All Forum Posts by: Irene Nash

Hi Yisell, you asked great questions, I'm super busy this week so can't address all your questions right now, I'm sorry, but for starters I think it would be super helpful for you to read or listen to a few books that directly apply to skills you'll need in the RE business. 

These are books I've found extremely useful, even after nearly 20 years in RE:

'Never Split the Difference', by Chris Voss. A great book on negotiating, which most RE agents get little or no training in, and a lot of the training they do get is bad, IMO.  This is a great one to listen to on Audible because voice tonality is a big part of what he teaches. (It's not fluff or manipulative, just good psychology.)

'The 1-Page Marketing Plan' by Alan Dib. A lot of fundamental small business marketing principles boiled down into an actionable format.

'Atomic Habits' by James Clear. Truly helpful in establishing good habits. Highly recommend Audible version, he has a good voice and the print version has tiny print and seems overwhelming.

And while you're at it (especially if you're a perfectionist, like most RE agents are, including myself), 'Finish - Give Yourself the Gift of Done' by Jon Acuff.  If you find yourself not executing on good ideas because you need to do more research/don't know every single thing about it, etc., this is an important book and IMO should be required reading before going into business, especially real estate. :)

In RE you're equally in marketing (marketing yourself) and in skill building (expertise in terms of contracts, negotiation, etc.) In other words, you want to be highly competent and then you need to make sure others know you're highly competent, otherwise you're highly competent with a silent phone. :) These books are good starters for how to gain skills that help you in both of those departments. Good luck!

Hi Jason, It sounds like either of these would probably be decent choices, and I can understand why you're leaning towards the broker you feel more connection with.

One thing I would say is that regardless of which one you choose, I think it's a really good idea to get structured training (one one on or in a class, looking over someone's shoulder, whatever) on how to do those thing you'll need to do, like write up a purchase and sale agreement, do a listing presentation, etc. That way you're not scrambling when you have a client and are writing up that first offer (which typically happens after hours on a weekend when there's no one in the office. ;)

The fact that Broker 1 is going to help you reach out to your sphere of influence in the beginning is a very good thing, many new agents get told they need to focus mainly on cold calling and door knocking and don't focus heavily enough (or at all) on their SOI. Not knocking those other prospecting methods, just saying SOI is likely to give you the highest ROI and is way less daunting than trying to win over strangers.

Good luck!

Hi Jason,

I guess it depends partly on what else Broker #1 would be doing besides meeting once a week? Since you mentioned he has a passion for mentoring, it sounds like he might also let you shadow him and/or make himself available for questions/guidance when you have a buyer or seller client, are writing an offer, etc.

If that's the case then that could very well be more useful than formal classes, but again, that also depends on the classes.   Do you know what the classes cover - how to write an offer, do a listing presentation, etc?

Sorry to not be more definite but a lot of the answer depends on what the training and mentorship being offered by each office and broker entails - I realize it might be hard to know all those details up front.

@Danzic Knaub You're welcome, glad it was helpful! :)

Hey Danzic,

Congrats on passing the exam and embarking on your new career!

I think your current job, which I understand you're totally sick of, has hours that are pretty good in terms of working around your new real estate career. I'm not sure if you're considering keeping that job or if you're inquiring about how to structure a different job around your real estate hours, but using your current work schedule:

- Most people work regular hours and want to see houses in the evenings and on weekends. Seeing as you're done at 3 pm even on weekends and don't work Monday-Wed, I think that leaves a lot of quality 'real estate' time. The main bummer is that it will be hard to hold open houses for other agents (to pick up buyers) because of the Sunday afternoon work time. Any chance you could get off earlier on a weekend day?

- In terms of how much time you spend, one thing that is super helpful to do from the beginning to increase the ROI of any time you spend is to work 'smart' by capitalizing on everything that you have and acquire in terms of connections with prospects and people you already know. Most new agents get told they need to cold call every day, but virtually ignore their SOI (sphere of influence, people who already know, like and trust them) and/or have no working plan in place to connect with these people and new prospects regularly in a way that shows the agent's expertise. It's not an overnight thing, but it's like putting money in a high-interest account and increasing that interest at regular intervals along the way - it's HUGE over time.

