All Forum Posts by: Max Drizin

Originally posted by Sam Lee:

so 15-25% downpayment you say? How much cash would I need to get things going when operating the apartment; repairs, maintenance, ect? What % cash buffer do you retain?

Also Im looking at deals online, what other places do you look?

It all depends on what the property looks like. You might be able to find some turnkey properties in your area, and you don't need anything to work on.

There are also properties that will need a lot of work, maybe 15-30% of the purchase price. This is something you need to take into consideration when you look at the property.

If you don't know what you are looking for, it's definitely worth the money to get a full inspection. Personally, I haven't gotten an inspection unless it's absolutely necessary or there's an investor who just wants it as a formality, but when you don't know what to look for in a foundation, in everything, it can be a godsend.

As for your cash on hand for other repairs, it depends on a lot. Older places, you want to keep more cash available in case of a foundation issue, roof, major electrical, a new boiler, all of that sort of thing. I just got a property that's in good condition, from 1880, probably needs to have a new layer on the roof. Besides that, I'm putting 2500 a year into cash reserve, for four years and then capping at $10,000.

If you are looking into commercial property, I might suggest slowing down a little. It might be better to start with a single-family or a 2-3 unit property before you get into larger ones.

There's a lot to be said for the off-the-market listings. You won't find a good deal just sitting around on the market, unless it's in foreclosure or you get lucky. You'll find people on Craigslist, but the good agents have the best connections.

Watch out for stupid agents, and there are a ton of them. Lots of people who stay at home and say "oh, I can be a realtor!" and just think that that means they are great. They do an MLS search, and maybe put a sign in front of a house their friend is trying to sell, and they call that brokerage.

These aren't the people you want. You need to find the good agents in your area, the ones that have a detailed focus on a small area, a few neighborhoods, and a niche in the market. I've got a great agent who does multi-family properties and commercial properties in about four neighborhoods, and that's all. I wouldn't trust him to find me a single-family or to go out of his neighborhoods, because I know out of the thousands of numbers in his phone, he has connections to every major player in the area.

From the sounds of it, you definitely need to do a little more independent research into your area and the market as a whole, as well as doing business. I'm happy to help however I can, and there are plenty of people here who would love to give you some great advice, but there's a lot to be said about figuring it out yourself.

Edit: I just realized I sort of responded to two different people in the same post. Woops.

If I'm trying to get money from an investor, I always ask for advice. People love to give advice. There is nothing better than feeling smart by telling someone what they think is right, no matter how wrong they are.

I go along with bad agents who are connected to money simply to network, and I play along with their strings of 5-6 cap properties that they want to broker for me. I'm always getting advice, until I ask them if it is something they would be interested in.

At that point, we are talking about my deal and investing in it, and by the time they realize they've invested in it, they think that they basically created the deal. It's great for them, because they are feeling accomplished and making a good amount of money.

For sellers, it's about confidence. I'm always blunt with sellers because it's intimidating for them when I walk in with figures and information as to why their prices are too high. They second-guess themselves and end up deciding that I probably have a better valuation of the property. It's an information game, and if I can walk into their office, have a pro forma figured out based on comparable rents and estimating expenses or looking up expenses (taxes, etc.), I'm way ahead of them.

Sales is really about manipulation. You never want to give your target/victim/client/whatever-you-call-them a choice, you need to lead them to saying yes to you. Always saying yes. Never give people negative questions, because it lets them say no.

I sound like a horrible person.

Looks great, much cleaner than before. I'm having some small issues with alignment and CSS positioning, screenshot available here.

Chrome 13.0.782.14 dev-m, Windows 7 x64, so that's probably where I'm going wrong anyway :P

Originally posted by John Holme:

Do you think it is legal if I add a side note that isn't seen by the bank that buyer will pay the difference in commissions on the highest price $80k, even if the house sells for 54,200? This way the agent would have no reason to inflate my offer.

Well, the issue at hand is that you are still seeing the other possible offers, not anything else.

Originally posted by John Holme:

In our area, the assessors like to go into the property during the smoke cert inspection and give it their own price, they don't care what you pay for it. $18.2 mill rate

Paid $89k assessed at 128k
Paid 27k assessed at 126k,
Paid 30, assessed 123k.

This is exactly why I laugh when people say an assessment is an estimate of worth. I bought a property that was assessed at $270,000 for $135,000, and I'm hoping to call up and ask them to reassess. They probably won't budge, I might get assessed down to $250,000 or something though.

