All Forum Posts by: Russell Brazil

Hi Sasha,

Thank you for your response. My agent has found the financing contingency states that if financing is not obtained due to a low appraisal, the contract is void, the EMD must be returned to the buyer. The title company replied that when a contract is cancelled, they do not assume anything for the same reason. what they need is a signed agreement between seller and buyer telling them who gets the EMD. if there is no agreement, they will continue to hold funds until there is a mutual signed agreement. Seller is not willing to sign the agreement, he is being very difficult now.

Your thought is appreciated.

Hi everyone, We are new flippers in desirable towns where remodeled homes sell for 1.8m - 2.5m or more. I am having trouble understanding how paying the realtor 100k in fees on the resale alone (not including what they get paid when they are used on the buy) is acceptable. I searched other threads on BP about this, and the explanations were about a 400k home, for example, that works out to a modest amount per hour. However, this explanation no longer makes sense when it comes to homes that are much more expensive. Why is it not common to negotiate flat fees that are more reasonable? Why is it not enough for a realtor to get paid $10k for their service? I think that's a nice amount of money for their work. There is no other  profession where someone makes so much money for doing so little. I find it difficult to wrap my head around, and I'm looking for a better solution. 

I understand they service builders/flippers by advising them on what's best for their investment and managing the selling process. Still, even lawyers don't pay such high fees for professional time spent with clients.  

@Nina Diehl what Property Class are you buying?

How have you adjusted your expectations to match the Property Class?

@Russell Brazil is Patterson Park a decent rental area?

Here's some copy & paste info you might find interesting:

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Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

• Property Tenant Pool: closely linked to location, but not always.
• Property Location: closely linked to tenant pool, but not always.
• Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.

Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Quote from @Russell Brazil:

Quote from @Ken M.:

Quote from @Russell Brazil:

Quote from @Ken M.:

Quote from @Russell Brazil:

Quote from @John Clark:

Every administration has turnover. What are the numbers for this point of time in the Biden administration, Trump 1, Obama, ….?

 Through the 1st half of February there were exactly 9 more units of inventory than in Feb 2024.

And in Today's News

Kash Patel Gets to Work – Immediately Moves 1,500 Agents from Headquarters Building, 500 FBI Agents Moved to Alabama

May be a good time to be selling in Alabama.

DC metro area has a population of 6 million. Birmingham Alabama (where the FBI field office is) has a population of 1.2 million.  These numbers are not anymore than if a Wal Mart opened or closed. There is no statistical significance to this. 

That's a potential jump of 5.2% of active listings in one day. That part is interesting.

By the way, comparing 5,000 families forced to move or quit, to the whole of the population isn't what I'm interested in. I don't think anyone thinks the entire population of D.C. is going away anytime soon.

It's "what is the change in real numbers of government employees in D.C. as a result of decisions made by the administration in 2025". We won't know until next January but it's interesting to watch and see if promises to reduce the government are kept.

There is talk of rescinding 200,000 jobs that haven't met the requirement to become permanent. An additional 70,000 seem to have accepted buyouts. The Newest IRS agents are being discussed as being sent to the border to become default border agents. And the chef in the food cart in front of the House Building was let go. That's a big one. ;-)

 And I believe  FBI agents salaries are somewhat higher than Walmart salaries.

 Yeah, you legit with every post continue to show us you have no clue how the world works.

100% of people who lose their job don't own their houses, 100% don't sell such houses when they lose their jobs.  

@Russell Brazil: As a realtor, you may have an interest in the whole of D.C. and it's entire population. I get it. But that isn't what this post is about. This post is about standard deviations of a sub-set as a result of a specific change in the local  economy. 

Actually, when I got my "A" in Statistics, it's because I understand how the world works and I can spot trends. You start with a base line and introduce variables to determine their effect.

You can see what trends have happened if you choose to, that may be of interest to you, but that isn't what currently interests me. I can find that information very easily.

Not all people in D.C. work for the government, or so I am told, so this applies to  *only* the specific sub-set of those who receive a W2 (not welfare) from the government for working in D.C. I wish I could make it simpler to understand, but I am at a loss if that isn't clear enough.

In one year's time, we will have a much clearer picture of how many people in D.C. who collect a W2 from the government (not including welfare, Social Security, Disability, Graft, payoffs, etc) have "left the payroll".  We'll recalibrate how many housing units have been built, occupied, turned into rentals, sold and so on to see if the "so called" layoffs being bantied about actually happened. The calculation anticipates the fact that not not all who work for the government own a property and not all who lose their job sell their house. 

I make the assumption the number of solds will be up or down, the number of employed by the government in D.C. will be up or down and there will be some information about what people did during that time frame.

