Agent claims she can generate certain CAP rate but short on specifics...until

[Will M.]

Hello,

I'm looking to get into my first investment and have started working with an agent that was recommended by a friend (non-investor.)

This agent claims she has helped investors purchase properties here in Las Vegas with a decent cap rate and assures me she can find a property at market value that can generate cash flow of $100-$200 per month. 

I've been running numbers (from zillow) for my area for a couple months and the only thing I even see coming close to generating ANY positive cash flow are foreclosures - nothing at market value comes close.

Said agent recommended me to her lender friend and said that once I get pre-qualified, we can start looking.

My issue is this, I don't want to spend time getting pre-qualified if this agent can't produce the numbers she claims. I told her the numbers don't add up on my end and she told me to get pre-qualified first and and we'll dig in. Should I just come right out and ask her what types of properties she's thinking about or where she's getting her numbers from or what? I guess I'm a little concerned as I've seen nothing generating a profit at this point yet she claims that it won't be a problem to find a property that cash flows.

Any tips on how to proceed would be very helpful.

Thanks

[Martin Scherer]

@Will M.

If you don't know what getting pre qualified is or the value of it you are very new.  If you are believing anything Zillow says about value you are very new.  So why get upset when someone calls you on it?  There is nothing wrong with being a newbie.

Many, read most, any agent will insist you get a preapproval letter before they show you property.  You might think you can afford a 600,000 house and you really can't afford a mobile home so why should an agent spend time with you showing you homes?  They are paid commission and as such don't wish to spend their time with someone without two nickels to rub together.  I wouldn't waste my time with someone who won't even speak to a lender first.

The first question you should always ask any agent new to you  is "do you have investment property yourself".  If they don't find someone who does.  They will know what you want and won't waste your time.  Most agents don't know the difference between an investor and the guy who just spent a weekend with a guru and thinks he knows something.

If you are looking for SFR why are you even talking cap rates? If you are looking for are multi families you don't want a residential agent anyway and likely they won't know how to calculate cap rate or know how they are used.

Instead of getting upset realize that claiming to be an investor doesn't make it so.  Attitude here won't get you far.