All Forum Posts by: Heather Bailey

This is a really frustrating situation. As a real estate agent, we are supposed to make a pricing recommendation, but the client always makes the final decision. As far as that buyers agent commission law, commissions are negotiable. It should have been outlined clearly in the contract who was going to pay the buyers agent commission and she could have pushed back on that. I don't know what the laws are in her state but her only option would be to address the issue in attorney review if that exists in her state and if possible, based on where they are in the process.  Canceling the contract would require cause and again it depends on the state. This is a really unfortunate situation and that was not an ethical competent  real estate agent. I'm sorry to hear how her experience has been.

The processes should have been very clearly discussed.  Additionally, a seller should be able to list the house for what they want,  a good agent in response to listing a house above their recommendation should say: "ok, we'll give it 2 weeks - let's try and test the market.   Then she could've explained that there is a risk to coming in too high and having a Listing age. Statistics do show that houses that sit longer tend to sell for a little less. But, it sounds like this could have been a case where there could have been a higher price or another buyer out there.  Additionally, if the market conditions are putting pressure on price, this is  an opportunity when we use the buyer agent commission as a negotiating tool to increase the net proceeds.  If price is below what we are hoping,  we can push back on having to pay that buyer agent commission. I'm in New Jersey and most sellers here are paying the buyer agent commission.   

The bottom line, everything is negotiable in a real estate transaction. If your real estate agent is being very rigid and telling you what to do without making you feel like you can have a say in the process, get another real estate agent in to give you another opinion.  I'm sorry this is how this worked out for her.  Let us know exactly where she is in the process. But, you said she was closing in a few weeks so it sounds like it may be too late. That's unfortunate. I can't stress enough - if something doesn't feel right, you are within your right to stop and get an explanation or get another professional. Never sign anything without knowing exactly what you're committing to.  

The cost seems high, but don't forget when you work with the lender there's an origination fee so that's a couple thousand dollars.   They might be charging you points to get you in more attractive rate.   Your hazard insurance may be in there.  Ask your lender to go through it with you.  They owe you that.   The upfront cost may sting a little, but what really matters is your monthly payment and your projected income. Is that penciling out for you? Next time definitely shop lenders.  You can negotiate your origination fee, you can play around with a percent down and points.  And that impacts your interest rate. Good luck

Well, a DSCR loan IS a bank loan tied to income of the property. And, a bank will evaluate the comps of area rentals depending on the type of DSCR loan you get. They will either look at Air DNA data (short term rental) or they will look at long-term rental data and you can evaluate both types for aparticular property. Note: This will impact the insurance you get because of some insurance carriers will not underwrite short-term rental properties. But a DSCR loan is a great way to secure an income property. You just have to look at markets where these will pencil out. And because prices are a little high right now, short term rental data May show that the property will only work as a short term rental to cover the financing.
Some investors are using a second home loan as a way to secure a property and you only have to show that you spend two weeks a year there. The rates are a little better. It's just a little tougher to qualify.   

I know it sounds very catchy to say you don't need a buyers agent and you don't know what they do.  

If you really know your market and you're a real estate attorney, then maybe you can work without a buyers agent.    I'm a real estate agent in NJ. Our inventory is scarce. It may take  eight + offers before my buyer is able to land the property they want.  As a buyers agent, I take my buyers to many properties and towns.  I share with them the latest list vs. sale, price in their exact neighborhood. I know the listing agents and I talk to them about what the seller is expecting/hoping for in an offer. I draw up the contracts and negotiate the price, I work with the buyers attorney, I set up inspections, and I go to inspections. I have a lot of construction experience so I can talk about the condition of a house and give buyers guidance on what to budget for-based on the condition of expensive items like the roof, siding systems, etc.. I talk them off the ledge when they are about to make a decision that they might regret thats inconsistent with what they've told me. We do a lot to get buyers into houses, especially in a market like we are in New Jersey, where it is still so heavily weighted towards Sellers.    But the key here is, we do it fast. I can get you in a house on Sunday and an offer to the sellers by Sunday evening. I work with a lot of attorneys and they are wonderful, but they're not going to get your offer drawn up fast enough and into the hands of the seller before offer deadlines.  They're not going to accompany you to the inspection. And in many cases, listing agents will not work with an unrepresented buyer. It risks a more encumbered transaction. And most houses here have multiple offers by established agents.  So, why take a chance on a crazy buyer who is unrepresented.  We also work with the lenders so we can sell our buyers to the seller and explain their qualifications. Having a preapproval alone from some online, Lender is not enough.

