Do i have a good realtor and how am i doing

8 Replies

Good evening all,

Im a noob investor in the Tampa area and in need of advice on my realtor and if im on the right path. Two years ago we met our realtor on craigslist and he helped my wife and i to buy our first duplex in New Port Ritchie. It was our first and we just wanted to start the path. It was $135k, we used Regions and overpaid on the down payment; $40k, $3500 for repairs to bring it up to S8 code. As you would have it as soon as the renters moved in an issue came up with both AC units. $4500 later we were on our way to investors. Last year one asked for a cover over the exterior washer/dryer. So we added one for each side @ $1200 total. The tenants are still with us for a second term and no repairs or issues so far.

Used a HELOC to purchase our second last year in Busch/Nebraska area for $100k, $20k down and $1200 to repair the fascia. One tenant decided to stay at a higher rent and the other we are honoring until August so waiting to see what happens there. This property will require most likely a new roof in the near future, and we were prepared to put in $7k worth of work but tenant was fine with the way it was and he has been there for 13+ years. So if hes okay we are okay. If the second moves out we will update to S8 code and rent it out for more, currently at $500/month. First tenant is at $765. We pay water but is included in lease amount.

So here we are...

We were able to refi the first and pull $21k. We will use that as down payment for new property this year. But we are limited in the areas for obvious reasons. I think we could have gotten a better price for the second unit but it was a NET sale. We have sat down with the realtor and explained our goals to buy 1/yr and as we acquire more maybe 2/yr. We hope to buy two this year.

So are we on the right track? Is our realtor guiding us in the right direction? How do i know we are getting good deals? What signs should we look for that we can trust our realtor/investor? He is an investor realtor as he has come to us with off market properties. 

What area in the Tampa/St.Pete/New Port Ritchie are good places for me to invest? Our budget is limited as right now we can scrape roughly $20k a year for purchases and have enough for repairs. We are hoping this will be the first year to buy 2 properties. The goal is to reinvest our earning from all properties into other purchases.

Thanks for reading all this. I feel i need some guidance or even some reassurance.

Thanks,

Carlos

Hi Carlos, seems to me like the best way to know if you're getting "good" deals would be to spend time analyzing potential deals in the areas you want to focus in to know what a "good" deal even looks like. If you consider any property that cashflows 100/unit/month a good deal, but your area is averaging 300/unit/month cashflow for investment properties, then in reality you aren't going to get the best deals you could have.

Ultimately the one most concerned with your best interest is you, so if you feel like you aren't being brought the best deals by your realtor try to set criteria with them for what exactly you're looking for and let them do the leg work finding those kinds of deals. If you don't set a understand and set a standard for what a good deal is anything that cashflows can be misconstrued as a good investment.

Hi @Account Closed ,

I think they're doing a good job. It's tough to find deals now, so if they can find you deals that meet your return goals, they're doing a stand up job. You'd be unrealistic as an investor if you expected to get the best deal out there every single time. If the deal match your goals then great. 

I think you need a way better inspector, and your Realtor should be negotiating credits at closing for the issues found in the property. 

Good luck!

Thank you both for your response.

On the second property we were going to do $7k on repairs to clean it all up and get it up to S8 code. We did not use an inspector since our handy man went with us to look it over.

When he repaired the fascia he found the roof may have a couple years left of life. So add another $8k or so for new roof.

So maybe the issue is that I’m not negotiating these repairs. For instance, if it’s $100k for the property, is it fair for me to request $15k deduction from total price to cover expenses?

Maybe it’s me and not my realtor? Appreciate all your help!! :)

@Account Closed ,

Hire an inspector. I have a couple I can refer. I would NEVER spend $100,000 on something without spending $400 to make sure what I was buying was in sound condition. If your handyman is just a handyman, he isn't qualified to create reports that insurance companies need to create your policy (4 point inspections, wind mit etc.) An inspector's opinion holds more weight than a handy man's. If I was the listing agent for the house you were buying, and I was given a list of repairs by an unlicensed (inspector or contractor), non-ASHI member, I would let my Seller know that the list of repairs holds no weight. It's of an opinion of someone with no accreditation. 

You want a home inspector that is a member of the American Society of Home Inspectors (ASHI), that adhere to their high standards of ethics, training and overall quality. 

At the end of the day, you can negotiate to reduce the sales price, but I'd rather negotiate credit at closing towards closing costs so that's cash in hand, rather than saving a couple dollars a month since you'd be financing that difference over the life of your loan. Go ahead and ask for the reduction or closing costs that you want, (make sure your loan allows it, some loans max seller contributions up to 3%-6% of purchase price, talk to your lender). If the Seller agrees, great, if not, they'd at least counter that amount with some sort of alternate credit amount.

Originally posted by @Account Closed :

Thank you both for your response.

On the second property we were going to do $7k on repairs to clean it all up and get it up to S8 code. We did not use an inspector since our handy man went with us to look it over.

When he repaired the fascia he found the roof may have a couple years left of life. So add another $8k or so for new roof.

So maybe the issue is that I’m not negotiating these repairs. For instance, if it’s $100k for the property, is it fair for me to request $15k deduction from total price to cover expenses?

Maybe it’s me and not my realtor? Appreciate all your help!! :)

This is impossible to put a generalization on.  If a property needs $X in work, that doesnt mean the price should be list price minus $X.  The condition of the property may very well already be factored into the price of the property.  Or the fact that it needs work may, or may not have an effect on the market value of the property.

Every single house on the earth is going to have 3 major things that need constant replacement. The roof, HVAC and water heater.  Unless it is a new construction, these things have different life cycles and are never all going to be lined up at the same time. So every house essentially has one of these 3 components at the end of it's lifespan, thats just a fact of properties aging.

@Tom Parris

Thanks Tom, that means alot to my confidence. :) 

I will try to do better at negotiating credits. Ill admit im not a good negotiator. I will ask for contributions on my next one. Great pointer!

@Russell Brazil

Agreed.  It may be $100k because it requires rehab. We were glad to have reserves to fix the unforeseen items that have come up. Otherwise we would have been in trouble. :)

One last question...

Is it unethical to have more than one realtor looking for you? Is there some sort of unspoken honor system? I hear of investor having teams, just not sure if that pertains to realtors. 

Originally posted by @Account Closed :

@Tom Parris

Is it unethical to have more than one realtor looking for you? Is there some sort of unspoken honor system? I hear of investor having teams, just not sure if that pertains to realtors. 

 In general yes.  Someone shouldnt be working for you if someone else is going to get paid. Choose who you want to work with and work with them. Now if you were someone buying 2 properties a month and need a larger influx of properties, then you are in a position to use multiple agents, but thats probably not the case here.

Sounds like you're having a rough time.  Even though most realtors are not very good at negotiations, there are still a good bit that are, so consider using one that also has investment properties and is an experienced landlord.

FYI- and to be fair to the many good realtors, I also think....scratch that...I know most mortgage brokers are weaker than circus kool-aid too, but there are a few that have made it thru the housing crisis and still standing

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