All Forum Posts by: Bill Patterson

I glance at the number of influence points and make a mental note of the ratio and "Member Since" date. If I'm not familiar with the poster, I'll then have a quick idea of their influence. It's not how many points since some members have more posting time than others!
Bill

The world is full of "experts". The good people in any field are able to determine good information from bad. Realtors are no exception! Probably no one pays any attention to that Realtor anyway!
Bill

Bryan, I think it is closer to being called "economics"! Bryan A. has the right idea. Add a bonus to the buyer's agent's contracted 3% with his client and you have "economics" on your side!
Bill

You should get the agency discussion out of the way first thing! I am all for buyer's agency. Make sure that they are working for you! It won't cost you any more, but can save not only $$$, but in lots of other ways not related to price. Quality of schools, is it a declining neighborhood, does that builder have a good reputation, etc. Your buyer's agent will help you with all of these. Expect to sign an agency agreement with them.

On the other hand, if I was your buyer's agent and after working with you I thought that one of my listings was a good option I would still show it to you! I would then be working as a dual agent and would be comfortable in doing so. The only difference would be that if I knew any "confidential " information that could affect what you would offer or what the seller would sell for, I would not share that information with the other party. In single agency, I would not know this information about the other party, so you would not expect me to share it with you anyway! I would also have you sign another agency form to deal with the dual agency on that property.

This is not to say that all agents would be able to handle the ethics of dual agency. Remember, if your agent is telling you "I shouldn't be telling you, but....", he will probably be keeping your situation just as close!
Bill

Hi Christopher,
The short answer is.....For sale by owner saves an average of about 6% of the sales price. That being said, there are a lot of factors that determine the amount of money saved, if any.
• Do you have the expertise and time to market the property?
• Do you have the ability and time to get current comps to make sure you know where to price the property and what is a good offer to accept?
• There is a common expectation that a FSBO will sell for less because there is no real estate agent to pay. If you are not on top of your comps, you can accept too low of an offer.
• Do you have all of the contracts, disclosures, etc. that are needed for a real estate transaction or will you be getting these from an attorney?
• How much do you value your time, since you will be doing the work of the agent?

As you can see, the long answer is not quite so clear! If you are comfortable that you can address the above factors, than a FSBO can save you money. If not, listing with a broker may just net you more than if you did it yourself. It’s like any other service that you may consider, stock broker, lawn service, plumber, you name it. You can do most anything yourself, but you need the right tools and knowledge as well as the time to do it. I value my time at a pretty good rate, too!
Bill

Hi David,
Either of the courses you mentioned may help in identifying what repairs may be needed, but I doubt that either would help you with costs. The best bet is to review your past rehabs and take costs from them. Similar repairs should be able to be estimated from those costs. Either that or work with a contractor that you use for the rehab and get his estimate for things that you have not encountered yet.

You will always get surprises, though!
Bill

Jak,
Cash flowing 25%......I'd stick to the East Bay area! Just curious…how much down on each 4-plex did you go? When I do a pro-forma I always figure it at 100% financed. You have to make a return on your cash down, too! I would also take it a bit easy to see how things go for a few months. Nick's right, don't deplete your cash. IRA's are expensive $$$ and should be used only for a last resort! Look around Bigger Pockets and see what options are out there and ask questions. That will give you a good idea of what other options you may be interested in.

Sounds like you are off to a good start and doing well. Welcome to BP!
Bill

It depends on what you count as “closedâ€. If a spread can’t be achieved and you go directly A to C, I still count that as closed. It would be counted as closed in the statistics that you would pull off line, too. If you are talking about pure flips with no rehab, it all depends on:
• How well you know the current area market
• How good your negotiator is
• How good your listing agent is at establishing a true value for a quick sale
• If the market is stable, rising or falling
• How good of a job you do in communicating with sellers, agents, buyers, etc.
• Working with lenders to finance your C buyer is a must
• How efficient and fast you are in managing the flow of needed documents, etc.
• The work load of the lender
• Is there PMI
• The investor that owns the loan
• Murphy’s Law can hit you at any time!

Put it all together and it is a pretty good percentage, but you will never get them all! If you are doing 10%, get out of the business. You are doing the distressed seller a real disservice. You need to keep their interest first before your profit.
Bill

it. I am sure that the energy savings with a new boiler, outdoor temp reset, domestic hot water pre-heat, etc. would qualify for the rebates. Your energy auditor can also tell you ways to "tighten up the envelope" to save even more. I would expect a good pay back term on it. One thing to consider, would be that if you change any piping, there probably will be asbestos to deal with at least on the elbows.
Good luck,
Bill

Shari,
What I meant was for the investor client to make less on the spread or if the profit was totally taken up with 90 day funding costs, then look at an A to C sale where the A seller at least gets their short sale and C buyer gets their property. Sometimes in this business, as an investor you spend a lot of time and don't make any $$$. We would get the short sale and try to learn from the transaction and either stay away form First Horizon MetLife or have a plan in advance to overcome this problem. It sounds like that is what your client has decided to do….Good plan!
Bill