All Forum Posts by: Kim Knox

I think it is fair to reveal that sometimes disloyal or unscrupulous Clients make it difficult for a Broker to have faith in humankind.  However, we must dust ourselves off and get back to work.  It is not healthy or smart for us to wallow in our disappointments.             

I have seen Brokers absolutely devastated by disloyal Clients.  I have seen their generosity, their time, and their wide-eyed optimism being stolen from them.  I have even seen them go bankrupt simply because they can't recognize when a supposed Client is all talk and no action.        

I choose my Clients, and I work for the best and the brightest.  Not only are they the best and brightest, they are nice too!  If I get the feeling they want to screw people over, I quickly excuse myself from the equation. I love the real estate business, in part, because I feel great about how I treat people. Not just my Clients, but customers as well.      

I am really proud to be a Real Estate Broker.  Your assertion that 99%+ of Agents are unethical is unfounded and a bit dramatic.  All I can do is hope that when you have a positive experience, you decide to  broadcast that to the world. 

@Stuart Birdsong and @John Kai

Thank you.  The Realtor in me wants to sell everything, LOL.

Before this purchase, all of my other rentals BARELY pay for themselves, but I am very glad I have them.  I am pretty jazzed to have something that actually makes money. 

John, your calculations about CD rates blows me away.  Makes me love real estate even more!   Mind boggling.    

No, I do not need to sell.  I would use the proceeds towards another flip.  

My goal has always been to pay off at least 10 rentals and live on that money for my retirement, so I agree with your strategy.    

However, I do make very good money on flips, relatively quickly, which helps to fund my rental purchases.    

Hi Everyone!  I bought 5 units about 4 months ago.  2 duplexes and one home.  All on one tax lot.  I will generally buy one rental or one flip at a time, so I think I am letting the additional options of having 5 units throws my equilibrium off.  I am finding it difficult to commit to a decision, so I am looking for some feedback from experienced investors.         

I have submitted a plat review to divide into 2 tax lots, which should be finalized tomorrow, at the expiration of the public review.  I do not expect any objections.  One tax lot has one house and one duplex, the other tax lot with a duplex.  When all is said and done, the lot split only cost around $10K, including improvements and survey.  It also increased the value tremendously because now someone can buy from me without requiring a commercial loan, so the pool of buyers is exponentially larger. (5 units on one tax lots requires a commercial loan). 

I originally bought this not really knowing what I was going to do with it.  Keep as rentals or sell off one of the duplexes or the house.  My preference was to sell one of the duplexes or the house because then I would use that money towards my next flip.  However, i haven't owned it long enough to work for a 1031, so my taxes will be at 50%, which makes me feel sad, very sad. =)       

The house is worth $140K, each duplex is worth $110K.  Total value $360K.   My incoming rents are $3K.  $550 per unit on the 4 duplexes, and $800 for the house.  I purchased for $250K.  I am certain the values I am giving are conservative and would allow for quick sales.  If I finance it once the lot split is complete, my monthly payment will be  $1400 including taxes and insurance.  Lets assume my other expenses will total $400 a month (property management, garbage, random fixes and expenses), making my total out of pocket $1800. 

It is important to mention that the condition of duplexes and house are good, very clean.  

First, would you sell any units?  Second, if you decided to sell one of the tax lots, would you sell the duplex on its own lot ($1100 incoming rent), or the home and the duplex on one lot $1900 incoming rent)?         

Thank you for your help.    

He knows, LOL.  He doesn't need you to tell him.  =)    

Who cares, your client isn't interested anyway.  

If you want to make a point, you can let him know that your Client would have to come out of pocket to pay your commission because you are not willing to work for just the 2% being offered.  However, I would not bother, their is no winning in this situation, you don't have an interested Client.  

It is totally unethical to limit your search criteria on commission paid.  If you require a higher commission, you just need to specify that to your Client, who will have to make up the difference, if they agree.   

Congratulations Jerusha!  You are about to join one of the best businesses on the planet!  Don't be discouraged by the articles you are reading.  It is difficult, but it is interesting and thick with opportunity.  For me, Real Estate is an unending source of education and provides a nice lifestyle.  It also requires you have to make hard decisions.  You have to commit to be good, fair, honest, and diligent in your business, just like you have to in your personal life.    

I run my business with a lot of compassion and I pride myself on working hard and being easily available.  My business is largely referrals at any given time because my Clients trust me.  They should!  I have built that trust, and continue to build it every day.          

@David Roberts Characterizing most of us as liars and scammers is a blatant misrepresentation, and it is offensive!  I have worked with so many great Realtors over the years, that would be heartsick to read your post.  I don't pretend we are all great, but common!  

