All Forum Posts by: Joel Owens

Bryan,

I have read your points and I certainly don't agree with them.No WHINING here I just set some things straight in my post on issues that people were mis-informed on.

If you believe brokers/agents have no to little value because of the internet then you will find discounters for your business.

That's fine you want to operate that way.

There is plenty of free trade in the market.There are companies that will list your property for 500 bucks.Just picked up that expired listing and sold it.

Assist-to sell,C-21 click-it,etc. is all the same stuff.

Many buyers brokers/agents AVOID these listings because the companies offer limited service.Then your left dealing with a seller where you could have implied fiduciary duty which can be a legal mess because the listing company is non-responsive.

Brokers and agents that are licensed are trained in contracts and held to a higher standard than investors.

I read all of your posts in this discussion and to me those were ramblings of all the reasons brokers/agents are overpaid etc.

I hear and understand Vikram's point of view and also do not agree with it.There are agents in my market that list for say 2 percent or 1.5 when the investor gives them many properties to sell.That is a choice they make.

I turn listings down all the time as there are certain people you don't want to work with.

I just think this is a dead topic.You will have many investors say brokers/agents are overpaid and you will have very few brokers/agents agree with that statement.

It all depends on the side of the fence you are on.Everyone has a different perspective when it benefits them and their interests.

Did you buy cash or do you have a loan on this property??

If a low fixed rate loan maybe you hold long term.

If you bought it cash I say sell and buy more and grow your cash.This is one of the best buying times for residential and commercial in our lifetimes.You have a perfect storm of low interest rates for loans and cheap values.

So I would be buying up like crazy as long as they are GREAT deals and not GOOD deals.There are many good deals out there but you are looking for the great ones.Especially if you have limited cash and are trying to grow your portfolio.

Banks aren't touching any of this now or in the next few years.

More distressed residential and commercial is hitting the market.

As a couple of VP's of local and regional banks have told me.

Bring in a request for a unsecured line or construction loan to the committee for a vote is the fastest way to get you CANNED.

They have too much of this crap defaulted on their books.

They want NO RISK lending to offset book losses in the future so that the FDIC doesn't shut them down for not having enough capital and loss reserves.

Private money is the way to go.If the project and numbers make sense they will do it.

This goes back to when rehabbing a property NEVER over improve it for the area.

Buyers will appreciate it but will not overpay for it. (typical investor mistake).

Use the the Trump principle.Have one item in a room that is super nice so the buyer thinks quality and elegance.When doing buildings he would always put minimum code into the structure and save the money for the EYE CANDY for the potential buyers.

In my market condo's are tougher to sell for sure.I think you overpaid and could have gotten the property cheaper.

As long as you can make money off of it you can move on to the next one.over time you will build a portfolio of flips and ones you want to hold for the long term.

Wow ! this topic is CRAPTASTIC ! LOL

Man the views some of you have are crazy.

Some not posting but reading this venom will NEVER want to work with you on a deal because of your views of brokers/agents.

Really,really think about that for a minute.

I think in this topic there are many problems.

1.You ARE NOT required to be a REALTOR to conduct real estate as a licensed broker/agent.Now your local state MLS might be owned by a REALTOR organization or not and require it.

Also if they don't require it your Broker might require it in their Independant Contractor agreement.

In my state Georgia you ARE NOT required to be a REALTOR for mls access.I am the broker owner and have 24 agents.

2.There is collusion from investors just as much as NAR.Many people will do illegal or unethical things for money.I don't know how many times investors will play with fire only to be burned when HUD comes back and says the scheme that an investor ran is now illegal and they will be prosecuted for it.

3.If a broker/agent can't defend their commission do you really want them helping you with your buying or selling??

My answer would be NO.They are simply going to roll over and cost you money and are WEAK.

I don't negotiate my fee period.It's my business model and I create the rules.I have had sellers say agent XX only charge blank percent but I want you.

I say my fee stays the same and have a good day.Some call back and some don't but I keep on making money and having the life I want.

As far as bonuses those are CRAP as well.Especially when they are tied into certain conditions that must be met.Do you think most brokers/agents trust investors??Really??

I am in investor myself and have long term relationships with other investors I work with.I am not looking for some huckster trying to get cheap service one time and then use someone else the next time.

Many know bonuses tied into conditions are a waste and the sellers will look for any out to screw the buyers broker.This is why to just pay a higher buyers co-op is better.

The TRUTH is you will get more showings with a higher commission that is guaranteed IF the property is priced correctly for it's condition and location.

The statistics are about 86 percent of new agents won't last a year in the business.Knowing that they will likely only do a few deals before burning out they are looking at 2 things.

1.The broker will have them on a fat split where the agent is on a 50/50 or 60/40 split their first few transactions.

2.With only making a few sales they want them to count (big co-ops).Why do you think builders are always paying higher co-ops??

Many experienced brokers/agents are listers as you can handle multiple sellers but not as many buyers at once.So that tells you a ton of buyers agents are NEW AGENTS hungry for money.

As far as selling off of list price it depends on what you are priced at.

Is the market trending downward,flat,or upward and at what percent each week,month?????

What are the absorption rates for your area??

In a buyers market which is most of the country right now buyers will look for the best product in the bottom 50% of pricing of RECENT SOLDS.

I thought this whole topic was pretty funny and I knew there would be strong opinions on both sides.

