All Forum Posts by: Peter Stewart

Quote from @Dan H.:

Quote from @Peter Stewart:

I agree with many responses that the 1st step should be to switch PM's. That could make all the difference. 

If you do decide to sell, going off market does not guarantee you will get more money. In fact, typically it's the opposite. According to the 2022 NAR stats, FSBO homes sold for an average of 35% less than agent-assisted sales (https://www.nar.realtor/research-and-statistics/research-rep...). And, 40% of agent assisted sales resulted in a sale price greater than 100% of the list price, compared to only 13% of homes sold FSBO.

Also, 71% of real estate lawsuits come as a result of 1 party not being represented in the transaction.

Bottom line is this - if you want to net the most money out of the sale to reduce your losses, hire an agent. I realize I am an agent and I'm biased, but the data supports this claim 100%. 

Surprise, the National Association of Realtors found FSBO homes sold for less than agent represented homes. I would have been shocked if this was not their finding.

I am curious exactly how they did this as the variables in price is near infinite. Is could be FSBO homes generally are not the most luxurious fixed up properties. I have purchased multiple times FSBO and can state with certainty that the FSBO were not on par of the value of the MLS listings in that market.

>40% of agent assisted sales resulted in a sale price greater than 100% of the list price, compared to only 13% of homes sold FSBO.

Is this any different than buyers feeling market is hot because homes are selling over list price?   Selling over list implies the list was below market whether intentional or accidental.   It implies nothing about getting more for a particular property. 

It may sound like I advocate OP to FSBO but I do not unless he has good understanding of marketing and pays to place on MLS (there are RE brokers that will place on MLS for a fixed cost).

Well, take myself for example. I've been a full-time broker for 15 years and deal with real estate on a daily basis. Sold many hundreds of properties worth hundreds of millions of dollars. I am a professional negotiator. 

Who do you think will get better results selling a home? Someone with my experience level, or a "civilian" that might have never sold any real estate. Even if they've sold a handful of homes, their experience level does not match mine. Why do you think the majority of FSBO's fail and they end up hiring an agent?

So while I understand there may be bias in the NAR stats, the bottom line is that statistically and logically, you should expect better results when using a professional. That applies to most trades. You could watch some Youtube videos and represent yourself in court too - do you think someone doing that will get better results than a killer attorney that has a 15yr successful track record? Sure, they may get lucky once in a while, but 9/10 the attorney will get better results.

I agree with many responses that the 1st step should be to switch PM's. That could make all the difference. 

If you do decide to sell, going off market does not guarantee you will get more money. In fact, typically it's the opposite. According to the 2022 NAR stats, FSBO homes sold for an average of 35% less than agent-assisted sales (https://www.nar.realtor/research-and-statistics/research-rep...). And, 40% of agent assisted sales resulted in a sale price greater than 100% of the list price, compared to only 13% of homes sold FSBO.

Also, 71% of real estate lawsuits come as a result of 1 party not being represented in the transaction.

Bottom line is this - if you want to net the most money out of the sale to reduce your losses, hire an agent. I realize I am an agent and I'm biased, but the data supports this claim 100%. 

Check out Indianapolis! You can get a newer built A class SFR for around $300k. Lots of options in growing areas with highly rated schools, low crime, etc.

It depends on your financial situation. Lenders will typically look at your debt to income ratio along with some other factors (credit score, etc) and determine if you can safely carry the additional debt. So, to truly get an answer here you need to speak with a lender to see if you can qualify for an investment property and if so, for how much. For conventional financing you'll need 20% down + additional funds for prepaids and other closing costs. 

If you use a loan like DSCR then it's all about the property and the income potential, they don't look at your income/debts and your ability to cover the monthly debt. But, you will need some funds for the downpayment (usually ~15-20%, but you might find a lender that will do less).

That is doable in Indianapolis! I talk more about investing in Indy here: 

(www.) youtu.be/ZMxjA-lWUnw?si=zK_Sj6N4TOFF9HQy

Use the BP Agent Finder to locate an investor friendly agent in all those locations. Interview a few in each location and see who you like the best. Make sure they have been working with investors for years, and that they themselves personally invest in the market they live in. A good agent that does all that should have all the referrals you need to build your team.

