of thing that makes it hard to have useful discussions about what can and can't be done. Let's stop repeating hear-say and start asking questions and comparing notes.

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    14y

    @K.Marie Poe, yes thats correct. Most of our clients come from CA and they all say the same thing. They have looked in CA and can not find anything like what we are doing here and in many other cities. If the average CA home sells for $250k-$400k ( from what my clients tell me ) I have a hard time believing deals like what you describe are that good. Surely they are possible but I would think there would be a ton of competition for them which would drive the price up. My info is backed up by many clients who live in CA informing me of the current climate there. Not sure if thats good enough for you. Oh yeah, upload a picture to give yourself more credibility and you will be taken more seriously.

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  • Michael Christopher
    Wholesaler · West New York, NJ · Member since 2012 · 7 posts · 2 votes
    14y

    Nicholas Morris
    To answer your original question and get back on topic...Does it seem like its hard to get a good agent? YES, it does SEEM hard. All that means is that you have to put in some work to find a good one that's willing to work with you. Agents are a dime a dozen, good agents are a nickel a dozen. In my area, everybody and their mom is an agent or lawyer. Trust me, they're just as hungry as you are. If you call one and they don't want your money, that's fine...PICKUP THE PHONE AND CALL ANOTHER ONE.

    And by all means, don't let one agent that turned you down discourage you. And surely don't let a naysayer in this forum tell you it can't be done or it's not worth it. Just because they can't do it or haven't been able to pull it off, I guarantee you there's someone out there that is. So Pull Up Your Skirt and Find An Agent That'll Work With You.

    Hope that helps. Thx.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Curt Davis You're seeing the people that come to you from CA, not most CA investors. You said most investors in CA are investing out of state. You have no way of knowing that.

    I'm not too worried about being taken seriously or having credibility here. I'm here to learn and to share what I know. My name and corps and purchases and sales are all public information in CA. If what I say doesn't ring true, a picture won't help. You have a picture and I still question some of your facts. :)

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  • Rusty Thompson
    Real Estate Investor · Salem, OR · Member since 2011 · 422 posts · 149 votes
    14y

    I'm with Brad, know a buyers agent, but contact the listing agent. If the listing agent does not sell, ask them for a referral. You want them to have every reason to "move" the property along. A double commission or a referral fee is some pretty strong motivation.
    [u]
    This is my strategy for MLS listings[/u]
    - Find a list of properties.
    -Do my due diligence which usually includes Google street view to see if its something I want & to narrow my list.
    -Contact listed agents to set up appointments, try & schedule viewings for the same day.
    - Make offer with agent, or if they are a broker my agent, but I give them the referral fee. If they are not comfortable with using my agent and getting a fee, then I use someone they actually recommend .
    - If I can't contact the listing agent I contact one of my agents and go through the process with them.

    Reasons why...
    Agents are horrible at communicating in my experience. Someone else in the chain, just makes it that much harder.
    Your building relationships. When you are using your agent, then your agent is handling everything and you may never meet the other agent. Make it personal, they might not recognize you next time, but eventually you will know everyone in your market, & know how they do business.
    Quick response time, I usually get replies that day. Again "telephone" just makes it that much harder.
    Outside the box most people use a buyers agent, if you use one then you are in the same playing field.
    Most importantly IT WORKS. I spent 6 months trying to get a offer accepted when I started. Using a good buyers agent. I closed two in two months when I started using listing agents. Which is the only reason I nee

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  • Jake Kucheck
    Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
    14y

    Ok this is ridiculous.

    In my retail market, the median price for a home is $1.4MM. In the market I flip in, our median acquisition price is about $65K. The "average" price for a home in CA is not particularly meaningful, unless you have clients that represent a simple random sample of all of CA's counties, then take the mean of those medians and add in coefficients to allow for unevenly distributed populations.

    Guessing that's not what you did.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    The OP was posting about agent challenges, especially since he is trying to buy from out of state. I understand wanting to invest out of state since there are benefits that aren't entirely price related. Some rental pools are more desirable than others. Some housing stock is more desirable than others. Some states are more landlord or more tax friendly than others. But when I asked why the OP was going out of state, he said there were no deals in CA. Hopefully others reading this thread will benefit from others' opinions and experiences.

    Jake Kucheck I think those of us that live at the CA coast (I live in Santa Barbara) and have ventured to the other side of the ridge or into the desert know full well that CA is vast and varied. More expensive, comparatively speaking, than many other states for the same unit, but rents in many areas are higher as well. If you take only Fresno, Sacramento, Stockton, Modesto and Bakersfield that's a few million people living in places where the median is much, much lower than the state median.

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  • Nicholas Morris
    OP
    Homeowner · Beaumont, CA · Member since 2010 · 37 posts · 4 votes
    14y

    I never said they werent available in CA but they are hard to find are in really crappy neighborhoods from what i can find. I asked where are you finding these deals? I can find these sort of deals in places like desert hot springs (very bad area.) If there is something within 5 hours of me that has the same cash flow as spots like vegas and phoenix, Im all ears. This thread seems to have turned into a CA vs out of state argument which isnt my intention. I appreciate the suggestions. I like the ideas of going with the listing agent.

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    I'm not so good with mileage but I think all of the cities I listed above are less than 7 hours from you.

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  • Monica Breckenridge
    Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
    14y

    Here is what I just posted on a similar Post:

    I have had absolutely no luck in my market working with realtors or finding any good deals on the MLS. Most realtors you come across are going to be either very successful and are already too busty to find deals for you, or unsuccessful and lazy. It takes a special personality for realtor to want to work with an investor just writing offers on the MLS. It does take a lot of work looking at the houses and most of the offers are going to get rejected. So their paycheck isn't going to come as often as they used to. In my market there are no deals 70% below market on the MLS. They are all getting bid up by investors and going way over asking price. I get outbid every time. When I look to see what the investors bought the house for I estimate their profit to be only $5k. Flipping houses it to risky for only $5k profit.

    For some reason on the realtors I have talked to expect me to bring them the deal not them to bring me the deal. Its very frustrating. So now I look for my own deals and have been doing so for 5 years. Every once and a while I network with realtors to see if they would hand me deals but they don't.

    I market to people to buy their house and avoid foreclosure. This is how I get my deals. I am in full control of the deal and I don't need to compete with other fish in the see to bid up the offer. This is how I am able to get deals under 70%.

    1Reply
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