All Forum Posts by: Rusty Scott

 Andrew, as an Indy investor and resident, I do agree with you. Indy has never been a rapid appreciation market, and I don't see that changing in the future....though we have had about 5.4% year over year median price increases currently, which is solid.

Historically, Indy had always been a very slow but steady market, with 2 to 3 percent growth. The recession threw that out, like everywhere else...but overall our market didn't see big drops....nor did we have big run ups prior.

Certain areas of town have seen very, very strong appreciation in recent years, while others have stagnated. 

One Interesting fact...Indy is the largest city in the country that is without any natural geographic barriers...and can therefore grow out in every direction. 

I'll add that typically the stock market is much more volatile than rental properties. 

The market may average 8 to 10 percent over the long haul, but it's all over the place getting there. It may be up 40% in one year, and then flat or negative for a couple. And in reality it's more extreme than that....something like the best 100 days make up almost all of the stock markets return over the last generation. If you missed those, you're out of luck. 

The only way to invest in the market, in my opinion, is to do so slowly and constantly, via dollar cost averaging. 

That is quite a contrast from a rental property where one can project with some reasonable certainty, what the income/return will be. 

Welcome to BP....as mentioned, don't worry about not having much to start with. It will preclude you, most likely from jumping into buy/hold investing....but there are many ways to make money in the industry. 

Shawn gave you some great resources and advice above, so I won't repeat!

Your calculation is basically a cash on cash return only. That's one way to look at it, but ignoring principal pay down is short sighted in my view. Also you are assuming zero rent increase and zero appreciation in your calculation.

A more in depth analysis, you'd probably find an IRR in the mid teens pretty easily for your provided example. That said, most of us try to do better than the 1% rule.

You aren't ever required to work a certain number of hours. Brokers are independent contractors, not employees, so your managing broker can't make you do anything. 

That said....you will have to get your license, and hang it with a managing broker. You'll also need to maintain it according to your states requirements, including CE. However it's not a ton, here it's 12 hours per year. 

Finally, you'll have to pay the MLS dues each year...which are reasonably significant.

 That is the average. It's pretty well publicized info. The basic rule in the biz is that 20% of agent make 80% of the money. It may be even more extreme than that.

I agree with you that if you outwork your competition, and are competent, you can do much better than the average. But your initial question was about median income for brokers.

I thought the Feds came out and said rebating commissions to buyers was perfectly allowable as it lowered the cost of home buying.

Kickbacks to others except the buyer? That wouldn't be allowed.

Google the DOJ regarding rebates, they show which states have banned them, only 10 states forbid them. 

The average agent closes something like 6 deals per year, which comes out to under $30k per year. It's why most agents don't stay in the business for long. 

I have to agree with everyone else...first 3% is pretty standard...so I don't see that as a bonus. 

Way more importantly though, you say the market is slow....so going FSBO is really limiting you. 90% of buyers are never going to come across your property...plus buyers agents aren't going to like dealing directly with an owner.

That's a wide enough range that it's really two different worlds here in Indy. I would not buy 30k market value homes in most areas of town. That's not the same as buying a distressed 30k property that needs some rehab with an ARV of say 70k.

'Rehabbed' $30k homes are unicorns.