All Forum Posts by: Andrew Johnson

Dan O'Neill It seems high to me, but I’m not in your market. I don’t pay a leasing or releasing fee but it plenty of markets that’s “normal”. I pay 10% of collected rents but if I were to go south, it would be 12%...west maybe 30 minutes it would be 8%. Others get 7% fees but that’s not what my market bears so it’s hard to fight the market. So what’s “normal” (in my experience) is somewhat market-dependent. 🤷🏻‍♂️

@Ryan E. I completely agree that you can’t be honest in one state and dishonest in another.  I have no idea how all of that works: company owned vs. franchises vs. affiliates.  Either way, your brand/reputation always skews to the lowest common denominator.  Which I think is why it’s great people ask about it.  I have no clue how it’s being pitched, skewed, clouded, etc.  I can’t imagine the Jacksonville team is shouting “LOOK AT OUR SUCCESS IN OTHER MARKETS!” from the rooftop.  Let alone, “Look at what our clients say on BiggerPockets!”  Definitely would love to be a fly on the wall for multiple deals in multiple states just to hear how it’s all dealt with, ignored, responded to, etc.  Not sure why I’m so oddly fascinated by it. 🤷🏻♂️ 

Ryan E. For what it’s worth, I think VERY few new people really do search on the forums. When someone does and asks a follow-up (reinvigorating the thread) it’s almost a license for the other new people to jump in with a question. For heavy users of the site like Jay Hinrichs you just see it over and over again. And he’s right in that it wouldn’t surprise me if the “Jacksonville rep” says “don’t listen to those Indy stories, it’s a completely different market”. So, naturally, those people then come on forums to ask about Jacksonville. I mean, half the ecosystem here has no clue that commercial debt is different than the loan they use for their own home! I’d also argue it’s actually a healthy thing for BP as a platform. The last thing you want is new people afraid to ask questions. Then then threads die, newbies are reluctant to search, and newbies end up uninformed.

Thawda Aung You need to rewrite your post. Are you writing your own bio to convince the seller that you’re legit? Are you putting together a bio of your investors for this $3 million deal? Are you sitting in the middle and trying to introduce the seller to a a buyer and the seller wants a bio on the buyer? I’m also not sure what cap-rate and price per door has to do with writing a bio. Are you trying to solicit investors on the forums? Are you trying to ask if you need a “land deal” investor with a bio for the seller to agree?

Christopher Haynes So you can’t quality for a commercial multifamily loan but you think you’ll qualify for a SFR portfolio loan? Even if you don’t have to today, an owner isn’t likely to give you a 30 year fixed-rate term. It will be a shorter term and you’ll likely have to seek bank financing when the balloon payment is due. Which, by the way, would be the same scenario with a commercial multifamily apartment. So I’m not quite sure where that gets you unless you’re planning to sell all of the 30+ SFRs that you buy 🤷🏻‍♂️ Anyway, the bigger challenge with looking at portfolios is that there are usually great properties, some dogs, and some dogs with fleas. If they were all good you could sell them conventionally and get more money. You wouldn’t need to do a portfolio sale, let along consider owner financing.

Joseph Szymczak II I don’t know that there’s a magic way to “buy low”. You could look off-market but then it’s time intensive, there are likely marketing costs, realtors don’t want to throw out horrible “low” offers for a newbie who has never closed on a investment property. So here’s my advice: Figure out what has disproportionately higher value to you. Is it a property within a 5 mile radius of you because it’s easy to manage? Do you think there’s an area primed for appreciation that others don’t? Would you pay more than the “average” investor for a 2015 build because you loathe the idea of cap-ex? All of this is pretty darn relative. But if you’re looking to buy for the long-term there are plenty of “good deals” on paper that might not be “good deals” to you.

Chuck Kramer Either way, the industry is doing just fine. You can’t knock a company for acquiring, growing, diversifying, and expanding. If pundits were right about recruiting, Monster would have killed it. If pundits were right about Zillow, realtors would be dying out. But it’s the economy that kills mediocre recruiters and it also mediocre realtors. And, ironically, when that happens the “dinosaurs” like Russell Brazil that will survive and thrive. If any of the technology solutions delivered, all of this would be a moot point. But they don’t. At least not yet and not in the foreseeable future. Relying on a Zestimate for a value is about as smart as relying on your Monster post for a critical hire. Or trying to use a paper towel to write your retained search engagement contract with Korn/Ferry on 🤣 Just kidding...nearly 20 years in the retained search and recruiting industry has gotten the better of me 🤷🏻‍♂️

Chuck Kramer Disagree on recruiting :) If you want data, just look at the stock price of Korn Ferry, Heidrick, etc. over the past 5+ years. They’re doing juuuuuuuust fine. Just like real estate, if there’s a recession things will slide, it gets tougher, but if your recruiting contacts can’t earn today...then they’re like the swaths of unsuccessful realtors that (also) can’t cut it in a commission industry 🤷🏻‍♂️🤣

@Jay Hinrichs Maybe your story is illustrative of one of the differences.  You and the Sac-town guy were having a "developer-to-developer" conversation.  In essence, you speak the same language but maybe with a slight difference accent. 

I think mine is driven from the "amateur" perspective.  I think I know a decent amount about real estate but I wouldn't be comfortable doing what you did.  It might also help that (if memory serves) your wife is a realtor.  Maybe that's a moot point, who knows :-)  But let's say I classify anyone with my experience level (or less) as "amateurs".  That's a really broad group of people that might have hesitations around customized contracts that would disproportionality value a standardized contract that my expert (i.e. realtor) has dealt with 100 times before.

But I do 100% agree that contracts are contracts.  There can be 1,000 ways to get the job done.  But I still think if I were looking at something "non-standard" for a sizable transaction I'd go down the lawyer route.  And if I didn't do it often I don't know that I'd have a "go-to lawyer" to review those things.

So then I'm back to find a lawyer, pay the lawyer, try to comprehend whatever the lawyer finds (or doesn't), etc.  And I do think that for the purposes of real estate transactions that a ton of people use realtors and their standard contracts, processes, etc. as a "stand-in" for a lawyer.  Just my gut feeling, no data supporting it!

Now if I was selling land for $5K a pop (I know that's not your game but some people do it via Craigslist) then I'd care less, a lot less, and might be groovy with anything DIYish.  So...there I am...now presenting myself as a hypocrite :-)

@Carrie A. I'd say the most logical place to start is the deal calculator on BiggerPockets.  If nothing else it helps to figure out what the "data entry fields" are that you need to know.  Then when it spits out a result you can go through (term-by-term) and as @Jon Holdman suggests, use the glossary.  Once you get a good feel for how that works you can start trying to look into different areas.  

For what it's worth, I think there are always two sides for real estate investment: what do buy and where to buy. You can find a ton of methodologies for determining each but if you're drowning in a haze of acronyms then I'd start with a deal analyzer. You'll start to learn the shorthand of ARV, CoC, ROI, cap-rate, etc. pretty quickly.

I think most of the language around "where to buy" is a lot easier to understand:  job growth, population growth, average household income, unemployment, school district quality, crime heatmaps, blah...blah...blah...