All Forum Posts by: Scott E.

It sounds too good to be true, which means that it probably is.

The seller offering you a 5% rate fixed for 10 years is unbelievable. Why are they willing to loan you such a large amount at such a low rate? And fixed for such a long time? Is this a friend or family member?

Ignoring the financing for a second, you didn't say much about the deal itself. How strong is the location? What is the tenant mix? Sounds like you're describing a retail strip mall? What is the quality of the tenants? How are the demographics in this area? What do you forecast the population growth to be in this area over the next 5-10 years? Etc.

If the deal itself checks out, I'd take this financing offer for sure. You're not going to get terms anywhere close to this from a bank.

There's no doubt Grant is a smashing success. By the looks of things he has made hundreds of millions in real estate. And he has also made hundreds of millions in his courses, trainings, seminars, books, etc.

He's also an intense, larger than life personality. Which is what has helped him to achieve the level of success he has achieved. And it has also helped him to build up so many haters. I heard him once say in a podcast something to the effect of "if you don't get half the world to hate you, you're doing something wrong." He was more specifically referring to how presidents get elected.

Anyways I'm probably coming across as some fanboy. I'm not. I just find it funny that so many people critique the guy... because that is exactly what he is going for.

As far as the $1,000 program is concerned - I'd buy it if I was looking for a motivational, pump me up, get me stoked kind of event. I'm sure the energy at those events is on another level. If I was looking to learn how to actually invest in real estate though, I wouldn't waste my money.

 You finally got the answer you were looking for ;)

 Got it.. that makes more sense. Thanks for explaining.

You have clearly come to the forums with your mind made up, so I'm not sure why you posed the question to begin with.

I will spell this out very clearly to be sure that nothing is up for interpretation: Option #3 is a bad plan. 

I would never, and I mean never hire an agent who was willing to take a $5,000 flat fee on a $1.5mm transaction (unless I brought them the deal myself).

You want a discount broker to be doing your negotiations? Be prepared to pay more than necessary for the deal. It's that simple.

Last I'll just speak to your point about the commission structure incentivizing an agent to get you to pay more for the property. In real life, this couldn't be farther from the truth.

-If you pay $1.5mm for the deal, your agent at 3% will make $45,000

-If you pay $1.35mm for the deal, your agent at 3% will make $40,500

A good real estate agent will negotiate that thing down for you all day long. Because good real estate agents are in this for the long term relationship. They know that if they perform for you today, they are going to get your business potentially for a lifetime. Think they will jeopardize that over a measly $4,500?

Sure. I've bought a lot of deals using Option 1 and Option 2. So both of those are fine. 

I wouldn't do a deal with an agent who has an Option 3 structure. To me that just screams 'desperate' or 'discount broker.' Which you don't want when you're looking to deploy $1.5mm.

If you go directly to the listing agent (option 1) you will be able to probably negotiate the total commission down, which might land you a bit of a better price on the house since the seller will net more. But the agent will still have a responsibility to act in the best interest of the seller (meaning they will not be there to represent you and your best interests).

A good buyers agent is worth their weight in gold. Negotiation is both a skill and an art. If you have a good buyers agent on your side, they should be able to negotiate the deal down far more than their 3% commission rate. On the last deal I bought with an agent, I bought the house for about 15% off of the asking price. Why? Because my agent is stubbornly persistent and a great negotiator.

It's all good... I didn't think you were trying to. I just wanted to make sure it was clear that even though it's a good question, it's definitely not something you want to mess around with.

Surprised to hear you've seen a lot of posts about buying investment properties as a primary. That must be on another site. I haven't seen that come up in a while.

Option 2

If this is your first rehab, the answer to how you rehab an out of state property is - You don't.

You're going to want to (and need to) be at the job site every day to check in on your investment, do quality control, answer questions, etc. Even if you hire an architect, designer, and a competent general contractor, there will still be hundreds of questions that come up along the way.

Some stuff can be addressed over a FaceTime call. But ideally you should be there in person.

My CPA told me the same thing. But if you're doing everything by the books, getting audited shouldn't be a big concern.

Also... my CPA offers an 'audit insurance' (can't remember if it's called exactly that). For a small fee every year, he signs something that assumes all liability in the event of an audit. Does your CPA offer something similar?