All Forum Posts by: Tim Johnson

Go to your county website and from there go to the sheriff’s department. Almost all sheriff’s departments will have public reports available that are connected to an interactive map.  Most of these maps keep various crimes and “incidents” available for up to 90 days  

Hi Jennifer, there is no "standard" for how splits happen in real estate brokerages, or for teams within those brokerages. 

Are you an independent agent working within a brokerage? If so, you should have a clear contract signed with your brokerage stating all the splits and expenses that are yours. Ideally this would be clearly explained to you prior to joining the brokerage.... but often is not.

Are you on a real estate team that functions within that brokerage? If so, you should also have a contract signed with your managing broker stating the exact splits.... the contract usually spells out the benefits you receive (training & leads being the most common), as well as expenses that you need to cover (postage, possibly supplies, folders, etc.)

Many beginners are unaware of "how things work" and so just feel grateful to have anybody "take them on" and show them the ropes. It's usually not until you're a few contracts in that you begin to realize how much of your check is going to "team" or "brokerage". For many, the trade-off is fair at first because beginners need a lot of help getting through their first few deals.

Some brokerages have a sliding scale with their splits - 60/40, 70/30, 80/20 - depending on how much volume you do. Other brokerages have a straight rate (e.g., 70% to you, 30% to company dollar) with a yearly cap (e.g., mine at Keller Williams is 18K, meaning that if I pay off the cap I can keep all the commission.... until the year is over, and the cap starts over again). 

Demand clarity from your brokerage.... understand the trade offs... and in the end interview with a few different brokerages until you find one that seems best for you. 46% split to company dollar is HIGH.... no matter what firm you're with. You better be getting some serious training, tools, and leads to make that number work.....

Hi Jason, so as with any investment property - you need all three totals - income, expenses, and finances (bank terms) in order to properly analyze whether this deal makes sense for you or not. Once you've got a price.....you can run the numbers.

Income is usually rent (could also include extras like parking, storage, and laundry...) - market rent rate for your duplex in your area can be quickly researched through zillow, rentometer, etc.

Expenses are usually taxes, insurance, capital expenses, maintenance, landlord paid utilities, property management (unless you're doing this yourself), and vacancy (calculating for when units are either in transition, empty, or inhabited by non-paying tenants).

Finances are the way you'll pay for this. If you aren't paying with cash you'll have a mortgage that will need to be covered each month.

With this data in hand..... (most of it you can find on public sites, get quotes from vendors, or get better and better at guessing) you'll be able to rather quickly see if it's a good deal for you. Many investors use excel calculators to speed the process - and Bigger Pockets has several good ones..... 

This may not be helpful, but there's a free webinar tomorrow evening (by a BP regular, Chad Carson) about "driving for dollars" that you might find interesting. I think this particular webinar may be pushing or using a specific software, but even so, there might be some good tips:

https://event.webinarjam.com/go/live/32/8vppqin7u05u5xs332

Check it out....

Hey Joseph, welcome to the forums. It's easy to be overwhelmed at first. There's really no right answer to your question.... but from conversations I've had....and reading on BP forums, I bet that over 75% of REI folks start by purchasing another home as their primary.....and renting out their present home. You learn tons of things all at once.... home purchase, lending, insurance, landlording (or possibly working with prop management), etc. Frosting on the cake would be house-hacking as you make this move, but lots of folks are not in a position to do that. Anyway, just getting started is a kind of success already. Good luck.

Hi @Account Closed, I'm not sure about your Calgary market, but in most of the USA a 5-10K LOC won't provide you with much of a start. And hard money / private lenders like to partner with folks that have a proven record of paying them back...i.e., can flip and build houses. You're on the right track though with your question, in other words.... you're starting. Congrats. I would recommend the regular:

1. get rid of all credit card debt if you have any.

2. live frugally and save like crazy until you have that capital (25-50K?) It happens faster than you think when serious.

Yes, there will be a time when you can partner....and leverage other peoples' money..... but in the beginning consider it normal to bring a bit of your own cash to the table. Best wishes....

@Seth Ricketts  "Since it doesn't really cost a lot of time or money to get a license, I'm thinking that it may not be a bad Idea."

Being an agent has helped me immensely in learning about all things real estate. Any work related to real estate and REI will be of great help to you. Having said that, being an agent is a lot harder, and takes a lot more time than many think.... the initial fees and overhead to "start this business" are admittedly lower and less than many professions. But continuing to pay MLS dues, realtor dues, desk fees, continuing education requirements for state licensing, etc. - can add up. In short, there's no right answer for you - but you may find it more beneficial to do the reading, studying, and joining local REI groups if your own investment is the end game. Just my 2 cents..... Best wishes!

Hi @Mike Schorah, you sound like a "half-empty-glass" kind of guy! :-)

Seriously, everything you point out is true....every single strategy you mentioned has failed for somebody. But it's also true that every one of those strategies has been hugely successful for a great number of folks. So yes, I guess you're back to that issue of risk.... at some point you'll have to take a bit of risk in order to succeed.

Where do you feel YOUR specific strengths are? What do you LIKE doing? After a year and a half of studying real estate investing.... is there nothing that excites you, or makes you want to "give it a try?" It's a bit hard to tell from your post just what your goals might be?

As forum members hear a bit more detail about your actual situation (location, amount of money to invest, specific goals, interests, etc.) there will be no lack of suggestions as to which strategy might be a fit for you. Best of luck!

Hi @Alex Song, welcome to the forums.....

Whether you're doing a cash-out refinance, or getting a HELOC, those instruments are dependent on the present equity you have in your property. I may have misunderstood your situation, but if you just recently (last December) purchased your primary residence with 20% down, it wouldn't appear that you have that much equity to date. Is that the mortgage that you're planning to refinance? With a cash-out refi you can typically take out only 70-80% of your equity. Interest rates have jumped considerably in the past few weeks, and cash-out refi rates are usually a bit more than standard rates to begin with. It doesn't sound like a very viable option to me. Help me understand if I'm missing something here? At any rate, good on you for thinking and planning...

@Darrell B. - As you've indicated yourself, there are a few too many variables involved to give a quick answer. While this won't really answer your specific question about cashflow, you might consider this: that over time (5 years, 10 years) the important factor for an investor is not so much the ROI (return on the initial investment) but ROE (the return on your equity). Generally, as your equity grows, your overall returns on that equity will decrease. Which is why many investors regularly sell properties every 5-7 years, reinvesting their equity in more and larger properties.

So to get back to your question of cashflow..... and whether it actually grows after 5 or 10 years.... an investor will know that even if the cashflow increased by 100%, the amount gained would pale compared to the possible gains to be made from a reinvestment of that equity.

OK, for a moment forget all that big picture stuff and let's get back to what you were asking. I'm finding that in my market (WA), with the severe appreciation and resultant increase in property taxes, as well as increases in insurance, labor, material, and general inflation - you can go backwards VERY QUICKLY in cash flow on your properties if you aren't keeping a close tab on rental rate increases and making sure they happen.