We have to be very strategic about offers today. As I said above,   I know it sounds very catchy to say "oh buyers agents don't do anything".   But try working with an agent in a market you want to invest in  and see what you learn from them.  If you choose well, I am sure you will get very valuable insights into the market and they will help you get the house. Even in a buyers market, as an investor, you know the competition is fierce to get viable properties. The right agent may help you compete in that arena.  

Look up the taxes. See who owns it. It might indicate if it's an absentee owner or somebody out of state. Then try to contact that owner and ask them if they want to sell the property. There are several websites that will allow you to look up a phone number based on a name They're not expensive.  Also, go to the town Building Dept.   Often they know about abandoned houses.  They might be able to give you the back story about the house.  The Town's maintenance department may also be able to give you some information because when a house is left untended, the town may issue fines and those fines build up. Tracking down homes like this is one way wholesalers find houses.   Look into some of the great books out there about wholesaling and I'm sure you'll find a chapter on tips for tracking down The owners of homes to make them an offer.    Once you find the owner, you want to look at local comps so that you can make them a reasonable offer based on the condition. A good real estate agent who is familiar with investing can help you with that. I am an agent in Morris County NJ and the surrounding areas and may be able to help with that.  DM me if you need market data in north central NJ.  Good luck. 

Hi Becca, this is still an evolving issue. I would ask a buyer agent to give you  individual property agreements, or agreements just for the day. And, I would recommend that you commit to no more than 2% buyer agent compensation if paid by the buyer    I don't think a smart real estate agent is going to not take you on as an investor if you pay only 2%. Investor buyers tend to be repeat buyers, so I will discount for them.  What we're doing now in New Jersey is approaching every property individually. In some cases the seller is offering compensation and others they are saying "make it part of the offer".  Most important is that your agent is able to convey the net proceeds to the seller and sell them on your offer including your request for them to pay by your agent compensation.  But, don't lock yourself into anything more than 2%.       

For your Texas property, can you build more bedrooms in the house and rent by the room? This Co Living model is gaining momentum in markets in Texas, Colorado,  Charlotte, Atlanta, and many others. The numbers are looking impressive when this is managed well. Take a look at Scale Your Real Estate with Sam Wegert.  Brandon Turner has an episode on his better life podcast featuring Sam and his network. There are also operators who are leasing their properties to  sober Living organizations.   They run the properties and manage the leases. These groups even manage a rehab or refit if you need to add bedrooms.  And, these appear to be cash flowing in the 11% range. You can find more information about them if you look up Rooted sober Living. There's a better life podcast episode about that as well. With this crazy market, it seems like it's all about being able to pivot. Good luck with everything!

Hi Matt.  Reach out to Travis Gough, Rooted Sober Living.  I think he works with Oxford house. I learned about him through Brandon Turner's Better Life Podcast.  One of the episodes featured him so you will learn a lot just by listening to that episode. Travis's company does the leg work in finding and renovating houses for Oxford and makes these investment homes available to his network of investors.  They go quick and the deals seem solid at a good return.  He may have some insight into your questions about leasing with them. Good luck it seems like a good asset class right now.  

I would try another lender. I was able to get a HELOC on my property that has a legal mother daughter apartment and they just factored that into the value of the property to calculate how much equity I was working with. They are not separately deeded are they?

I feel like your tenant is not entitled to access your ring camera, but if they want ring camera recordings, they can install their own ring camera.