Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Try Pro Features for Free
Start your 7 day free trial. Pick markets, find deals, analyze and manage properties.
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Eric Medemar

Eric Medemar has started 34 posts and replied 197 times.

Post: BiggerPockets Launches its First Online Promo Video

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

I gotta say when the video said somewhat edgy, prior to turning it on I thought it was going to be some lame piece of work that maybe my Grandma might take offense to.

But....

It was very good and got me laughing, when you can capture peoples emotions, you capture their attention, good job.

Post: What's Your Excuse For Not Investing

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

You can either make excuses or make progress, but never both!

Every year I talk to countess "Investors" who:

* Have been thinking about investing
* Have been reading about investing
* Have a friend who failed at investing so that means you'll fail (The elusive friend)
* Are saving for a down payment
* Are Waiting for rates to go down
* Are Waiting to finish their real estate course
* Are Waiting for their mentor to tell them to buy
* Are Waiting for summer (insert any season), to get started
* Are Waiting for the market to straighten out
* Waiting till they can afford it
* Waiting till they get a promotion
* Waiting till their friend or relative can partner with them
* Trying to read just one more book, then they will get going
* Waiting till they buy their own house
* Waiting till they get a raise
* Waiting to graduate from college
* Waiting till their friend or family member becomes a realtor
* Waiting to be married
* Waiting till they contribute their maximum to a 401k
* Waiting till they get done working on their own home

Then after giving me their excuse for waiting to start investing they ask:

* What happens if the toilet gets clogged?
* What happens if the furnace gos bad?
* What happens if tenant ruins the house?
* What happens if the roof leaks?
* What happens if the tenant doesn't pay?
* What happens if someone breaks a window?
* What happens if someone leaves a broken down car at the house?

If they don't have the question, they usually tell me about a friend or relative who had one of the above happen.

The questions that they SHOULD be asking but NEVER do:

* What happens if I don't start investing now?
* How many homes do I need to buy in order to retire comfortably?
* If you could share with me your best idea, what would it be?
* What kind of money am I leaving on the table by not investing?
* How does the stock market compare to real estate? (that doesn't even deserve an answer)
* How can I use real estate to make my dreams come true?
* What would I do with an extra $500 or even $5,000 a month in cash flow?
* How will my family react when I retire 10-20 years earlier?
* What are my broke friends going to think when I show up in my Porsche?

99% of people share this problem: If a family member or friend needed $500, most people would need a ton of convincing to loan it to them, and if it wasn't repaid it would surely be a BIG problem, some people would even lose friend over such a small amount of money. But that same person could care less about the $500-$10,000 a month that they will lose each and every month for the rest of their life by not investing in real estate.

Why doesn't anybody pay attention to their opportunity cost?

I used to be a tight a##, then one day I got to thinking.

What if instead of worrying about ways to save money, I started just focusing on ways to make it?

That simple question changed my whole life.

Hopefully most of you are making progress and not excuses, but......

I would love to hear the excuses that are holding your back, or how you have actually overcame the excuse trap

Post: How to Use Realtors For Bird Dogging and Wholesaling pt.1

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

have seen the question asked many times in the forums "Can I wholesale properties using a realtor" or "Can I Bird Dog properties using a Realtor", so I thought I would take a minute to answer those questions. This is not information that I read in some guide, this is ALL from experience in the field.

I am a licensed agent and have wholesaled countless properties and bought from many different Realtors, I have kept commissions for myself, I have paid other agents commissions. Here is the way that I have done things I hope it clears things up for you a bit.

A real estate commission from an MLS property consists of two parts and in 99% of cases is paid by the seller, with the commission being negotiated up front by the listing agent, here are the two parts:

1. The listing agent side commission- This is the fee paid to the agent who lists the property for sale, they will be paid this part of the commission regardless of who brings a buyer.

2. The buying side commission- This is the fee paid to the agent who brings a buyer to the listed property. The only way that this agent makes a commission on the home is if they sell it to you.

During any real estate transaction including wholesaling the selling agent will be paid by the seller, the buying agent (the agent who you buy from, which by the way can be the selling agent) will be paid by the seller as well. You as a wholesaler do not need to concern yourself with how the agents are getting paid. The fee that they are paid, is in most cases already negotiated by the selling agent at the time of the listing.

Here is an example using one of my actual transactions to demonstrate one of the ways that I can get paid as an agent. I found a property that I put under contract for $50,000, the same day I made made some phone calls and found a guy who would like to buy the home for $62,000.

In this case I used a back to back closing so on the day of closing I received 3% of the 6% total commission for being the buyer, which was $1500.00.

I also received an additional $12,000 gross before closing expenses for the difference between my contracted sales price and the price that I sold the home for.

My closing expenses had nothing to do with the commission, the commission was paid on the seller side of the HUD and came off of the $50,000 gross sales price that I paid. Because I was an agent I made an extra $1500.00, if I was not a real estate agent then I would have made a measly $12,000 for my efforts. As you can see their is plenty of room in a deal for agents.

