Untrustworthy real estate agent?

Question

I've been working with a real estate agent who has a good reputation for a few weeks.

So far we lost two offers & I always send her the property address for her analysis before I/we go check it out. She has been honest so far with red flag properties but recently she gave me a green light on a property that was on a busy street with no driveway & only parking on one side of the street. She said it was ''ideal''

I replied back confused asking her if the busy street & no driveway would affect appreciation & resale value & she completely changed her tune, saying ''Not likely to impact appreciation – it will go up the same as the rest of the neighborhood – but it will always be worth less than if it weren’t on a busy street. The combo of the busy street AND no off-street parking would make me pause unless it’s your dream house. Those are two pretty big flaws.''

I feel she is now more focused on her commission than helping me avoid undesirable properties, thoughts?

Account Closed · Answer

Anxiety is the biggest killer for earning maximum profits. Don't be so anxious to spend, lose, waste your money, or purchase the first property that will give you just okay returns. Losing out on making offers in this market is probably the best thing that happened to you.

You can learn thousands of so-called tricks or whatever you call them to invest in real estate or the stock market. The problem with people is they ignore the simplest and most-basic rules that require zero thinking and produce the most-profitable results. These are my personal rule, in addition to thousands of others, but these are the most critical.

1) Neve ever rely on advice from brokers, friends, attorneys, advisors, management companies, or anyone other than yourself. If you have to ask someone whether or not a deal is good then you need to stay out of the business. Don't invest one penny until you know so much about the business you can tell others what to do vs. having to ask.

2) Anxiety is the number one cause for making the wrong investment decisions. Don't ever be worried about losing on a deal because when you let deals slide past you then you always find another deal that many times the deals will be much better than those you lost. Investing is not about owning properties. The goal is to make the best short-term and/or long term investments.

3) When looking for properties you have to look for properties where you can double your investment money every 1 to 2 years, or make $50% to 100% on your money every year. You cannot do this if this goal is not built into your property searches. How? Suppose, you have $50,000 to invest. You want to look for properties that are already, or will be worth $50,00 more than you pay for them, hopefully the day you close escrow, or within 1 year after the property appreciated, after you increase rents, make a few repairs, or whatever.

4) Look at hundreds or thousands of properties and crunch the numbers 20 or more times for every property you have an interest in. If you have to ask for help with math that is so simple you need to put your money into something more idiot-proof like CD's and stay away from real estate.

I don't know much about Warren Buffet and don't care to make statements I am not sure about, but a few days ago I read that Warren Buffet and a few other big players in the stock market have more of their money on the sidelines for very extensive period of time. Almost all other investors do exactly the opposite when investing in both real estate and stocks.

The money for real estate and the stock markets is made before you enter into a contract or make a purchase because it is before you consummate the deal when you have waited enough time, spent enough time doing the math and when you consummate the deal is not the time you cross your fingers and pray for good luck. Before you consummate a deal you have to know (not any advisors, broker, or friends) and be 100% positive that you made the choice that will give you the best return on your money and you have to be 100% positive that your investment will pan out and do what it is supposed to do.

Otherwise, just send your hard-earned cash to any clown and let them make quick and ignorant decisions for you.

I just got a line of credit for $2 million and have another million in my investment account. The money could sit in my accounts for many years because I will only buy a property when I can earn 50% to100% on my money within 1 to 2 years and in today's market that is difficult to do. But I would rather wait for several years if that is how long it takes to find the perfect property.

There is an old saying that says, "Never believe what you hear and believe only 2% of what you actually see".

That means that you should not believe one thing that I tell you and don't believe one thing you read on BP, or don't believe one word your broker tells you. Then, when you actually see something like someone shows you a picture of a property they purchased you need to assume that 98% of those claims are untruthful because maybe that person did not actually by the property, or there could be a web of lies surrounding the purchase of the property. This may sound like insane advice, but there is a huge difference between believing everything you hear and the real truth, or the entire story that makes the claims not only partially false, but actually dangerous when using these liars methods.

We make millions of dollars by investing in real estate. We also make millions of dollars investing in the stock market and we do almost zero technical or fundamental analysis. Sure, I spent thousands of dollars getting an education for trading stocks, purchased every book I could find, wrote a book myself, developed a sophisticate software for analysis and spend $30,000+ going to classes taught by so-called experts who are only liars and they don't have a clue regarding how to invest wisely and safely. In 2000, I lost $1 million in one day when our great government made Microsoft split (whatever that means).

