Is it me or is my realtor right?

Investor · Member since 2022 · 3k+ posts · 3k+ votes

2y

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

You're on a REI board, with real estate agents so take this for what it is. But as an investor--I notice the same nonsense. At the end of the day, you're an investor and you need to have direction where you are going and then conviction. I invest in a lot of cities, so I'm not speaking with just a single experience; these agents are pushy, don't care about your best interest, they just don't want to spend too much time and not see a deal get done. They are on free time, so unless something gets done their patience wanes. 99% of agents are absolute, and utter trash. Even, heck especially, the one's on here.

If that investment doesn't suit it-- it doesn't suit it. Now could it? Maybe, with different terms and that's up to you if you want to make that extra risk associated with it and how much you feel the other side needs to, too. So you could always "make a market". If that's not your thing though, don't listen to someone else telling you what to do.

My advice is tell this to realtor to get over your dad, and you are over them. Find a new real estate agent and understand the angle they come with-- and be prepared to stand firm. Or hire a lawyer to help watch you as you search the MLS yourself and talk to the listing agent directly. I've done both, the latter has proved a ton more successful. The legal fee is nominal given I could get house prices for significantly less when we negotiated the listing agent's commission on houses. You'd be surprised how much they are willing to give in and how much sellers will lower asking with those concessions.

2 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

2y

Bruh, if youre trying to compare multifamily homes in Chicago, which are 100-300 year old homes to new construction....then you really do have to re-adjust your expectations. Mulitfamily properties are going to be old, beat up, need updating, have things that need to be brought up to code, etc.

Whether its a bad time to buy.......It's always a bad time to buy. Rates are too high, so borrowing costs are high. Rates are too low forcing more buyers into the market making more competition. Economic outlook is too good, so people over pay. Economic outlook is too bad, so I better not buy now cause the markets going to crash.

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5 Reply

Laura NA

OP

Member since 2024 · 6 posts · 3 votes

2y

Quote from @V.G Jason:

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

You're on a REI board, with real estate agents so take this for what it is. But as an investor--I notice the same nonsense. At the end of the day, you're an investor and you need to have direction where you are going and then conviction. I invest in a lot of cities, so I'm not speaking with just a single experience; these agents are pushy, don't care about your best interest, they just don't want to spend too much time and not see a deal get done. They are on free time, so unless something gets done their patience wanes. 99% of agents are absolute, and utter trash. Even, heck especially, the one's on here.

If that investment doesn't suit it-- it doesn't suit it. Now could it? Maybe, with different terms and that's up to you if you want to make that extra risk associated with it and how much you feel the other side needs to, too. So you could always "make a market". If that's not your thing though, don't listen to someone else telling you what to do.

My advice is tell this to realtor to get over your dad, and you are over them. Find a new real estate agent and understand the angle they come with-- and be prepared to stand firm. Or hire a lawyer to help watch you as you search the MLS yourself and talk to the listing agent directly. I've done both, the latter has proved a ton more successful. The legal fee is nominal given I could get house prices for significantly less when we negotiated the listing agent's commission on houses. You'd be surprised how much they are willing to give in and how much sellers will lower asking with those concessions.

I appreciate your response and I couldn't agree more with your comment that "99% of real estate agents are trash." I have been working on getting a license so I can get access to the MLS myself. Are their any other ways to do it without a license? Currently, when I see something and contact the listing agents myself I get the s******* responses from the listing agents.

1 Reply

V.G JasonPro Member

Investor · Member since 2022 · 3k+ posts · 3k+ votes

2y

Quote from @Laura NA:

Quote from @V.G Jason:

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

You're on a REI board, with real estate agents so take this for what it is. But as an investor--I notice the same nonsense. At the end of the day, you're an investor and you need to have direction where you are going and then conviction. I invest in a lot of cities, so I'm not speaking with just a single experience; these agents are pushy, don't care about your best interest, they just don't want to spend too much time and not see a deal get done. They are on free time, so unless something gets done their patience wanes. 99% of agents are absolute, and utter trash. Even, heck especially, the one's on here.

If that investment doesn't suit it-- it doesn't suit it. Now could it? Maybe, with different terms and that's up to you if you want to make that extra risk associated with it and how much you feel the other side needs to, too. So you could always "make a market". If that's not your thing though, don't listen to someone else telling you what to do.