When an agent calls me with a potential good lead that I did not find on my own I will usually let them keep the buyer side commission rather than taking it for myself. This encourages more agents to call me with more deals, which leads to more money in my pocket. Isn't that the goal in the first place?

Many agents will try to lock you into signing a buyers agency contract so that they can “represent you”, I would not recommend doing this. If you want to have an agent “represent you” on a particular property, just request to sign a buyer agency agreement on that particular address for a limited amount of time. Signing a buyers agency agreement in this manner will allow you the full benefits of having a buyers agent without all of the pitfalls associated with a traditional buyers agency agreement.

A few things to keep in mind when you are dealing with the listing agent on a particular piece of property. The listing agent in most cases has a fiduciary responsibility to represent the seller. However there are several benefits to buying from the listing agent rather than having your own buyers agent.

1.Reduced commission in some cases- In some cases if an agent serves as both the listing agent and the buying agent they will give the seller a break on the commission. Most sellers have a bottom line net price that they are willing to accept. Having said that, with a reduction in agent commission, your offer can be lowered by the amount that they agent has reduced their commission by and the seller will still end up at their minimal net price.

2.Find out about deals before they hit the MLS- The first agents to know about listed properties are always the listing agents. Having said that, if you have a good working relationship with the listing agent you may be able to get them to call you before the home hits the MLS, giving you a chance at deals that most investors will never see. I have worked with many Realtors that will call me even before the property is listed so that I can get an idea about a potential deal. If I buy the deal they end up getting paid both the listing commission and the buying commission, so we both end up winning.

3.Find out about price reductions prior to the MLS being updated- I have had many agents call me prior to price reductions hitting the MLS. In many cases the asset managers at the bank will call the agent and let them know that a home must sell, so the agent will call me and tell me to make a ridiculously low offer, which is often accepted because of my inside information.

A word of caution for those of you who want to bird dog properties rather than wholesale them. If you develop strong agent relationships, be sure to let your investors know that you expect them to buy from the agent who referred the property to you. The last thing a real estate agent wants to happen is to call you with a great deal on a property, then you pass the deal along to your buyer, who then uses their own agent to buy the property. This cuts the original agent out all together which will quickly dry up any future leads that you might receive.

“Can I bird dog listed properties?”, I have seen this question asked countless times here in the forums, and the answer is yes. Once again the agents are paid by the seller and as a bird dog you are paid in most cases by the buyer. There is a small chance that your buyer could later try to develop a relationship with the selling agent and cut you out, but I most agents will respect the way that you do business, so long as you let them know the ground rules of working with you right up front.

I will add more information when I get the chance but I better get back to work.

Post: RE Programs, Colleges, or Universities?

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

If you took the money that you were to invest in a college RE program and invested in some quality re courses it would seem that you would be much farther along.

don't get me wrong having a degree is great, but it is not something that I needed to become a a real estate agent or real estate wholesaler or landlord, all of which I currently do.

Unless you plan on seeking employment in the real estate field with a firm or something like that, where you need to be hired I would advise skipping the degree.

I went into real estate so that I could have time freedom and financial freedom, and it has brought me a lot of both, but if I were to go and get a JOB in the real estate business I am sure I would probably lose out on both.

That is just my experience.

Post: Mentors?

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

One of the main advantages of getting a mentor for any aspect of your life is as Albert Einstein said "You can't solve a problem with the same mind that causes it".

Many people go through life unconscious and so totally identified with their own thoughts that they think that they don't have a problem or that there is no way but their own to do things. Bringing in an outside mentor brings a new thought process that often helps overcome the unconscious thinking patterns that many people are caught in.

Up until this very instant, you have done the absolute best you can do with your life. Having said that, if you are unhappy with your current life position then you need to bring in some sort of outside resource whether that resource be a book, real estate course, or a mentor, it doesn't matter. So long as you bring in something new outside of your own mind.

Trying to change your life without bringing in any new resources is alot like putting kool aid in your gas tank everyday and wondering why your car won't move. (unless of course you have a koolaid powered car).

Post: Mentors?

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

Mentors are great if you are willing to use what you learn from them. They can save you thousands by not making the same mistakes that they have made, not to mention the opportunity cost of your time for learning.

Having said that, I have 30+ properties and have made a pretty decent living wholesaling without a personal mentor. I use everyone that I meet as a mentor, I always ask questions to everyone. When I find someone who is doing what I want to do, I find out what they are doing, then I do it. Not rocket science.

As a starter investor I would look at real estate wholesaling, I certainly wished I had started wholesaling in college, I now make more on one deal than I made in all 4 years of summer jobs combined.

Post: beginner looking for new material

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

Check out ebay for some inexpensive courses, on the subject matter that you are interested in. I have bought a ton of courses from their.

Post: Should I get a real estate license?

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

It depends on who you are working with, I close all of my own deals for free not just because I am an agent who can bring more business, but because I am an investor who closes alot of deals.