Anyways off to list more properties.Have a 1.5 billion dollar fund company setting up for acquisitions starting October 5th I am working with.

bye bye

Hey Mitch,

At your level of 8 units typical fees for property management run 8 to 10 percent of collected gross rents.

If you can buy 50 units or more typically you can get a 5% management fee for volume.

188 miles away is not going to work to run yourself.A key when buying is what is the condition of the complex as far as structure and mechanicals??

You can bet if it is older and not redone recently you will constantly get calls for repairs and problems.Also pay attention to the terms of the leases you are inheriting as that can be a major headache.

Don't focus on just the fee charged but performance and what they do for that fee.
No matter the asset the property management company will either sink your asset or take it to new heights.

I like going to www.irem.org to search.They are specifically managers and go through extra training. You don't want someone with other interests running your property.

I don't do property management because I don't like the headache either for the low payout.I stick to sales only.

Joe this all goes back to expectations of what you consider a deal.

"What puzzles me is that CRE has been tanking, but where are all the opportunities?"

This statement is INCORRECT.Only some parts of CRE have been tanking. Banks are choosing to unload many lots,fractured residential and commercial developments because banks don't see a short term recovery there.

They are also unloading mom and pop type C class property that is vacant or has huge problems.Usually only cash investors can purchase these because lenders won't touch them with the vacancy levels.

Some investors in pre-foreclosure are walking away from properties with recourse or non-recourse loans where the investor doesn't see an equity upside if they hold on for the market to return.

In those cases the banks have to sell the note or foreclose or the short sale if the seller agrees.

Core A and B assets you have MANY finds desperate to unload their built up cash to acquire assets for their investors.

So it's supply and demand for quality assets at a great price.

If I was bank and I have a brand new anchored Publix shopping center I funded I would look at it this way.

There is one up my road that is 16 months old.Occupancy is at about 40 percent.I know the developer is treading water.

The bank would much rather work with the developer on the 20 million dollar loan and put some payments on the bank end or reduce the interest rate while occupancy increases them to foreclose and take a 8 million dollar haircut based on current cash flows.

This is what many investors don't understand.Banks aren't stupid and they will dump the junk and extend quality on larger loans they can get performing again and preserve value.

Depends on the sellers.Some might be wanting to sell for the first time in 4 to 5 years and not be in tune with the market.

Others are trying to solve personal or business problems in their lives by trying to extract a certain amount of money out of the property by selling.

Often repeated phrases I use:

"No amount of marketing in the world will sell an overpriced listing"

"Your properties current market value and what you need to get out if have absolutely nothing to do with each other."

I wouldn't touch a Starbucks with a ten foot pole.They are contracting heavily nationwide and repositioning.When they were growing they had no competition.

Now every restaurant chain practically has some kind of fancy coffee or frapaccino.Many now instead of a 4 dollar drink at Starbucks can go to Mcdonalds and get similar for a 1.00.

I know it's not the same but people will trade quality for big savings for OK taste to get a fix.

I know about the restaurant industry and was in it for 10 years before getting into real estate.

Same goes for Blockbusters.They are getting crushed by Netflix and Redbox DVD.They are fixing to go into bankrupcty and go under.

As lifestyles and technology changes some business will flourish and others will expire.This is why it's important to know what is growing and what is contracting so you aren't left with an empty space and no cash flow.

I personally like Walgreens or CVS's. They sign long term leases and with the boomer generation retiring and living longer anything to do with prescriptions and medical is booming.

Used to returns were a 7 cap in a hot market but I have seen 9's and you probably can get in the 10's.

Not as sexy as some riskier investments but you get mailbox money with no maintenance or headaches from a billion dollar tenant.The escalations are fewer and not as big of jumps but you get the stability and piece of mind.

Here Auto zones,Napa auto parts,and Advanced autos do well also.

So what kind of investment you make depends on many factors.

I talk to investors everyday so when I go in for a listing appointment I have that knowledge to share with a seller.I often time tell them "If this number is your expectancy I do NOT want your listing" and I then tell them that they do not need to sell in this market.

They are usually shocked and either keep the head in the sand or come to reality and list it right or wait for a recovery.

If in the sand they list with someone else and 2 to 3 agents later they call me back or it just keeps expiring.Either way I won't waste my investors time with overpriced trash.

I also make sure the sellers provide accurate info when I list the property. No omitted numbers,puffed numbers,fancy pro-forma junk trying to sell the upside of the property.

If you want to PM me privately we can converse more. I am always looking for more nice,quality investors to work with.

My listings go on Loopnet and Costar.

Costar is one fee monthly for unlimited listings.

Loopnets model is a different animal.YES anyone can post a listing FREE.The problem is less than 10 percent of loopnet buyers see the listings.

Loopnet knows this and it is how they generate their fees.

To be a premium member based on your number of listings can get real expensive quick.This is why I only take realistic sellers as to give them proper exposure I have to outlay plenty of capital.

Loopnet does give me a lot of leads and help close some deals.It is not the only avenue however but part of the overall puzzle.

Depends on the size of the local or regional bank and how many branches they have.

You can get a list of banks in Texas from your state's "banking and finance department".

In small banks the person generally is the collections manager for pre-foreclosure and note sales.They will usually have an asset manager for the foreclosures.

Most keep the foreclosures in house that are small and use local brokers/agents.Big banks usually outsource to AM companies.