My advice is tell this to realtor to get over your dad, and you are over them. Find a new real estate agent and understand the angle they come with-- and be prepared to stand firm. Or hire a lawyer to help watch you as you search the MLS yourself and talk to the listing agent directly. I've done both, the latter has proved a ton more successful. The legal fee is nominal given I could get house prices for significantly less when we negotiated the listing agent's commission on houses. You'd be surprised how much they are willing to give in and how much sellers will lower asking with those concessions.

I appreciate your response and I couldn't agree more with your comment that "99% of real estate agents are trash." I have been working on getting a license so I can get access to the MLS myself. Are their any other ways to do it without a license? Currently, when I see something and contact the listing agents myself I get the s******* responses from the listing agents.

I would ask them to check out the house physically, if you get there then make a firm offer you're comfortable with it. Draft it up with legal help the submit, and see what shakes. If you don't get to view it or the listing agent is being a PIA, go higher up at the brokerage he or she at, and ask to see it. If anyone is getting cute in today's low liquidity and transactional volume times, then they need to be set straight. I've had some listing agents push me away as if I'm just wasting their times, so I talked to their boss. Real quick they tighten up and now welcome my team & I, or my rep, in.

0 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

2y

Most places will not be perfect. It is a matter of knowing what can be fixed and how much it will cost. If you find a building that is outdated, it will be priced accordingly and is a great opportunity to updated it and add value-when updating though keep in mind you are not living in it and not to go over the top. Be realistic when you are looking- if you are looking at price points below average, you are going to find places that are below average.

If you don't like the current market (interest rates and prices), then don't buy. You need to find the place that is right for you, but from a realtor's perspective ask yourself honestly if you are wasting their time or are you serious about buying? Have they shown you a couple of places or dozens of places over a short period of time? Are they showing you places that match what you've asked them to show you?

2 Reply

Laura NA

OP

Member since 2024 · 6 posts · 3 votes

2y

Quote from @V.G Jason:

Quote from @Laura NA:

Quote from @V.G Jason:

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

You're on a REI board, with real estate agents so take this for what it is. But as an investor--I notice the same nonsense. At the end of the day, you're an investor and you need to have direction where you are going and then conviction. I invest in a lot of cities, so I'm not speaking with just a single experience; these agents are pushy, don't care about your best interest, they just don't want to spend too much time and not see a deal get done. They are on free time, so unless something gets done their patience wanes. 99% of agents are absolute, and utter trash. Even, heck especially, the one's on here.

If that investment doesn't suit it-- it doesn't suit it. Now could it? Maybe, with different terms and that's up to you if you want to make that extra risk associated with it and how much you feel the other side needs to, too. So you could always "make a market". If that's not your thing though, don't listen to someone else telling you what to do.

My advice is tell this to realtor to get over your dad, and you are over them. Find a new real estate agent and understand the angle they come with-- and be prepared to stand firm. Or hire a lawyer to help watch you as you search the MLS yourself and talk to the listing agent directly. I've done both, the latter has proved a ton more successful. The legal fee is nominal given I could get house prices for significantly less when we negotiated the listing agent's commission on houses. You'd be surprised how much they are willing to give in and how much sellers will lower asking with those concessions.

I appreciate your response and I couldn't agree more with your comment that "99% of real estate agents are trash." I have been working on getting a license so I can get access to the MLS myself. Are their any other ways to do it without a license? Currently, when I see something and contact the listing agents myself I get the s******* responses from the listing agents.

I would ask them to check out the house physically, if you get there then make a firm offer you're comfortable with it. Draft it up with legal help the submit, and see what shakes. If you don't get to view it or the listing agent is being a PIA, go higher up at the brokerage he or she at, and ask to see it. If anyone is getting cute in today's low liquidity and transactional volume times, then they need to be set straight. I've had some listing agents push me away as if I'm just wasting their times, so I talked to their boss. Real quick they tighten up and now welcome my team & I, or my rep, in.

I will definitely try this, and I usually escalate with anything else if needed to but never thought to do it for realtors as well after they insist having my agent call them to see the property. I appreciate your honesty and advice because it's let me know I am going in the right direction.

0 Reply

Laura NA

OP

Member since 2024 · 6 posts · 3 votes

2y

Quote from @Theresa Harris:

Most places will not be perfect. It is a matter of knowing what can be fixed and how much it will cost. If you find a building that is outdated, it will be priced accordingly and is a great opportunity to updated it and add value-when updating though keep in mind you are not living in it and not to go over the top. Be realistic when you are looking- if you are looking at price points below average, you are going to find places that are below average.