One of the major downalls to getting your license is it can be very expensive because of mls fees, NAR fees, state fees, offices fees, etc.

Be sure that you consider all of those factors. I have been an agent for 7 years and love it, I primarily wholesale and rehab now but being an agent has served me well.

Post: 8 Landlord Horror Stories

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

I think it would be more difficult for me to come up with good tenant stories, the horror stories come easy.

1. One of my tenants who I was evicting lived in a unit where I payed all of the utilities, he moved out in the middle of the night, but left the door unlocked and the homeless decided it would make an excellent shelter. So they moved in and decided to turn the heat up over 95 degrees for 15 days. My gas bill was over $1000.00. Luckily for me I turned it into the insurance company and they took care of most of it.

2. In that same unit I had another tenant move out in the middle of the eviction process and this time the copper thieves broke in and stole all of my copper plumbing for scrap metal. They destroyed a $1000 shower by punching a whole through it to get copper for scrap, they got about $2.00 for the valves they stole.

I have thought about putting up a little red emergency box on the wall with a $20.00 inside. The $20 would be behind glass and it would say, In case of crack emergency break glass, but don't steal my plumbing.

3. I bought a home that had recently had a homicide, nobody told me until after closing. A grand kid had killed his grandmother and shoved her in the gravity fed furnace (REALLY BIG Furnace). Well I bought the home in the summer and when my new tenant turned on the funace in the winter he ended up vomiting all over the home because the smell was so bad coming out of the furnace. They had pulled out her decomposing body but never cleaned up the mess that was left after her body was left in the furnace for about 3 weeks.

4. One evening at about 7pm, I received a call from my tenant who was taking a bath and smelled gas. It didn't smell like regular natural gas, it smelled like gasoline. She went outside and someone had doused her home (my rental) in gas. Later after talking to detectives I found out her boyfriend had started selling drugs in that area and the local dealers didn't like it so they were sending them a little message.

5. One morning I woke up and turned on the evening news, to live coverage of a local homicide that had just happened. Evidently a man had just been shot and died inside an area home. Not unusual for the area, the unusual part was about 2 minutes into the story the reporter was interviewing neighbors in front of the home of the homicide. It was a home I had bought about 2 weeks earlier.

6. I had just heard a story about a lady who had been shot to death and left burning in a vacant lot. So I went on the news to see the street name that this had happened. Finally for once it wasn't on a street where I owned a home. The next day I went to a home that I owned in the same area and realized that the vacant lot was off a street that backed up to mine and the body had actually been found burning 3 feet off my property line.

7. I was in front of the judge with a tenant who had brought a pile of pictures along to say that her home was infested with mice and that I hadn't taken care of the issue. I had my guys go over their numerous times with every mouse killer in the world, so this seemed odd to me. So I personally went over to the home after court because the judge demanded that I go take care of the problem. I asked the tenant where she was keeping her trash and if she was feeding the mice and she said that she was keeping the trash outside and she didn't know where the mice were getting the food. When I arrived at the home I went into the kitchen and low and behold a giant trash bag full of food was in the middle of her kitchen and 10 mice scurried away. Now wonder the traps and poison were not working she had a feeding station in the middle of the kitchen.

8. I had just evicted one of my best tenants who had always paid on time, she had recently gotten laid off from her job. She had a really good office job and was a really nice, and courteous lady who all the neighbors spoke highly of. Well she had left a couple of boxes behind in a dark room in the basement. I think she didn't know that they were there. I was inspecting the home and grabbed one of the boxes and too my horror. The box was filled with naked photos of her, pictures of her having sex with numerous men, and pictures of her having sex with many woman. In the second box I found every sex toy under the sun. From the looks of the pictures she was actually running an escort service out of the basement I thought. So when I got back home I google grand rapids escorts and she was #1 on google.

I could go on and on with these but I better get to work. I think I like wholesaling real estate a bit better than being a landlord just for these reasons.

Post: Buying Outright vs Carrying a Mortage

Eric MedemarPosted
  • Real Estate Coach
  • Grand Rapids, MI
  • Posts 204
  • Votes 187

Like the other guy said it depends on your investment intentions. If you plan on doing a quick flip and you don't intend on leveraging yourself with many flips then cash is a great way to go because sellers will often take a lower offer price if the offer is cash.

One of my own deals I paid 99k cash and beat out a 112,000 financed offer from a strong credit buyer. Meaning I my profit potential right from the start was $13,000 higher and that was the entire cost of rehab. Not to mention that his offer would have added another $2000 in closing costs.

If you are buying for the long term and do need money to leverage then I would strongly suggest getting loans.

Do keep in mind that any cash you sink into a home and leave in for the long haul has the oppurtunity cost exactly equal to the current interest rates less your tax deductions.

So right now if rates are at 5.5% and you paid cash instead of financing for a long term hold your rate of return on your cash could never exceed 5.5%. Not to mention that in many cases at least 25% of that could be taken off from your taxes leaving you with a mighty return of around 4% on your money.

Just some thoughts to keep in mind.