Buying a 10-20k house from out of state - How to find an agent?

Question

I'm looking in the Detroit area at homes that are on the market for 10-20k to buy, rehab and rent. I'll be flying up to select a team of contractor and property manager to be ready after I close on the first house.

My problem is this: It's not worth the commission to act as a buyer's agent for a 10-20k purchase.

So my question is: Has anyone had any luck with hiring a real estate agent by the hour, or paying a flat fee to find a property?

Also open to other ideas about how to find a home, or have an initial set of eyes on it, such as services like https://wegolook.com/.

One thing that I really want some help with is drawing up the contract properly when I actually do find a house that I would like to buy.

Matt R. · Answer

Take a gander at the Shea Show on youtube. He does these all day in D. I have seen him pick up triplexes for 3k and almost all of the ones he gets are all from failed landlords. It is a street by street local game sometimes. Tons of opportunities but I have seen many he checked out for others that were total losses from day one.

Jake Thomas · Answer

@Hurricane Hamilton I would suggest just using the listing agent to make the offer at that point. Don't have them show you around then use someone else. It gives them more incentive as well to get you a better price on the property and makes the transaction smoother. I wouldn't normally suggest this on any other type of RE transaction for Realtors but in this case that would make the most sense for you and the other party.

Lara Krakowiecki · Answer

Hi @Hurricane Hamilton

I would suggest joining the Metro Detroit Real Estate Group Facebook page. It is a very active group. When you find a property ask about contractors/ property managers in that group!

Daren H. · Answer

Even if you know the area and have some potential feet on the ground, do you really understand managing tenants/owning property in this class? I say this because I have to assume these are not $10K - $20K properties with an after repair value of ~$100K. A $10K- $20K property is a different animal in Texas and I can only imagine it is a different animal in Detroit as well.

My suggestion would be to make connections with experienced investors right here on BP that are in Detroit and maybe they can give you advice. My concern with using the family and friends is if they are not experienced investors they may lead you down the wrong path (not intentionally, but because they don't know.).

Alvin Neal · Answer

@Hurricane Hamilton On properties that are that low in price it would be best to negotiate a per property transaction.I know those areas very well and it depends on the actual street and block that your on in some neighborhoods. I think you need to move your pricepoint higher and choose better properties in areas that don't require alot of rehabbing.

Account Closed · Answer

@Hurricane Hamilton You are buying a home for $10,000? Does it have a roof or that's just the price range in the market where you are buying?

Hurricane Hamilton · Answer

@Matt R. Good suggestion - I enjoyed the episode that I chose at random

@Mike Fletcher I've got a price ceiling of 20k

Hurricane Hamilton · Answer

@Mark Gallagher Thanks for the thoughts. Would you suggest a flat per house fee, or an hourly rate?

@Jake Thomas Thats a good idea. My question is then: How can I write an offer contract? I'm not a lawyer nor a Realtor, and I wouldn't want to get stuck with a bad contract. Would you advise asking the listing agent to draw up the contract, and then just read it over?

@Al Neal Yeah, most of the cost to getting the property rental ready probably will be in the rehabbing step for a house in the 10-20k range. What sort of minimum price point would you set?

@Tim Reavis Thanks for the idea!

@Lesley Resnick Yeah, if I could purchase enough of them, that would be a good way to make it worth an agent's time. However, I want to start with one and see how it goes. I don't want to promise anything that I can't deliver! Thanks for the upside wishes

@Matt R. Yeah, it sure would be easier if I were local. Unfortunately my day job precludes this!

Matt R. · Answer

There could be some deals but most agents will not be into 10 to 20k houses for a host of reasons. I have seen $50k to 200k+ for sale properties on streets in the midwest where over 50% of the homes are vacant/abandon. This sub 20k price point is almost exclusively a locals only thing. OTH I have seen Detroit locals pick those up for under 10k and maybe be all in 25k for $900 + rents. For an outsider to do this is a very risky bet. Just take a look at all the other failed landlords on that same street.

Buying a 10-20k house from out of state - How to find an agent?

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