If you don't like the current market (interest rates and prices), then don't buy. You need to find the place that is right for you, but from a realtor's perspective ask yourself honestly if you are wasting their time or are you serious about buying? Have they shown you a couple of places or dozens of places over a short period of time? Are they showing you places that match what you've asked them to show you?

Thanks for your response. I agree maybe it's just the market because a three unit that costs $600,000 in just an ok area should not need another $50,000 to bring it up to code. Also, I totally get realtors work for free until a sale, but the way this guy is pushing just makes me wanna gravitate away. I also tried to always attend as many open houses as possible to not waste his time and went as far as contacting the listing agent myself before him for properties I am interested in.

0 Reply

Patricia Steiner

Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes

2y

A question for you: on what criteria did you select your realtor? A general residential realtor is not qualified to assist investors in the type of analysis that is needed to gauge ROI or even in determining the scope of work/costs to update a property. Did you and the realtor discuss your buying objectives before viewing properties? Did you review the property condition reports beforehand? Often times I find that it is the buyer who made the wrong choice in selecting the realtor in the first place - and it belabors the process for all parties and makes the buyer appear to be amateurish
at best. Having said that, the worst part of what I do as an investor and Broker is dealing with unqualified realtors. It's the same in any profession and it places the burden squarely on you as a buyer to vet resources.

Best...

0 Reply

David M.

Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes

2y

@Laura NA

How long you been at this? A few months? For example, it took me 2 years to find my real estate agent.

You've viewed all of 5 properties in person? Not sure how far apart are they, but that's not even a day's viewings...

Keep going.. Keep learning.. Find the neighborhood / property that suits you..

Even around here, multi's tend to be pretty crappy. Lots of "slumlords," or just landlords who can't afford to fix things up. Saw listings where you could just walk between units because the sheetrock/"fireproofing" wasn't there.

Yup, agents are in the sales business. You could get your own license, but don't forget the carrying costs and finding a broker will to take you as effectively a non-productive agent. Remember, brokers make their money off the backs of agents. So, if you aren't producing then you are costing them money being on their books normally.

As mentioned, plenty of agents, and other vendors, on BP are pretty bad, too... Its too bad newbies see this site as a way to find "good vendors" when all it is is free advertising for them. You know what they say: its tough to find good help.

Letss see, whether all properties will have non-cosmetic issues really will depend on your neighborhood / location. Or, look at it the other way: if you were flipping or brrr'ing, it'd better have some issues.

Hope this helps. Happy to chat. Good luck.

1 Reply

Laura NA

OP

Member since 2024 · 6 posts · 3 votes

2y

Hey thanks for your reply. I have been wanting a 2nd property for many years but I didnt feel financially comfortable with the idea of buying a 2nd one until now which is my early 30s! I did view five properties with the agent over 6 months that I thought I absolutely would buy but when I viewed them I found issues that I thought to costly to repair. I think it takes time and I need to find an agent who will be patient and understand that. I agree their are high costs with having the license just for personal purposes.

1 Reply

Laura NA

OP

Member since 2024 · 6 posts · 3 votes

2y

That is very true and I got him from my father on the recommendation that he is good. I was not gonna move on to a new realtor because he did show me a couple properties and use his time but I don't like the feeling of being pushed and based on the answers I'm getting here it's the right thing to do.

0 Reply

Jack Seiden

Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes

2y

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

you are kind of dealing with three diffrent issues here, the thing about not being a legal three unit, super easy don't buy something that's not legal, and your agent really shouldn't be encouring you to break the law, the issues with properties being beat up, the vast majority of multi unit's that sell have some wear & tear that's often the reason for selling, being a tired landlord, if you want turn key, you are proably looking more single family homes or paying big dollars for a turn key multi if it even exists in your market, 3rd we can debate the pro's or con's of this this market but youve hired and agent and 99% of agents are going to tell you its a great time to buy, i'm usually more measured but that's because I have a deep psychological problem in which I care more about being intellectually honest than making money, most agent's however are not afflicted with this disease so your gonna have to make this decision for yourself before you hire any agent. Tldr all agents suck but this agent sucks a little more than most because he's encouraging you to buy an illegal multi family

1 Reply

Allan C.

Rental Property Investor · Member since 2018 · 826 posts · 810 votes

2y

@Laura Lo if you’d like, I can refer you to my agent in Chicago. I live out of state, so this agent tours properties for me and takes videos and pictures of whatever I want - she also visits as many properties on my behalf as I want (within reason). She is not pushy with anything but she is honest if I’m off-base.