I think smart Realtors go where the business is. If REO is where the lions share of opportunity is, then that is the direction I am going in. If the business is working for conventional Buyers or Sellers, then that is the direction my business is. Successful Realtors smell opportunity and shift their business and their education in that direction.

When REO was hopping in my area, I became an REO Broker. Now that is dead, I went back to working almost entirely for conventional Sellers. Working REO was one of my most challenging endeavors. It is very difficult, and really made me a much better Broker. I have a small, no name brokerage. I run a very good and honest business, as do all of my Agents. @Russell Brazil Your classification of small brokerages is surprising.  I very carefully pick my Agents, as they are representing my local brand.  Some franchises just take any agent that has a heartbeat.  Their are bad apples at both small and large companies.      

@Jerusha Holder The difference between a successful and unsuccessful Agent usually circulates around intelligence and ones ability to priorities and discriminate between who is a worthwhile Client, and who is wasting your time and knowledge.  I am not saying their are not bad apples who are licensed Realtors, but you have an opportunity to be one of the best!

Sure, here are the rules direct from the IRS specific to selling a principal residence.  If people are willing to move every 2-5 years, you can really add to your income through real estate if you plan.  Many people are not wiling to add to their income this way because........well first, moving is a pain.  Many who have kids prefer to stay in the same home.   http://www.irs.gov/uac/IRS-Issues-Home-Sale-Exclusion-Rules 

Obviously you need to check with your accountant to make sure all is good-to-go.    

On non owner occupied investments, you actually have to re-invest your profits into real estate to avoid the taxes (1031 exchange).  With principal residences, you could use the money to pay off bills, take a vacation, college tuition, whatever.  You are not limited to putting it into real estate, which is a fundamental difference between this particular tax exclusion.  It is a tremendous gift from the government.  I just hope it doesn't go away.    

I am not an accountant, but paying attention to these types of exclusions can sure make a difference to people financially.

You have to consider that you are already working a (more than) full time job.  Your competition is working full time trying to find the deals, many of those have the cash to offer a quick close, and are fluent in answering the tough questions a potential Seller might have.  It is a full time job to locate and work profitable flips.      

I don't mean to sound negative,, but to me, it sounds like you are not in position to risk.   You have a family to support, and you have indicated you are already in financial trouble.   Real Estate is high risk, even to a seasoned investor.  

Are you a homeowner yourself?  If you are not, that should be your first step in real estate.  Buying your own home and occupying it 2-5 years, you gain is tax free (I think up to $500K as a married couple).  I ask because an owner occupied home gives you the most tax advantage and the least risk (your reducing the rent you pay at the same time you purchase a home).  

Tax free real estate profits for owner occupied homes are a great way to increase your income.  It is a beautiful gift from the government.    

Taking your classes online is the most desirable because you can take classes at your own pace.  I have used OnlineEd or Proschools for Continuing Ed requirements, but they also offer license education in most states .  Try to get through them as quickly as possible because it does require significant memorization.  It is not rocket science, but don't let people fool you, it is not easy, it really requires your full attention while taking the classes and studying for the exams.     

My husband got through all of the classes in under a month, then took the state and federal test.  A billion years ago, when I got my license, they didn't have online classes.   However I became friends with my instructor and later sold his real estate.........so I suppose I can't complain. 

A Broker may not like having you as a Realtor at their company if you are representing yourself in transactions.  Often insurance doesn't cover, and it is an increased liability.  The combination can be problematic. 

However, if you are an investor, it is always a good idea to have your license, even if you have another Realtor represent you in transactions. Knowledge is power, plus you buy access to the MLS.

Plus, if you get your license, and you don't want to represent others, you can always use your license as a way to increase income by referrals.  You could refer Sellers and Buyers to someone at the company you hang your license and collect referral fees.  You just have to make sure the Realtor you are referring them to is following up with your leads and actively pursuing their business.  If you refer business to someone who doesn't secure the business, you make no money.  Find yourself a closer who you personally enjoy as a person.  

Additionally, their are some tax benefits that may come into play to an investor.  For example, because I am licensed in Real Estate, I can write off loss on rentals when others cannot once in a higher tax bracket.  I am full time Realtor, I believe the tax code has some requirements regarding what % of your time your work in Real Estate.  It can be a meaningful difference because it enables me to write off $25K in rental loss per year AFTER I have reached the higher tax bracket.  Generally when you reach a certain tax bracket, you are no longer able to write off rental loss.  This can be substantial if you find yourself writing big checks to Uncle Sam, the family jerk.  I might opt to remove trees, paint the exterior of my rentals, roof, pave, recarpet to reduce my tax bill and improve my properties at once.  I find that even Realtors don't know this.