All Forum Posts by: Dan Mumm

Hi @Marci Stein, great question. Dealt with this a bunch so let me give you the answer from the agent perspective.

Commissions are traditionally paid by the seller, even in pocket listing scenarios. In fact, if I'm representing a seller on a "pocket listing" and I find my own buyer, I'm bringing the seller even more value than with a traditional sale. I'm getting them the end result they want without any commitment from them, inconvenience, or marketing, showing of the property, cleaning it up, etc. So they are normally more than happy to pay for the Realtor's commission.

However, if a Realtor is bringing you (as a buyer) a large volume of lucrative, exclusive, off-market deals, they may ask to be rewarded for the relationship equity if these are not normally accessible or easily found. Sometimes I charge fees to investor clients in these scenarios ranging from $500 - 1% of the sales price at closing. This is rare, usually I just look to earn their future business (the listing when they sell, etc) and don't charge anything.

The only exception would be if you are buying foreclosure/auction/bank-owned properties where the commissions are dramatically reduced. Sometimes the agent may ask you to pay an additional fee to get you into the deal in these cases.

Overall, it's not necessary to reward the agent on the buying side. Just be a good customer, respect the relationship, send them a few referrals and they'll be happy :)

Great advice here from @Bill B. and @Nathan Gesner . I don't think the right solution for you is to self-manage, I think the right solution is to spend more time, energy, and effort up front finding a good property manager.

I'm a very active Realtor in LV and I don't manage my own properties in my own town.

There is a LOT of legal liability. Whenever I look at the monthly real estate division disciplinary hearings, over half are related to property management without a license...

If you find the right person using Nathan's process, it should go well. If you take the path of least resistance and choose one out of a hat, the odds are not in your favor. The average property manager is even worse than the average Realtor, but just like everything in life there are the 10% who are extremely professional, diligent, service-oriented, and will make your life a lot easier.

Does anyone have experience with  converting mobile homes to real property for the purpose of doing value-add investing, in the LV market or in Nevada? What are the costs? How long does it take? What does the process look like? Basically it sounds like shuffling paperwork and creating a foundation to fix the property to and getting utilities, but not sure how cost prohibitive this is.

Vacancy: 1-3% (very robust rental market for average product here)

Maintenance: 3-5% (most inventory is new with lower maintenance cost than other markets)

Capex: Most variable, I add the cost of all the components, divide by the age to budget an annual amount. For example, water heater costs $1200, lasts 8 years, = $150/yr or $10/mo. Add this for all of the components. In Vegas, pay close attention to AC and water heater as they do not last as long. Roofs last longer here than most markets since mostly tile.

Residential trades at well under a 7 cap, sometimes 3-4 cap.

Boom! Love this

This is an unnecessary comment, it was an honest question from someone trying to learn the process. 

Yes, this could technically be considered loan fraud. If your intention is to rent the property, you will need to put 20-25% down. This isn't much of a drawback though since it usually doesn't make sense to put only 10% down on a rental unless it is a cash cow.

Hey Marco, LV is a great place to invest. One of the fastest growing populations, limited land resources, favorable weather and tax conditions. Regarding SFR vs Condo, I replied in another thread recently about this, might want to check it out (link below) Let me know if you have any other questions or things I can help with, I live and invest here and also am a Realtor.

https://www.biggerpockets.com/forums/51/topics/723714-why-not-buy-a-condo-or-is-it-crazy?highlight_post=4265436&page=1#p4265436

Most of the anti-condo sentiment is regarding the lack of certainty with the HOA. Assessments (additional fees imposed by the HOA) are real and happen often. This can eat into cashflow. With most LV properties, when you account for the association fees, increased tenant turnover, uncertainty due to HOA, and lackluster appreciation vs SFR, SFR's generally make better investments over long periods of time. This is why you probably hear this opinion often.

However, my personal thought is that the deal is senior to everything else. Any investment could make sense at the right price and terms. If there is a good opportunity to buy a condo and the cashflow works (even after factoring in possibility of assessments), I am not dogmatic. I think it would be foolish to be completely closed off to them.

One thing to check when buying a condo to mitigate this risk is the history of the association and financials. You can see in the CC&R's how often there have been assessments, what the reserves are, etc. It seems like a ton of complicated information, but it's really not. You can get a very good idea about how healthy an association is with a quick glance at their budget.

Let me know if you have any other questions. I'm a Realtor in LV and also invest here.

Property taxes are roughly .5% to 1% of the MARKET VALUE depending on the township, age of home, etc. "taxable value" is way different from the market value, it's calculated with some weird algorithm like 35% of the market value or something. You can look up the exact tax amounts here and also see what their formula is:

http://www.clarkcountynv.gov/assessor/Pages/PropertyRecords.aspx?H=redrock&P=assrrealprop/site.aspx

Great points, agreed completely. It's market dependent.