All Forum Posts by: Adam Butt

@Joe Splitrock All valid points. This comes back to my point on trust and transparency. At the moment there is no rating and review system to vet your agents, and there sometimes may be (but not always) a sense of closing a deal and getting the commission.

Correct me if I am wrong, but the whole sale/purchase process is facilitated by the Agent, who are people you have never worked with before. At this stage you are forced to trust them in order to build a relationship and get the desire level of service quality. However, the Agent would still be inclined to directing you towards properties in their portfolio, offering a limited view of other market listings.

With this in mind, I open the floor to BP with a question. Do you see value in employing an independent agent, carefully vetted by an organisation, credible through feedback provided on previous engagements, and open about their skills and experience, to inspect, report and advise on a property that you have identified, in exchange for a small fee ($50-$150)?

Before answering, please consider the fact that you have reviewed your deal pipeline and have been left with a shortlist of properties to investigate. Consider how long this will take and how you would otherwise use your time.

Thanks

@Matt M. Thank you for sharing your thoughts. Were these out of town or local purchases?

@Ola Dantis Very useful feedback! It may not be at the extreme of buying in some cases, but also leveraging local insight to carry out your earlier due diligence before investing your time and money. 

You comparison is relevant, there seems to be a growing disconnect between people where there is no sense of trust. I myself as a growing investor and entrepreneur would be comfortable paying a small fee to allow a qualified and vetted local representative/agent to be my eyes and ears on the ground. This not only allows you to focus more on Income Generating Tasks (IGTs) to maximise wealth, but also provides a source of income for for your representative.

I strongly believe that a commission based model taken by an agent for the purchase or sale of a property is not sustainable and low volume. Instead of charging extortionate fees, it makes sense to deliver the exceptional service at fair value, grow your reputation and grow your volume of service.

This makes for fair and profitable business model.

@Fred how do you source your International clients and/or how do they get viability of who you are and what you do? Adam

@Richard what are some of the pain points you experience in the acquisition and management process?

@Matt Berklacy Thank you Matt.

Verifying repairs would be something to consider, especially to avoid being taken advantage off by property management firms. Can you explain more on the US consulate?

Where I see value is the supply of labour out there that can carry out the management tasks without the need for significant input from the investor. Think of them as an employee in the sense that they would need to be carefully vetted, and would only receive payment on rent collected and not rent due for management of the property. This provides an incentive for them to minimise costs and operate efficiently. In the meantime you as an investor are reviewing where you want your next project to be, and setting up the support and network you need in that particular area.

Value proposition of this platform:

- Submitting offers at your convenience and not at the leisure of an Agent

- Outsourcing property management to carefully vetted Property Managers

- Open your money to the global market vs. your local market

- Ability to market your property as a seller to international buyers (when you want to exit)

Adam

@Benion Great feedback. I would like to point out a difference between site unseen and site vetted by a trusted support network and live reviews. If you like the building and people reporting to you are giving the green light on condition, does it not make sense to place an offer and secure your interest? Saves you time and suffering the risk of losing the deal. Adam

@Richard as is the case with majority of investors across the world and I agree on your point that this is a large investment. How often how you look to overseas for better yield? If there was a opportunity to invest in Australia (as an example) presenting exceptional returns, and you had the option of employing local specialists at low fee (property management, property inspection) would you still consider viewing in person? Things to consider: - You have the ability to take live virtual tours - You will have a rating and review system when employing local representatives to provide a detail report and images of the property - You’re only concern would be decide on when to collect your cash flow and when to exit To point out the elephant in the room, you are leveraging other peoples time across the world to build sustainable revenue channels, whilst getting access to a global library of property listings to compare yield. As mentioned by the post below, listings tend to get snapped up very quickly. Being able to put down an offer after you have your ‘on the ground team’ do the work in exchange for a fee, means you can get in at the right time and at the right price point. A final point to mention, the good deals tend to be ‘off-market’ and/or held by agents who release to their network. It then becomes a game of who you know and not what you you should know before placing an offer.

Thank you all for your thoughts. It is true to some extent that if you have little visibility of the demographics, financials and property condition, you could be at risk of a challenging purchase. Although most of the time, these processes are outsourced to financial advisors, property managers and real estate agents. Therefore there is an opportunity cost between time spent on viewing the properties that are only permitted by your immediate network, and time spent on finding your next deal which could bring thousands of dollars of cash flow. What if there was a platform to create greater transparency of the properties that were on the global market without having to rely on word of mouth marketing. It makes sense to me to first find a property with a favourable yield (comparing real estate in UK, US, Canada and so-on), then find a local representative/agent to facilitate the purchase, rather then finding an agent that only shows the few properties in their portfolio. The time it takes to sell a property can also be decreased by opening up your listing to the global market (i.e. marketing to overseas investors). I have personally found that I have very little visibility on what properties are for sale in a particular State in the US, as a resident of the UK. The only way this is overcome is by contacting local real estate agents who focus on a narrow portfolio and charge fees that can be avoided. Not only would this open the marketplace for both buyers and sellers, it can also be used as a tool for investors to understand what yield they could be getting for their money. I.e. investing in a property in Canada could be more profitable than investing in property in the UK. I believe this can be solved through technology, by networking with local representatives that can carry out the due diligence on your behalf and send you all the Management Information you need before you comfortable with placing an offer. What happens after you submit an offer, and/or how do I manage the property from overseas? As previously mentioned, you need to decide how you want to spend your time. Property management can be very time consuming investors need to ask themselves, is this the best use of my time for creating wealth? This is where leverage kicks-in; there are people around the world that manage properties for a living and enjoy doing it, where investors should be scoping the market for their next project. I noticed trust can be an issue when transacting abroad. This is the same notion that AirBnB have overcome with their rating and review system, which now provides a safety net for people to invite complete strangers into their home in exchange for money!!! (A concept that would of been bizarre a few years ago). The rating and review system can help you find those trustworthy people out there with a good track record. In a nutshell, more investors are looking to move away from becoming a landlord and moving towards investing in assets to create wealth without the mundane management responsibilities. To speed up the process and wealth creation, we need to tear down the barriers preventing investors from investing globally and getting the best return on their money. All feedback is welcome!

As quoted by some of the great titans throughout history, time is the most valuable asset that people possess. Time spent on viewing and maintaining a property can be leveraged towards finding your next deal and building more passive income. Given the growth of technology, the world has become a smaller place where we can communicate with people across different time zones on demand and build our network. I am conducting research to investigate how technology can be utilised for streamlining the due diligence and buying process from the comfort of our homes/offices. I’d like to leave you with this question and kindly request your thoughts: Would you consider submitting an offer for a property located in another part of the world without physically viewing the property, but instead using tools such as your devices to conduct virtual tours and local representatives to validate the property?