All Forum Posts by: Trevor Lybbert

Generally, a sale with seller financing would still result in a commission for the agent due at closing. Usually, the down payment will cover commissions and closing costs. Just make sure your down payment from the buyer is high enough to cover these costs and still enough left over as a buffer that would still work for you and the seller.

What I have seen investors do is tailor their ARV percentage based on their market and other factors. After you fully analyze lots of deals, you can get a sense if you need to be more like 65% ARV or perhaps more like 75% ARV depending on the location, property type, investment strategy, etc. That way you can have a bit more accurate of a rule of thumb to help screen deals that will require a deeper analysis.

You really have to look at your competition and see what other mid sized apartment complexes are doing. If no one else charges you will have a tough time justifying that to your tenants. But if there are others that do the same in your area, perhaps charge similar rates to help with your NOI. @Jaysen Medhurst is correct that it will probably be difficult to charge in most rural areas. 

If you do decide to charge, I can tell you administration can be challenging at times. And you or your manager will have to deal with tenant conflicts over inappropriate parking.

Cold calling craigslist and FSBO. Networking at local real estate meetups and folks in industries related to real estate. (Contractors, lawyers, etc) Door knocking. Driving for dollars. All good options.

I'm generally not a fan. The biggest issue is making sure you are following local codes and laws. There are ways to do it, so make sure you check with your local code enforcement. Most folks do not do it legally, hence the name "bandit" sign. Just make sure you are doing it correctly! If done legally, it can generate some leads for sure. 

Well, like all real estate, it comes down to price. Selling land at full market value can take quite a bit longer than houses. But, with good marketing, professional photography, accurate pricing, you can do pretty well. Just make sure that the land is comparable with utilities, zoning, views, etc. If a lot is ready to build, has power, water, and sewer/septic, that is a lot different than raw land in a rural area with wetlands. Keep in mind, that if you have to knock down a property, you have to subtract the cost to do so. Also, just because there is a property listed, doesn't mean that's what they are selling for. But it can be a good indication. 

Good news is there are folks that purchase land at a discount, than sell at a premium with seller financing. Can be a good way to get semi passive income. 

Cap rates are generally used when using the Income Capitalization approach to valuing property. Generally, you're using the income method on commercial properties, such as 5+ unit apartment buildings. Residential properties with between 1 to 4 units, are valued using comparable sales. 

If you get a 5 unit apartment building, then if you increase the net operating income, you increase the value of the property. If you have a 4-plex, it won't be valued off of the income, but only for what comparable properties in the area sold for, no matter how much more income you might be able to get it to produce. 

Some of the reasoning behind it is that commercial properties vary widely, and are mostly investors purchasing commercial properties anyway, and it is easier to compare different properties when just looking at the income. 

Congrats on starting your journey!

The old rule of thumb is: After Repair Value X 70% - Repairs=Max purchase price. There are tons of other variables such as level of rehab, size of the property, how competitive the local market is for flips, level of profit required, etc. It is really just good for back of the napkin kind of math.

You'll want to look at nice, fixed up comparable properties for your ARV. Then work back from there. There's a lot more to it, but that's a quick and dirty answer! Whether or not it is a good deal FOR YOU (specific strategy for your markets, financial situation, level of skill and experience, etc.) , and not just a 'good deal', is a whole different story!

Yes, you do need a brokerage to work for, but that doesn't mean that you will need to be a full time agent or quit your job by any means! And trust me, when you actually start doing deals, you will want somebody that can help you out. 

I would talk with as many local real estate companies in your area and just let them know your situation. Most brokerages are always wanting new agents so I don't think you'll have a hard time. Although some may not want part time brokers, but that is fine! 

I couldn't be happier with my brokerage I work for. The owner was extremely accommodating and helpful when I was getting started.  

My only advice would be to be to think about your commission split with the brokerage. A lot of your big names with the big offices will take a LOT out of your commission, and if you are only having your license to help with your investing, I would look for a place that gave you a higher split so that when you do complete a deal, you get most of the money. 

Good luck on your adventure!