Originally posted by J Scott:

While I've never done this myself, I've heard of others doing this successfully. My biggest concern was that the listing agent can't legally show you another offer, so you'd have to take her word for the fact that there were other offers bidding the price up.

This is the main problem. I don't think you could legally, since by accepting your offer, they would just be showing you a previous offer by another, against the law.

Lebron-a-thon about to come back and show Dirk what it's like to win a championship, because he certainly won't ever know.

Originally posted by Jeffery Bigsby:

People will charge what they can get away with. I know a web designer who charges over $2,000 for websites while I also know a guy that charges $250 for the same work. Most of them use templates anyway

Prices vary a lot, but look at the service you are getting. I'm still active in the site development, and my quotes for a site can easily come in at 10x what some people would charge. But really, you do get what you pay for.

Yes, I'll use a CMS to build your site, I'm not going to code it fully custom. Yes, I'll use a template to design a good amount of your site, it won't be totally custom either.

However, I will do an extensive amount of customization on top of the template. I will sit on the phone for you for hours, send pictures of design mock-ups, go through an endless number of emails, make sure that the product is the one you want, make edits for a while without charging you hourly, and make sure you know how to do everything you want to.

Making a web site should never be a churn-and-burn process, which I guarantee what the $250 designer does. You don't want to give someone a static site and say good luck, leaving them with an hourly rate at something ridiculous afterwards.

I give people a contract, an honest assessment of what I do, and a lot of consultation before a check ever comes in my mail. I've told more people that they can get their work done cheaper with someone else, or that I'm not qualified to do their work, or that their work is unrealistic given any range of quotes, more than I've accepted jobs.

If you'd like, go to somewhere like http://odesk.com, where developers bid on your jobs, and see the kind of people you'll get. I guarantee you will get ten or so bids from companies in Asia and the subcontinent, at about $8 an hour, looking for your work. Then, you will do your own research on people, and choose three or four qualified individuals from North America, Europe, and Asia who will give you bids much more expensive than that.

Are they worth it? Yes. If you want a full-featured web site, that looks good, is extensible, and has a trusted designer behind it, they have a portfolio and a cost that goes to four figures. There is a product lifecycle for software, you should stay in contact with your developer, and they should never disappear off the face of the earth once your site is hosted.

I hate to act like a buzzkill, but services like Ooma and Vonage, Magicjack or Grasshopper are not fit for any sort of enterprise application.

If you are simply switching one or two lines over for your home office, it's fine. However, if you are looking into an enterprise solution, with more than 20 users and more than 5 or so lines, you need to look elsewhere for VoIP solutions.

I would never use anything other than Cisco or HP for any enterprise solution. Cisco has things like the Unified Communicator series, which hooks into Salesforce, forwards calls, and does a dozen other things that you might not need. I'm implementing it in our upcoming office because of open desking solutions, so that an agent isn't tied down to a physical phone, and they can log into the phone with an account to register the extension to that phone.

These systems are not cheap. a 24-port, 1Gbps switch could run $1,200 new, plus phones, plus a router, plus adequate security, plus some fast internet. However, these other systems are cheap, because you get exactly what you pay for. The call quality is inherently not comparable to a land line, where Cisco systems along with a good QoS management in place can easily provide consistent and clear calls over IP.

Google Apps is completely worth it. There is simply not a better solution. Between using GMail, Google Docs, Calendar, and the Google Apps marketplace, there is so much you can benefit from.

There are tools that pick up slack where Google isn't the best, things like GQueues or Salesforce, or Top Producer. Top Producer is a CRM meant for real estate, which I haven't had the pleasure of using. I use Salesforce, which is the leading CRM, and its absolutely worth its cost. It hooks in to Google effortlessly, and it's one of the best managers.

When you incorporate Google into your life, as with an Android smartphone, it gets even better. I do almost everything from my phone (rooted myTouch 4G, thanks T-Mobile!), and it works perfectly. Google Docs to edit and view contracts or other documents, email and chat to keep me in contact with people, I have services that log all my phone calls onto my calendar to see who I've talked to and when, and so on.

If you are on the phone as much as I am, it's hard to remember who you have to follow up with and when. I use Salesforce to keep up to date with every phone call I've made. Beyond that, I have about 6,000 contacts in my phone and on Salesforce. Starting up a new account for the new brokerage, I estimate that with 20 employees, we will have about 100,000 contacts in our database. It is stupid to think that either Outlook or GMail would be able to handle these efficiently, but there are solutions for this. You can annotate calls, and so on.