Main ones to ask for:

1. Property Management companies

2. Lenders

3. Contractors

The agent you work with is the 4th member of the team. Again, I would start with them first. 

Not only can they provide you with referrals to build out your core 4, but they can help with any real estate related vendors - insurance, handymen, painters, landscapers, electricians, roofers, and so on. 

You can get a recommendation for a local CPA as well, but there are plenty of virtual nationwide firms you can work with as well. For example, I use www.therealestatecpa.com and they are awesome. 

It must be location specific. I have STR's in a few different states, and I have not changed my fees, nor have I seen my competitors do that.

I have a feeling you're seeing those affected by lower occupancy raising rates and/or passing costs on to their guests (like local occupancy taxes) to try and make up for the loss in revenue. 

Now, you did mention that you see $200-500 in addition to the nightly rate. Nearly all STR's will pass the cleaning fee on to the guest, and most booking sites charge a tax and a fee for the guest to use the service, so seeing $200+ in fees in addition to the nightly rate is common. $500 seems high, but if its a large luxury property with a pool, they will have a much higher cleaning fee than a small 2br condo would.

I completely agree and have this conversation with people on a near daily basis. 

Another thing people fail to consider is that wholesaling is like the wild west. There is no oversight, no licensing, etc. Anyone can call themselves a wholesaler and run off with your deposit, and you have very little recourse (if any at all). 

The other issue I'm seeing in my market (Indianapolis, IN) is that when a good deal actually comes through the wholesale channels, it creates a bidding war and the price gets bid up to a # that no longer makes sense. In Indy we've had low supply for years along with a large increase in investors looking here, and so there is a huge build-up of buyers looking for deals and they're on all the wholesaler email lists. 

For example, a few months a deal came up with a "starting" price of $295k. I put in a bid at $305k. They had a bunch of offers and it sold for $325k. I projected the ARV to be $350k and it did need some work (paint, carpet, a few misc repairs). I was going to make a quick $10-15k because it was a light/easy flip and my margins are low because I'm an agent. It made zero sense at $325k.

Quote from @Ken Boone:

Quote from @Peter Stewart:

 Every time I go down that way it's absolutely slammed with people. From what I see the demand for the area is still extremely high and I don't see it changing anytime soon.

Not been my experience.  I am in town a LOT.  Multiple trips through the summer.  Not near as much traffic.  Weekends - sure, weekdays not so much.  There is a huge decrease in traffic compared to the last 2 years overall.  My cabins are down about 8% from last year, which is still pretty darn good, however, my cabins have pools and or views.  However, talking with my cleaners, they have felt the pinch this year as well, as overall, they have seen a decrease in bookings in all of the rentals they support.

There is truth to what you said about the mediocre middle for sure.  You hit the nail right on the head with that one.

I have only owned this one for a year, so I don't have much to compare it to. I have heard 2021 was insane (in a good way). Personally my occupancy increased this year, but I attribute that to a good PM (I made a switch in Feb). 

The biggest change I have noticed though on both of my STR's is that the bookings are made way less in advance than they used to. Most of my reservations are 2-3 weeks out at most and I get plenty of last minute ones too. Last year I was booked out several months in advance.

To truly be successful as a listing agent you have to have the total package. Sellers often interview more than one agent, so you have to bring your A game at all times. 

But, to answer your question, I think confidence reigns supreme. If you lack that it'll show. You may have the most expensive suit on and have prepared the most in-depth CMA, but the lack of confidence will overshadow everything else and they won't believe what you are saying.

Appearance is #2. Closely tied in with confidence. You're going on a job interview so there is no excuse not to dress your best.

Establish a relationship is #3. This has some importance, as the sellers need to like you, and connecting on some level will help accomplish that. 

CMA is #4. If you nail all the above, the numbers almost don't matter. If they like you and trust you, you can dial those in at a later time. You can even do a 2 step listing appointment where you don't even discuss #'s at the first meeting.