All Forum Posts by: Michael Goldsmith

Hey Guys,

I'd like an expert opinion here, if at all possible.  I'm pretty new to real estate investing.  As part of my process for learning/ gearing up to start my own deals, I offered to do property research for a real estate agent, since I have more time on my hands than he does.  He asked me how much I want to get paid for doing the research for him, and I really wasn't sure what a reasonable value per property would be.  

For a bit of context on the info I have readily available to me, I just subscribed to propstream.  It can be a little out of date here or there, but it's generally pretty good.  It makes pulling comps super easy, without having to bug an agent for them.  Plus it has a bunch of analysis tools and marketing bells and whistles on it too.  Now this isn't an endorsement for them, but rather to give a bit of context and that it's software I'm going to be paying for (still in my free trial period at the moment), which is part of my overall costs for doing this research for the agent.  

I also know that some research I'll need to do is a bit more extensive than others- pulling engineer reports, sink hole repair reports, etc.  Those should obviously cost more than a basic analysis of a property.  But bottom line, is that I'm not really sure where to start my baseline for a reasonable amount to charge for doing research.  Has anyone ever done this before, for someone else?  How much do you think I should charge per property?

Anyone want to grab a coffee sometime over the next few days and talk shop?

I grew up near a bunch of home schooled kid.  None of them turned out quite right... socially speaking.  Don't do that to your kids.  Kids need to be around other kids in a social environment.  That's how they learn to be part of a group, and their peer group needs to see them consistently in order to accept them- and that means at school.  Especially  nowadays, most parents don't just let their kids go wandering around the neighborhood in search of new friends.  So just being a neighborhood kid isn't enough.  They need to learn to deal with bullies, and I hope that they don't have to learn that one at home.... lol.  Home schooling keeps kids in a little social bubble, and in my experience, leaves a lot of them socially stunted.  If you can afford a private school, great.  Go for it.  But don't keep them in what is, ostensibly, solitary confinement.

To possibly add some clarity, I think @Jeremy Whiting is in the same boat that many new REI's are in, myself included. We want to jump in but simply don't have the money to do it. Thus, wholesaling becomes an option, as it can get someone in the door to start to build a track record with relatively low risk. It's also learning and practice for a new investor in finding deals and determining whether or not they're worth investing in. The numbers may LOOK good on paper, but if no investor wants to touch the property... then maybe it's not so good, and then it's a learning experience to figure out why, and what to avoid next time. Plus, getting an experienced investor to look over their work and say "yes, this is a good deal" is a learning experience as well- an inadvertent mentor, for lack of a better term. So I totally get where he's coming from.

The numbers look good, but are you sure they're right?  Your expenses are really low, given the value of the property.

It's hard to say what the magic number is.  Do you need the rent from the 2nd apartment to cover your mortgage and expenses and be cash flow positive?  Obviously, more money is better than less, but house hacking is interesting insofar as it's reducing your biggest expense of the month (most probably).  So even if you still do need to put some money into the mortgage every month, what you're gaining (equity) for that money is far greater in value, doubly so if what you're saying is correct and deal allows you to walk into 100k in equity.  That's money you can leverage for another property down the line.  Conversely, if this is what you're trying to earn a living, then you definitely need to be cash flow positive.  So play with the numbers.  See what make the numbers make sense.

I don't think deals are hard to find.  Anything can be a deal.  They are, however, hard to obtain.  That's the tricky part.  I'll elaborate.  Every property has it's number that could make it a "good deal."  More often than not, however, *that* number won't be what they're asking for the property.  Usually, asking price is quite a bit higher than what makes the numbers work.  Negotiate.  Worst case scenario, they don't budge and tell you to go to hell.  Best case scenario, they cave because they want the property gone, and give you everything you want.  If you see potential in a place work the numbers until they make sense, then offer that.

20k in repairs on 10 doors?  I know the places are small, but are you sure about that?  What about the neighborhood?  Vacancy?  

Oh. You're right down the road from me. We should grab a coffee and talk shop sometime. I'm really new too. It would be nice to have someone to talk to about REI, bounce ideas off of etc. I try to talk to my gf, but she just looks at me like I have 3 heads.

That's kind of why I started this thread to find out if someone had any experience dealing with this issue, and whether this was a bad place to invest in.

On one hand, property values are pretty low here, which could net a pretty good ROI on rentals. On the other hand, if the insurance is ridiculous here (I currently rent, so I really don't know), and/ or if a property is uninsurable, well that just pulls the rug out from under that idea. I do keep seeing new buildings being put up in my town, so at least someone's not afraid. Scott, where do you invest, given that you live in the same county as me? Also, may I ask what town you're in? I'm always up for making new friends in the area with like minded interests. I'm in Spring Hill.