Do you all use realtors when buying for BRRRR?

Question

Hi everyone, new to BP and to REI. I'm mainly interested in BRRRR in Southern Ontario, but I'm wondering if most investors who do this save on closing costs/comms by buying without a realtor or do your numbers typically work out anyway even paying realtor commission?

Cheers

Leandro Zhao · Answer

Hi Chris,

Do you have any recommendation on how to find houses that are off-market? I've been sending my email to those website of "we buy houses" but no leads at all.

Huong Luu · Answer

@Aldo Gutierrez If you have little experience in buying, then you should definitely consider using a GOOD realtor. A good realtor will check zoning, comps, further potential, ask the right questions, contact other people as required (ie permits, etc) and assist you in getting the getting price. Not all realtors are the same.

Keep in mind, in most areas, the buyer doesn't pay the realtor fee. However, there are areas where the buyer has to pay the realtor. So some owners who are doing 'for sale by owner' will not want to deal with a buyer's agent because then they have to pay 1-2.5% from the sale of the property. If the seller is using their own agent, if you come in without an agent, the seller still might have to pay 3-4% to their agent, so there is no savings to them. And you can't negotiate a lower price b/c you don't have an agent.

If need more clarification, don't hesitate to message me.

Ming Lim · Answer

@Aldo Gutierrez - I'd say it depends highly on the market your investing in. Some areas of Southern Ontario, there are plenty of good off-market properties. Also, if stakes a low for you (it's a cheap property relative to your financial situation), then mitigating your risk by having an experienced investor realtor might not be worthwhile to you. However, if you're investing in a complex market like Toronto (where I invest) and stakes and risk are higher ($1.2-1.3MM homes, $450-500k renos, $2MM AVR's) then you should absolutely be working with a top notch team.

Roy Cleeves · Answer

Usually there is no fee for the Tealtor to assist you in the purchase as the seller pays the commission to the Realtor and not you.   The key is to get the deal where the numbers work.

Good luck!

Chris Muller · Answer

It all comes down to price.  You make your money on the purchase - buying too high and you’ll struggle to make a profit, get good cash flow etc.

If the numbers work with a realtor - great.  If you choose to work without one - make sure you know how to do all of your own due diligence (which you should do anyways) on the property.