She also manages one of the more prominent brokerages there. I buy multi-families, so I know she is versed in this space as well.

I operate in multiple markets and my agents show nothing but respect. If yours isn’t doing that for you, they are not worth another minute of your time. Just PM if you’d like the connection.

0 Reply

Brie SchmidtBusiness Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

2y

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

I have been an investor agent for 10+ years in Chicago. Feel free to send me a couple of addresses that you looked at and I will give you my thoughts and tell you if you are being picky.

You are right about the meters and setup, it is unlikely a 3 unit based on what you told us.

It is going to be a trade off, if you want something recently renovated you will take a lower cap rate, something that is in good condition with a few minor updates you will get an average cap rate, something with deferred maintenance you need to see a higher cap rate. Some clients only want the value add stuff with a higher return and some want move in ready with a lower return but the ability to preserve their capital for a down payment on the next one. There is no right or wrong answer, just depends on your strategy

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2 Reply

John Warren

Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes

2y

@Laura NA there are plenty of bad agents in the world. If your agent is angry with you, or if you don't see eye to eye with them, move on. There are tons of EXCELLENT agents out there. The issue with the metering and utilities is something we look for day one. I always underwrite utilities to the best of my knowledge long before a client looks at a building. With google street view and some sleuthing on the MLS, you can normally figure this stuff out.

As for your experience contacting agents directly, the market is red, red-hot right now. We just listed a home in Berwyn and we had 10 offers with more coming in. Many listing agents do not enjoy working with investors who call them directly since investors.... want to undercut the market! They may not be authorized to do dual agency, or they may not feel it is in the best interest of their seller client if a listing is hot since dual agency can get messy.

0 Reply

Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

2y

Hey @Laura NA - It's probably both you and your realtor, but if you are even asking the question about your realtor that means it's probably time for a new realtor.

I think the most important you can do that will this situation is come up with a crystal CLEAR buy box for your property. What area, what condition, what price point, what size, etc. etc. etc.

EVERY building will have issues...as the investor you to decide your level of risk and how much work you want to do...there is no longer tons of deals that cash flow well...times are different.

Being able to pull the trigger once the numbers make sense is a skill and being indecisive will be a big hindrance on growing...I personally won't work with clients that are gun shy on pulling the trigger. You have to write more offers then ever now to get a deal...

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Crystal SmithPro Member

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Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes

2y

Quote from @Laura NA:

Hello everyone,

I am new to this forum and I have been watching it for a few months now waiting for the right time to post. I will try to keep this short and I appreciate any and all info given. I have been looking to purchase a second property as an investment for about one year now and it wasn't until last year that I began actually touring multiunits in Chicago and in the Chicagoland suburbs. I got my realtor from my father who was big into real estate investing over 30 years ago and did very well until some big life's problems came his way which forced him to sell all his buildings. I have probably viewed about five or six properties in person and look at realty sites at least twice a day. I just viewed what looked to be a beautiful 3 unit in the photos a few days ago, but when I got there it was apparent the building had a natural gas smell in the basement, plus the owner pays all heat for the building since there is only one furnace. Also an electrical meter was missing on the outside and I just saw two leading me to believe the building wasn't even a legal three-unit so for the high price my dad and me agreed to pass on this one as well.

A few days later I got a rather angry call from my realtor asking me why I keep passing on good buildings and what's going on? He said your dad comes from a different age where things were maintained differently and that I need to make a move if I want something. Now I know realtors are salesmen and middlemen and I am not a huge fan of them in general but I can't help but wonder if he is right about this. He said every building is going to have some problems with it, but I guess I keep comparing it my first home which I got really lucky with as it was new construction and I didn't even use a realtor to buy it. Does everyone think this is true, are all buildings going to have issues with them, and I am not referring to cosmetic ones? I also think many buildings I view are super outdated and I view the landlords as just milking the buildings and not putting money back into them so I view it as buying someone's else problem. I also think the current climate to buy is bad and has been for a while now with no end in sight. I am eager to buy to here everyone's thoughts as to whether I am too picky or is the realtor wrong and just trying to make his money quick?

