Minneapolis, MN · Member since 2016 · 17 posts · 4 votes
I want to ramp up my investing and I want to be as free of reliance on agents for finding properties and also for doing comps. What are the best resources for doing your own comps and for finding properties? I appreciate other's expertise but I really value independence and DIY. I value teams but I value being able to do as much on your own as possible, so that even if you delegate, it's because you're choosing to, not needing to. I own four properties but they were all traditionally financed. The three cash flow moderately and the fourth or I should say the first I house hack so it brings in cash. This I want to know
1. how to do comps and where's the best place to get the data as a non agent
2. Where's the best place to find listings as a non agent? Preforeclosures and non foreclosures. Is zillow or the mls any good? I don't have tons of time to market and don't feel like cold calling. I'm looking at my MNREIA assocation. Oh I should look at Craigslist!
3. Also how would you evaluate counties? WOuld people invest in a property or not as a landlord based on the county? I was told to not invest in Hennepin (Minneapolis) or Ramsey (St Paul) because of regulation and oversight and fees (before all this covid and riot stuff) but Dakota county is good (Apple Valley area) but I see a house that looks interesting in Ramsey. I think I just gotta do it. At what point would it be worth getting your real estate license and how big of a time and money investment is that?
Yeah the theme of this all is I just want to DIY as much as I can without waiting on others. Even if I use them I want to speak their language and have their understanding.
Real Estate Agent · St. Paul, MN · Member since 2017 · 580 posts · 396 votes
6y
@Account Closed - If you are looking at listed properties(Zillow, Redfin, Realtor.com), just use an agent. As a buyer your agent is free, and you want experienced representation. Obviously my opinion is biased, so take that into consideration, but why not accept the free representation?
If you enjoy REI and would like to pursue a career as an agent, absolutely get your license. You've already bought a few properties, which is more experience than many new agents have... Getting licensed for the sake of being able to buy your own properties might not be the smartest move. Having said that, I totally get the desire to be self-sufficient, and you want to be able perform due diligence without relying on others. You can find comps sold on Zillow and Redfin, learn to analyze properties, and learn to market to off-market sellers.
Forclosure.com and Auction.com are great for distressed/bank owned properties, but you'll still need representation for most of these to offer.
If you find a great off-market deal, it might make sense to leave the agents out of it. You'll still need a broker or attorney to facilitate the transaction, but this can be done for a discount compared to normal commission rates.
IMO the investors afraid of the new St. Paul/Minneapolis rules are overreacting, but I can understand why people are wary. Research the laws yourself, talk to local investors, and come up with your own educated opinion.
The good news: most good agents will do a lot of work for free, and help you understand their process.
Minneapolis, MN · Member since 2016 · 17 posts · 4 votes
6y
Thanks yeah I planned to use an agent to complete the transaction but love to be as independent as possible in the process- for convenience, speed, self-awareness. I don't mind relying on good people but I hate depending on people.
So I looked at a property today. They'd take contract for deed or cash from a loan. Rates are a steal. I'd have to put down 25% (or what we negotiate) for CFD so that would be money at risk. I realized if one does a CFD and pays 95% and then misses the last few payments and loses all equity, one is still ahead financially if the property cash flowed the whole time significantly. but when they ask to put a lot down or if it needs massive repairs or whatever- that you choose to undertake (Because CFD you can always walk away, right?) then you have skin in the game.
This property looks really good. They're pro investors. The Two tenant families in the 1800s 2-story duplex seem 'seasoned' and I'd get them. Combined it brings in about 2300/mo and asking price of property is only 185k. This seems too good- I could cash flow over 1k/mo when all is said and done? Why would I not? Tell me, why would I not, if I can get financing? I want to make them an offer but I want to do so intelligently. I believe in fairness and non deception but also intelligence and I'm learning this.
So in making ht offer, which I want to do tonight-- offers do not usually involve a form right? That's more purchase agreement? for forms I was going to use Bill Vaughn's forms that I got, from hsi program. They include the clauses that protect me. I can make a purchase agreement with clauses like "subject to attaining suitable financing" and "subject to inspection" (roof, foundation and everything are solid). So of course I would want this property right? So do I use my agent (my seasoned investor cousin) to make the offer, or can I DIY? I want to DIY if I can here but for closing and all I could use him. He's against this property but that's not why I want to avoid him. I just want to man up and go for it and grow.
Ok tons of questions. Also my financial situation- I have a 2.75% 15 year mortgage on my home property, PI is about 1200ish. I can refi at about the same rate (I'm told) for 30 years. That would lower my monthly pmt between $7-800 which is huge not just for freeing up cash but also lowering debt to income ratio. I can still pay down as fast as before if I choose to. Why wouldn't I? I got laid off though and am just finishing coding bootcamp about to start searching for work. At this second I don't have non rental income to qualify for anything. My dad is well off but doesn't want to lend and I don't want to be lent to so he can guarantee, get his name on property as owner non occupant and he won't even charge me the 100/mo I offered. He has nothing to lose. The lender is down for this and when I get a job they can take him off and quit claim him. This starts the ball rolling for this wave of investing. Of course I'd want to do something similar on separate properties if I could, if my dad and the lender are down but good to start with my home right now I guess. Things are quickening and I love it. I love action. All the stuff I mentioned literally manifest today. See I understand the bank's requirements and POV (I have been a CPA) but in my view I "should like" to be lent on every property, if I get 20% down from my equity or whatever, regardless of my income level because the property will cash flow, but banks and lenders don't think like that, even though it's logical. So if I can get my dad to guarantee or just wait till I get income, even relatively low, I think I'm good. Or maybe do mortgage insurance. Didn't ask him about that. But I want to keep getting lent to on quality properties that will cash flow as long as I have the down payment. If they don't do this I can see about my dad guaranteeing. He might not on other properties but I can start with my home. That refi will help as UI peters out.
So I want to make these guys I saw today an offer. I think the 185 price is fair and workable. I just want the right "subject-to" clauses. I think but don't know that on the offer, it is more informal until you get it in writing. Subject to me getting financing. I could do the contract for deed today on my own without any third party help (I have a 40k heloc and my equity has increased significantly) but that's putting major skin in the game. I like the investor teachers that say you can't lose anything if you don't write any checks. Aren't they smart? So subject-tos I want are subject to finding financing and the house not having serious structural needs, and title being clear. I'm just talking about the offer and the beginning of negotation, not the actual written purchase agreement which will be more detailed. I'm careful to protect myself. I usually succeed in things which means I'm too careful and not doing enough. "Deliberative" was one of my Clifton strengths. He has another offer they're in negotiation with. He's expecting word from me tonight- so healthy pressure. So any timely response here is appreciated! Why they are selling: "He's the adult son of a real estate investor- so second gen, and they want to free up money for other deals. They're not wholesalers. I don't know why they don't keep it. Maybe they have better deals. I'd take 1k+/mo, if I'm not missing anything, less even 200-300/mo reserve for repairs. It's also right by metropolitan university. Even at 45k down (25%) it's a great cash on cash return--- just kinda need that 45 to be more protected than would be in CFD, so maybe say subject to financing I'd give them 190.
Listening and learning from Bill Vaughn- the theory is great.. now the implementation is greater and more interesting