So practically, this means:

- Letting your SOI know you're in real estate now and would appreciate their business and referrals.

- Finding a comfortable, 'you' way of asking people for referrals in a relaxed manner, so it doesn't feel weird. And then throwing that out there a lot.

- Ask for referrals in a PS in your emails and also in your voice mail greeting, so it's automated. (For some reason we generally just don't like to ask for referrals.)

- Communicate with your SOI twice a month, can vary between email/postcards/something else. I like the Brian Buffini method of using things that demonstrate competence and character at the same time (I don't personally use his marketing but I think that's a great concept.)

- Start early on getting exposed to higher end properties by going to open houses, looking at how they're marketed, etc. I don't mean super high end, which would typically not be realistic for most newer agents, but simply 1.5 to 2 times the price range that you may find yourself starting with if you end up working with a lot of first-time buyers. In 5 to 7 years they'll be using you to sell their first home and buy another one in the higher price range anyway, so don't do what I did and wait 5 to 7 years to get comfortable with higher price points, it's years of potential income lost.

Yes you still have to work hard and put in the hours, but any question about hours relates strongly to the ROI you get on those hours, which in my experience can be greatly increased by those things I mentioned.

If you stick with your current job for a while it may relieve a lot of pressure and allow you to grow in real estate without feeling under the gun. (I'm no stranger to the restaurant business and can understand why you're ready to move on. :) That being said, I don't know any agents who have stayed with a second job for years, I think I'd be looking at keeping it 6 months and then re-evaluating in terms of time, income, stress, etc.

I hope this helps, good luck!

Cheers,

Irene

Are you asking about trying to figure out the capitalization rate? It seems you're saying the property would be worth $250K after you'd invested $30K in a rehab, from a purchase price of $175K. I'm not an expert investor but cap rate is pretty straightforward, net operating income divided by purchase price, which in this case $205K ($175K + $30K) is the 'purchase price' amount you could use seeing as it sounds like that's what you're going to spend to end up with a property in the condition you want it to be rented in. (There may be other ways of taking into account the rehab cost but this is a simple one.)

If so, then with yearly costs of:

9500 + 800 + 1200 (no sewer cost?) = 11,500

And revenue of (1800 x 2 x 12) x .95 = $41,040

Net = 41,040 - 11,500 = 29,540

**Investors on BP can give you a better idea of how much per year you should also be counting for yearly maintenance, yard care, etc., which weren't on your list.**

But just using the numbers you have here, 29,540 / 205,000 = 14.41% cap rate.

Whether or not that's a good deal depends on going cap rates in your area, it would be ridiculously good for my area but if rentals in your part of the country typically sell at 16% or 18% then that would mean the cap was on the low side. And obviously it will be a bit lower once you add standard costs for maintenance, etc. into your yearly costs total.

Also I know this is a late add-on but figure out if you're having the payments managed by a contract payment service or not. IMO safest bet is probably to do that seeing as then they are the neutral third party responsible for tracking payments, holding the deed of trust, and providing the payoff statement when your client pays off the loan, etc., rather than having the seller do this. (Risk of seller doing it is that people die, lose paperwork, etc.) Typical charges in my area are a setup fee of a couple hundred dollars and then around $15 per month, I know it adds up so it's up to the buyer to determine their comfort level with either choice. Hope your deal is going well.

Hi Andrei,

Just checking:

- Taxes are 9500 per year?

- What is the 'after-250K'

It looks a lot like the form is just for prospective clients. In WA state I would simply be required to disclose that I'm a real estate broker, as you have done, not present them with the Law of Agency, which is the equivalent of your TREC form and addresses representation in a real estate transaction. However, it's a TREC form and for an absolute answer I would contact them, they will give you the 100% sure answer.

@Jeremy Morton, happy to help and good luck to you! If you want to DM me questions in the future you're welcome to do so, it helps me to know what specific issues are coming up for newer agents and I'm happy to share my two cents - for whatever that's worth. ;)