It seems to me that you're looking for a building where you will have zero risk since you are comparing the buildings you've reviewed thus far to new construction. If you look at buildings as a real estate investor, every building (including new construction) is going to have problems. What's required of you from a business perspective is to assess the cost of correcting the problems versus the cash that the building will bring in. If your risk tolerance is low then maybe only you should only consider buildings built after 1978. (That's a relatively new build for Chicago). Or if you qualify, maybe consider purchasing land and building your own multifamily. You can also consider finding a vacant building and using a construction loan to renovate it like new.

Regarding the comment that the current climate to buy is bad- I"'ve been on this forum for some years- And each year someone says the climate to buy is bad. And while they are saying that investors are buying. Why? It's more about the employment of different strategies and being patient.

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Linda S.

Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes

2y

@Laura NA,

Asking for a legal 3 or 4-family with separate meters is perfectly normal. Personally, I would immediately fire your real estate agent if they are yelling at you. My saying, is "I don't pay for problems" and if a person is stress in my life, I get rid of them. It's weird having your dad know them, IMO I'd absolutely find someone unbias and only focused on your direct investment interests.

That being said, new construction vs. 100-300 year old buildings, are you kidding me? EVERYTHING -- has a lifespan, nothing is suppose to last forever! Will you have more problems with older buildings-- yes, it's just the nature of the beast. As an example, you can have a brand new HVAC, but if your insulation is 100+ years old, it's going to be an uphill battle. There are slumlords that do the cheapest options, and I say--look for the ones that do bandaids vs. fixing a problem, and be willing to pay more for a well maintained one as that seller knows the value of a well maintained home will prevent a lot of the problems!

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Jack Matthias

Lender · Chicago · Member since 2023 · 176 posts · 70 votes

2y

At the end of the day your the one buying it and it will be your threshold to what is acceptable or not. Eventually something may pop up that checks all your boxes but with inventory being low it's hard to say when that may happen. As far as your realtor, they are on things because you have to act fast in this market otherwise you will miss out. I'm local to the Chicago market and it is crazy right now. So it's truly up to you how soon you want a building and if your willing to take a building that doesn't check all the boxes.

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David M.

Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes

2y

@Mike K. normally in residential real estate, the listing agent doesn't do the showings. The buyer's agent does the showing. In commercial, its usually the other way around.

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Sarita ScherpereelBusiness Member

Real Estate Agent · Chicago, IL · Member since 2018 · 659 posts · 376 votes

2y

You've gotten a lot of good advice here, and I would just add that it is not about who is right and who is wrong. It's about making sure that you are working with an agent whose guidance you trust. Your post makes it clear that it's time for you to find someone who better understands your goals.

As everyone else has said, old buildings are not going to compare to new construction, for better and for worse. Figure out your threshold for projects, because every building will have its own issues to manage. With the low inventory, properties that need work are often still going for a premium, but it is your money and you should take on these issues with your eyes open. Paying attention to the utilities usually tracks with the legality of units, so trust your instincts there. Good luck with your search @Laura NA

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Dave Hagen

Chicago Area, IL · Member since 2024 · 54 posts · 49 votes

2y

Having lived in Chicago for many years, I've rented a couple of these fake 3 units. Many are 2 flats with a basement that was renovated to include an "In-Law" apartment. Or an attic that was turned into another apartment. In-Law apartments are special use that are suppose to be used for people on the first floor who need more room, or have Mom/Dad or Grandma/Grandpa living with them. It is not a full legal separate apartment because there is only the back door to the outside, and maybe an inside stairs to the first floor. I rented the 2nd floor, and then the 1st floor in another building. Both times I found that the basement electricity was on my meter. In-Law status can be remedied by building a second entrance. But be careful, as these can let water in when there are heavy rains. And the property assessment would need to be changed, and of course, taxes increased, as well as separate utilities. You can see how some would want to avoid that.

Older buildings can also have problems like hidden electrical that has never been upgraded. A good inspection might find old wiring coming into a newish breaker panel. Old paint can contain lead, as well as water pipes. All these can be used to ask for a lower price, or other credits.

No building is perfect, and depending on where you are renting, you can't expect top rents for a great building in an area with average rents. If it is a safety concern, it should get fixed. The gas company should help you find a gas leak. If it just doesn't look nice, will it stop most of your applicants from wanting to rent?

Rentals in a more expensive area will appreciate more than in a cheaper area. And a more expensive area will also give you more options, for short term rentals, while locations may give other options, students renting for college.

Figure out what you want to do, and where you want to focus your attention. Having several similar rentals close to each other will simplify managing them.

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Is it me or is my realtor right?

Is it me or is my realtor right?

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