Investing in real estate and the stock market wisely is similar. We hold onto our cash for several years until we find the sure-thing and discounts we wrote into our business model. For the stock market, we hold onto our money until the S & P 500 Index drops due to a major crisis day e.g. on 9/11, between 2008 and 2010 and on February 24, 2020 that was a result of COVID. It is too simple to make money during those periods. There is zero need for using your brain. Example. Coca Cola (KO) decreased from $60 to $30 within a few days. I am not going to do the exact math, but if you put $100k into Coke during that period you could keep your money there for a long time and sleep every night because Coke and almost every other stock rebounded within a few days and as of today you would have about $190,000, or 90% return on your money in less than 1 years. It is even simpler than that. Rather than looking for a company like Coke all you need to do is put your money into an index fund like SPY, but just like doing the math for real estate we always crunch numbers for SPY and several other safe companies because we often earn 500% on our money in less than one years.

If you want to invest your money is the best and safest investments you need to put your anxiety aside and give yourself the mindset that you will never invest if you can't get the return you write into your business model, whether actually written, or just inside your head.

Linda S. · Answer

@Lara Nicole,

We have a house on a main/busy road, and I think the appraiser took off like $5-10K from the price to adjust for it being a non-desirable feature.    No parking would be a big issue for anyone living there, however if you have land-- you can make parking.   If everything else makes sense, create/add a driveway in the front or back yard!

Jonathan Greene · Answer

This post makes no sense. The agent didn't completely change her tune. She gave you all of the relevant information and advised you of the risks. It's probably ideal because the price is lower so it will appreciate with the neighborhood, but as she said, at a lesser value. I don't even understand what the complaint is. The agent sounds great and totally looking out for your best interests by giving you all of the information from different angles.

David M. · Answer

@Lara Nicole

I agree wtih the above.  Before one writes off this agent that you've found to be "good" so far, what are you looking for?  THe agent said its "ideal," ideal for what?  For you to live in?  For you to rent out?  As just mentioned, you need to differentiate between what YOU want for a living condition vs. what the market wants.  Good luck.

Account Closed · Answer

I don't listen to real estate agents nor anyone else when it comes to the value of a property. I sold my personal residence about 30 years ago to use the money to invest into multi-units and I moved into my commercial building where I still live today.

The property I sold was a house on a commercial street. It was zoned both for commercial and residential use. When I purchased the home it was a fairly large hair dressing and nail shop. Three brokers told me the property was worth about $450k. I told my broker I wanted $650k and he said it would not happen, but he listed it, anyway. The first buyer who looked at the house paid the $650k and he paid cash with no loan.

If you don't ask for more money, you will never get it.

For the home in this thread, the parking situation, noise and busy street is probably nowhere as critical as crunching the number and looking at other alternatives. If the numbers are great then the parking and busy street become less to worry about.

I still have a home on a busy 4-lane street just as busy as a highway. The property is a c+ grade and on a quieter street it is probably worth $650k to $750k, but almost every week developers are offering me $1 million for the property because they want to demolish the house and they say they can build 9 homes on the lot.

My point! We don't have enough information to determine whether or not the property in this thread is a good or bad deal.

Incidentally! I've been taking a massive amount of pain pills and they are affecting my brain. So, I when I mentioned that we made 100% on our money by investing in the SPY Index as of March 2020, we also made 500% on our Taco Bell purchase we made during that same period. That simple ability to do your own math to earn 500% vs. 100% whether it is real estate or stocks is the reason people need to avoid relying on other people for advice.

Linda Wright · Answer

I am an appraiser, but most times (not all) you will most likely get a reduction for the busy street. How much depends on the neighborhood and what the difference in price sales between busy streets and non busy streets. When I put my realtor or property manager hat on, I advise my clients against it for the most part. If the market falls for some reason and it becomes a buyers market, the house on the busy street will be less desirable than other homes not on a busy street.

In saying the above that is general for most neighborhoods in the Tampa area, except a few. Some exceptions might be South Tampa and Highland Street in Seminole Heights, probably a few streets in St. Pete. I'm sure there are other streets and maybe others could help with that. Hope that is helpful.

Lara Nicole · Answer

@Jonathan Greene You clearly didn't read my full post. Her first reply when I asked about the property was it was ideal, despite being overpriced, sitting on the market, no driveway & no street parking. Only when I asked her about these issues did she change her tune. Obviously this is concerning.

David Eisen · Answer

You will get an honest evaluation by including your property manager in on the search.  When I went looking at properties with my realtor, I took along my PM. Does your realtor own any investment properties? I like working with realtors who are also investors.

Hersh Shah · Answer

@Lara Nicole ideal is subjective for every person and every situation.

If she knows your criteria and why you are buying the house then her answer is fair based on what she knows about your search. What’s ideal for a tenant isn’t going to be ideal for you as an owner occupant.

Make sure you two are on the same page and you won’t have to second guess the professional you have chosen to help you!

Steven Hassett · Answer

To be honest there are not many perfect properties on the market right now and if there is a perfect property, it will sell so high above appraised value that it won't be a good deal.

Every property right now is going to have a downside.

I always try to see the best in people, is it possible she was just busy, looked really quickly, and didn't notice those flaws.

It looks like she gave you a very honest answer when you asked her about it.

Untrustworthy real estate agent?

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