All Forum Posts by: J. Gary

George, I use agent's when I buy. I am on top of what is available through my own research. I have found that seller's agents are more eager to work with and close offers from me vs other agents because they can get more commission on my offer through dual agency.

Hi J: No, cash, no, and the seller doesn't know or care what I do with the agent after the deal closes.

Like I said in my post, if I sense any funny business going on, then I let the listing agent know up front that I'm not interested in his or her parlor tricks to bid the price up and that I am willing to pay him of her cash to not waste my time or money.

At the end of the day, I am paying to cut through the games because I don't have the time or patience for them.

I'm going to be very candid here. I had a situation with a Fannie Mae deal about a year ago, where the agent straight up told me the servicer would "accept my offer" if I greased his palm a bit. This was of course after going back and forth with the obligatory "best and highest" and "multiple offers" situation. I "increased the agent's commission" and got the property.

I've got another bank owned property I'm buying now. The agent told me there was another offer that came in "right after mine" (after I sent him POF) and I already knew the trick he was trying to pull. After I told him I would add $500 to his commission if he can get it done without the "bidding against myself" bs, the "other offer" mysteriously disappeared.

This has happened to me too much.

I try to look at this reoccurring dilemma quantitatively to provide me with the logical reasoning I need to keep me from flipping over the nearest table every time I get the sense I'm bidding against myself.

Say a house is listed and untouched at $50,000 and I come in at $45,000. The agent knows he might be able to eventually get me to increase my offer by $15,000 to $60,000 with a bit of acting, and if he succeeds, he would make $450 more at 3% commission. But how much longer would it take him to bs me into thinking there is another offer? And during his "performance", what's the chance a higher offer comes in? Answers: 1) Too much longer, and 2) 100%.

Time is money, so I cut straight to the chase and remove the agency risk by rewarding him with what he would have tried to scheme me into anyway, save possibly thousands of dollars, a great deal of time and undue stress, and end up getting to property.

If I have to pull this out of my play book (which is not that often), I do so without hesitation. These agents in my market are hungry, and the banks are not putting enough food on the table for them. They have to eat somewhere, and I don't have a problem feeding them if they can serve me.

I wish it didn't have to work this way, but I would rather make it happen than spin my wheels over-paying for property.

Thanks everyone for the input and support.

Mark, most of these are near the south loop in the city.

Joey, in my market, you can get a newly rehabbed 2br/1ba condo for ~$30K and net $700 or so monthly after conservative estimates for HOA and taxes. I wouldn't even look in the direction of a 1 br.

In my opinion (and with my model) it makes sense for me to buy condos not just because of the high ROI, but really because of the fact that I can sell it to more different types of borrowers.

For example, I could flip the condo to a cash buyer at $50K (they'll make 15%+ annually) or I could flip it to a retail buyer at $60-$70K that would easily qualify for a $500 a month mortgage payment.

This is assuming the the appraisal comes in, and the condo building meets what ever standards the bank is imposing.

Of course there are risks like HOA fees going up 100% in a year, special assessments, runaway taxes, etc. but these are risks that should be adequately researched and accounted for before you pull the trigger.

that's my 2 cents

Thanks for the info, Dion, I had seen this earlier, it's very informative.

Steve, you're right, I misunderstood J's response, thanks for clarifying.

Brad, thanks for your input. I've discussed with banks, but none so far have expressed interest in getting involved, but I'll keep searching.

To Will's earlier point, pursuing another private investor with more reasonable terms to do the deal seems like a pretty good solution as well. My lender is more like an equity partner with the amounts they charge me...

Thanks Will, great pointers!

J: Thanks for the advise. I'm trying to convince my lender to let me do exactly that. But they don't want to give me the money to do that first condo flip because they think I won't be able to get them out of it with a retail buyer (it can get done).

I'm trying to figure out if there is another creative way I'm not thinking of that would allow me to exit this thing outside of using cash buyers or conventional loans. The most obvious I suppose is to find another lender, but we all know those are few and far between.

Ed: let me know if you find that condo in Whalers, I want in!