This is not rocket science, but we can't know the answer until after it occurs.

 Since you like presenting how many houses have sold, (lagging information) etc - why not tell us how many housing units are vacant and how many are rented rentals and how many are vacant rentals?

Quote from @Ken M.:

Quote from @Russell Brazil:

Quote from @Ken M.:

Quote from @Russell Brazil:

Quote from @John Clark:

Every administration has turnover. What are the numbers for this point of time in the Biden administration, Trump 1, Obama, ….?

 Through the 1st half of February there were exactly 9 more units of inventory than in Feb 2024.

And in Today's News

Kash Patel Gets to Work – Immediately Moves 1,500 Agents from Headquarters Building, 500 FBI Agents Moved to Alabama

May be a good time to be selling in Alabama.

DC metro area has a population of 6 million. Birmingham Alabama (where the FBI field office is) has a population of 1.2 million.  These numbers are not anymore than if a Wal Mart opened or closed. There is no statistical significance to this. 

That's a potential jump of 5.2% of active listings in one day. That part is interesting.

By the way, comparing 5,000 families forced to move or quit, to the whole of the population isn't what I'm interested in. I don't think anyone thinks the entire population of D.C. is going away anytime soon.

It's "what is the change in real numbers of government employees in D.C. as a result of decisions made by the administration in 2025". We won't know until next January but it's interesting to watch and see if promises to reduce the government are kept.

There is talk of rescinding 200,000 jobs that haven't met the requirement to become permanent. An additional 70,000 seem to have accepted buyouts. The Newest IRS agents are being discussed as being sent to the border to become default border agents. And the chef in the food cart in front of the House Building was let go. That's a big one. ;-)

 And I believe  FBI agents salaries are somewhat higher than Walmart salaries.

 Yeah, you legit with every post continue to show us you have no clue how the world works.

100% of people who lose their job don't own their houses, 100% don't sell such houses when they lose their jobs.  

Quote from @Russell Brazil:

Quote from @Ken M.:

Quote from @Russell Brazil:

Quote from @John Clark:

Every administration has turnover. What are the numbers for this point of time in the Biden administration, Trump 1, Obama, ….?

 Through the 1st half of February there were exactly 9 more units of inventory than in Feb 2024.

And in Today's News

Kash Patel Gets to Work – Immediately Moves 1,500 Agents from Headquarters Building, 500 FBI Agents Moved to Alabama

May be a good time to be selling in Alabama.

DC metro area has a population of 6 million. Birmingham Alabama (where the FBI field office is) has a population of 1.2 million.  These numbers are not anymore than if a Wal Mart opened or closed. There is no statistical significance to this. 

That's a potential jump of 5.2% of active listings in one day. That part is interesting.

By the way, comparing 5,000 families forced to move or quit, to the whole of the population isn't what I'm interested in. I don't think anyone thinks the entire population of D.C. is going away anytime soon.

It's "what is the change in real numbers of government employees in D.C. as a result of decisions made by the administration in 2025". We won't know until next January but it's interesting to watch and see if promises to reduce the government are kept.

There is talk of rescinding 200,000 jobs that haven't met the requirement to become permanent. An additional 70,000 seem to have accepted buyouts. The Newest IRS agents are being discussed as being sent to the border to become default border agents. And the chef in the food cart in front of the House Building was let go. That's a big one. ;-)

 And I believe  FBI agents salaries are somewhat higher than Walmart salaries.

Quote from @Russell Brazil:

Quote from @John Clark:

Every administration has turnover. What are the numbers for this point of time in the Biden administration, Trump 1, Obama, ….?

 Through the 1st half of February there were exactly 9 more units of inventory than in Feb 2024.

And in Today's News

Kash Patel Gets to Work – Immediately Moves 1,500 Agents from Headquarters Building, 500 FBI Agents Moved to Alabama

May be a good time to be selling in Alabama.

Every administration has turnover. What are the numbers for this point of time in the Biden administration, Trump 1, Obama, ….?

@Lexi Blocksom suggest you discuss in detail with

You've made a mistake thousands of naive investors have made - expecting Class A results from Class C & D properties:( 

In general, you'd want to compare what you can sell the property for now versus what it would cost to update it and what you could then sell it for. Two concerns:

1) How much of the repair investment would you get back?
2) How fast would it sell if repairs made vs not made?
- it's tough factoring in carrying costs as they're a "guess". But, they can drastically alter the numbers.

What type of pre-purchase inspection did you have done? How did they miss the electrical & roof issues - or did you just not understand the inspection report?

You may want to have another inspection done to evaluate the plumbing and heating systems as well as having the sewer camera'd. You want to know of any & all problems before spending any additional funds on the property!