All Forum Posts by: Carlos O.

@J Scott That answers my question. I didn't see it your first post. Thanks!

So just to clarify, the contract states that they can only do one or the other; either get the "selling commission" or the 3%. Let's say the selling commission is 6%, but the seller's agent only wants to pay 2%, therefore the selling commission is 4%? Wouldn't this contract make me pay the 4%? 

Hello all,

I just have a quick question. I recently received a non-exclusive contract from my real estate agent so he can represent me. There's one sentence in there that I don't completely understand. It basically says that the broker's fee will either the the "selling commission" listed on the MLS or 3% of the purchase price, whichever is greater. I get the 3%, but I don't understand the first part. I don't want to go into a deal with some unknown broker fee that won't be disclosed until closing. Can someone explain what a "selling commission"? Is that something I pay? Can I as a buyer even see this "selling commission" if it's listed in MLS?

In case location is relevant, I'm looking at KS and MO.

Carlos O.

Welcome to the site @David Fraser , it's one of the best resources to dig into when starting real estate investing. If it's local people you are looking to meet, check out meetup.com; there's a lot of meetups around this area. 

Best of luck!

Carlos O.

@William Robison 

You touch on a lot of good points. Especially with buying a home with built in equity, if not for ROI, at least to use it as an exit strategy. My rea sent me a comps list and there hasn't been much action in that area over the past 6 months. It's difficult to use it to make predictions. For example, I see a renovated 3/1 right around the corner of the prop I'm looking at and the DOM on that is 15 days. It sold at 70K. Yet, approximately two blocks away is a 4/2 that is newer, and almost twice the size of the 3/1. It sat on the market for 271 days even though it's also listed at 70K.

After listening to everyone's considerations, I will really need to come in at low to mid 50s on this one to get that built in equity and that's if the home inspection comes back clean. At this point, I don't think the deal will go through. According to the seller's rea, the seller "needs" an offer in the high 50s or it's a no go. I'll stick with this a little longer, even if the deal falls through, I'm still learning so much from going through this process.

@Mike D'Arrigo 

My rent sources are as follows:

Rentometer: Median for a 4 bed is 1100

CL: 3 beds around the area go for 700-800.

Seller's agent says this house rents between 900-1000.

I went with $800 as a conservative number, but the plan here would be to start at 1000 and start slowly decreasing the rent if there's no interest at that price. Good point on the "turnkey" and the maintenance. Hopefully, the home inspector gives me good news regarding the mechanicals.

Regarding @JT Spangler comments,; for that that have actually invested in KC, is it possible to get 200-300 cashflows without serious rehab on a house? My impression is no, that is not really possible. At least, I haven't seen how it can be possible. I'm starting to research turnkey companies in the area as well to see if they offer better returns.

@Jon Sheffield 

I'm working with an agent that also works for a property management company. I've given him my criteria and he's been looking for deals that fit the bill. I know the area as well as from what I can gather from various online sources. I try to do as much due diligence as I can. I have 5K budgeted for making a property rental ready. I'm talking new paint, carpet, landscaping. I'm not sure how realistic those numbers are, I'll be running those numbers tomorrow. I can do more than 5K, but I choose not to. As I said before, I don't want to deal with roof repairs or foundation issues given that I'm not there to oversee projects on that scale. I'm looking for something that is more "turnkey". I understand the rate of returns are lower than getting a property that needs a lot of work, but that's acceptable to me due to the lower risk.

@Jordan Thibodeau 

I'm not too sure on the square ft. of this property. The seller's agent didn't even post that info in the listing. My agent is going to get me that info and send it over so I can crunch more numbers.

If anyone knows of a great home inspector in that area, let me know. 

The $42 is based off very conservative rent of $800. The rent around that area points to $900 and up. I guess I should update my numbers to be "better case" scenario. I am going conventional on this home. The price of that is already included in the debt service. I don't have a contractor, so part of this deal is confirming that the house is in good shape. If there's anything beyond cosmetic repairs, I most likely will not go for it. I don't want to get screwed by a contractor on my first deal.

Hello everyone,

After a month and a half of searching I think I finally found something decent out near KC. This would be my first deal and I'm taking a conservative approach here. I would like to some feedback on the numbers below. 

The property I'm looking at is a 4/2 home. I've checked out CL and rentometer. CL shows nearby 3 beds at $750 to $800. So that's what I plugged in even though this is a 4/2. My agent mentioned that this house could rent for 900 to 1000. The house was build in the 50's, so I have $100 budgeted for maintenance and repairs. Purchase price is in the 60s, but I think I can bring it down into the mid 50's. The selling agent says the house needs "some updates" but is in good conditions. My agent will go take a look at this property to see what shape it's really in this weekend or early next week. Assuming the property is in good condition, what do you guys think of this deal? Is there anything I'm missing in the numbers? Any questions?

Another concern of mine is that this house has been listed on the MLS for a few months now. How bad of a sign is that in KCK? I think that if was a cash flowing property, someone would have bought it already.

Congrats OP.