All Forum Posts by: Timothy Woolery

I learned a lot about Real Estate, investing, partnerships and what I want from a partner.  What is one thing that you look for when going into a deal with someone?

As a Real Estate Agent it's important to understand the Art and the Science of a deal.  You can buy and create the best marketing, but if you don't understand the art or the science of the deal you will not get the results that your clients deserve.  

It starts off with the Science of the listing price, too high and you will not get much interest, too low and your clients may not get an offer at or above market value.  Market value is not always easy to find, depending on the area and type of home.  

The Art is marketing and negotiation is huge!  

Deal Deep Dive

I met a client in an area where there was very few townhomes, and the area was a sought after and close commute to Minneapolis, MN. I sought out a few sources and did my homework, and due to the demand and developing a very strong Comparative Market Analysis (CMA) I listed for $219. I used RPR and Homesnap, as well as had a second look by a veteran agent. When you list a property there is a lot to get done and a lot of timelines that need to be met. I strongly suggest having a checklist and use the coming soon to prepare your listing for going active.

After hosting several open houses, I was getting mixed reviews on price, I was about to lower it at day 20 of being on the market when offers started coming in.  One family came to 5 open houses and almost had tears in there eyes on how badly they wanted the property. Hint to buyers agents- don't let your clients show that big of a tell at an open house, because the "we have lots of other properties and this one isn't really one they're interested in," doesn't work when their entire family has came in 5 times to look at the home.

I received multiple offers and one came in at $210,000 and I advised my client that we can get more, shortly after we received a counter offer of $215,000. We listed in a "Sellers Market" and that area moved into a "Buyers Market" also the property had very little upgrades and so the market value was $210-$215. 

I was nervous for the appraisal after seeing some changes in the market and the fact that a lot of work needed to be done, I made sure to put together a nice packet and show how I arrived at the price I did. It appraised for $215 and it sold in 60 days, with an FHA loan!

Everytime I listen to the biggerpockets podcast, I always ask what is the art and science that is being used to help investors get the deals and achieve the level of success that they have.

What is the Art and Science of your deals as an investor or an agent?

If you're even thinking about divorce, you may want to consult a family law attorney.  A bad partner is the most expensive mistake you will ever make.

I was in the Army at the time, and knew the importance of stock market investing, but didn't have any knowledge in Real Estate.  I started looking into buying my first house in 2008. The problem was I was still in the Army and stationed in Germany, so it was very hard to get started right away.

I found a partner that was the typical Real Estate Agent, very salesy and kind of sleazy, but he had some knowledge and I needed to have a partner.  I returned from Germany in November of 2010, when the market was just starting to recover.  I was able to find a great deal and bought a duplex off a short sale! This was a great time to buy, because many investors were still very nervous to buy.

I got a great deal, and had a 50% 50% deal. Ultimately the deal was amazing, the property cash flowed over $1K a month and there was no major issues.  I loved receiving the passive income, and doing some extra work on the property was a good stress reliever.  

Things I learned, was how to find deals, and what it takes to own a duplex.  I also learned a lot about who to pick as your partner, and how to set up a partnership.  It's very important to get everything in writing, and to make sure that your partner is not just a salesman, but is someone you can trust.  Nothing really bad happened, and a lot of trouble could have been avoided if we put everything in writing from expectations, to job descriptions.  I did feel like I got sold, but it was an amazing learning opportunity, and now I want to make sure all investors don't feel sold, and everyone I do business with feels like they got a fair deal!  I would rather receive less in each deal, and have my partners feel good, and do more business with me, than get more and not receive another deal.  

The last and most expensive lesson learned, was this: Don't cut corners to save a buck! Every time we bought a cheap appliance, we basically paid for the most high end appliance on the market. It's better to have a rental property with solid appliances, then save $200 on cheap junk, that you will spend $400 in repairs for down the road.  

Overall this property netted me over $40K and was a great learning experience.  I would be happy to talk more about this, and look forward to hearing everyone's first deals!