All Forum Posts by: Larry Zucker

Definitely keep your real name. In fact, I would brand using the color sapphire to emphasize it and consider using it as a one word name (like Madonna or Cher). 

Hi @Sean Baker  The cap rate is the return on cash and is a guide to comparing investments. Unless you are paying all cash for the properties it does not apply and even then does not provide a portfolio valuation (its a percentage, not a dollar value). The approach typically taken is discounting the cash flow (EBIDTA is perfect). The discount rate is the interest rate that an investor might expect to pay for an investment of comparable risk. The idea is to recognize that a $1000 cash flow today is worth more than $1000 cash flow next year. You would run that cashflow out each month, discounting each payment by the interest rate, for the number of months the investment is expected to be held by the purchaser of the portfolio (say 5 - 10 years). The Excel function FV can do the calculations for you. You list each cash flow for each month in the sheet and then apply the FV formula across that row of numbers. The result is the future value of the investment and, by extension, the value of the cash flows over time. Ultimately, you want your first cash flow to be the investor's purchase price and the final cash flow to be the investor's exit price. But at first, since you don't know a purchase price yet (that's what your questions asked about calculating) you can just make the last cash flow the capital gain expected on the eventual exit sale. Hope that made sense. 

Assuming you have not already signed their agreement, the commission is absolutely negotiable. I would push back and tell the realtor you are not paying the admin fee and to take whatever the MLS has for a commission split so you are not being charged an extra $800. Here is NC, an agent must disclose additional fees up front so as soon as you saw the property that agent should have told you about additional fees. I know you have started building a personal relationship with this realtor but the fees they are charging indicate to me they are not acting in your best interest. Business is business so if they will not lower the fees go to another agent.

Hi Nico. I do not know your specific situation, but the big issue most new agents have is where to get leads. Personal contacts only get you so far in the beginning and purchasing leads from Zillow, Realtor.com or Google (and most lead programs are Google oriented) can be pricey.  I suggest finding a broker that has a lead buying program where they buy the leads and when you close a deal you split the commission. Don't really worry and how much the split is at first because it least you have some income at no monetary investment. You may also find you will learn more by being part of a team. Finding a broker you work well with is also key. Good luck!

Rates are definitely going up but are currently still historically low so I would not be concerned about it being a "high" rate because it is not. I would not count on rates coming back down to the 3% range. But the interest rate is really not the issue. The cash flow on the property is what you should be focused on. Getting cash out and reinvesting provides more doors and more cash flow. As long as it has enough positive cash flow all is well. 

This arrangement of having a non-refundable due diligence fee is the norm here is North Carolina. It really puts the buyer at a disadvantage. I would push back and reduce the non-refundable amount as much as possible.

@John Apple As a fellow realtor and someone that has had buyers treat agency agreements like they are meaningless, I believe those agreements - while enforceable - will only keep honest people honest. The damage to reputation is simply not worth the fight. That is likely where your broker is coming from. 

As an industry we are partly to blame. To avoid the bad press we routinely let buyers out of their agreements or look the other way when they break them. Changing that is simply not a battle you are likely to win.  While follow-up is very important, I think it is the connection you establish with those buyers that keep them with you. After all, it is not one sale you are ultimately after but the ongoing referrals that sale can provide that are the goal.

@Cory S.

I agree with Cory. Having a good tenant is gold and losing them because of a raise in rent is not worth the resulting vacancy and unknown new tenant. I try and keep my rents as stable as possible based on increases of taxes and insurance. My general game plan is to price slightly under market and stay fully rented.

@Andre Vitalis

Try, Stephanie D-Atri at Hatch, Little and Young. You can message me for contact details if you need them.

They focus on landlord tenant issues.

@Alan Mills

I would gather those emails and file a complaint with the real estate commission against the agent.

Since you did not use a buyers agent, the agent is working for the seller only. And while the agent owes the seller a fiduciary responsibility, he/she only owes you fairness, honestly and release of material facts ( that is right off the national real estate agent test so it applies in all states). Seems to me there may have been a breach of the fairness/ honest part of that. So let the RE commission do their work and my money says the real estate agent coughs up that interior design.