All Forum Posts by: Brad Jacobson

Quote from @Bill B.:

7.25% seems high, would .5 to .75% make a world of difference? (Are the properties expensive enough for this to make a difference.) you could easily get that big a break in the next year. 

I assume there is no chance you could/would move in to 1/2 the duplex to get a better rate, rent out your current home for a year, and then either move back in or preferably buy a new primary?

If you expect 5-10% rent increases per year that should help, if you don’t I’m not excited about your chosen market. 

I assume these properties are still making tax free money (with loan pay down and depreciation.) I bought a property with $800/mo negative cashflow because it was still making $20k/yr in tax free profit. Now that it’s paid off it brings in almost $30k for one door. 

Obviously you’re going to buy them to make the $100k. Pretty obviously you’re going to keep them for at least a year to cut the taxes in half, probably saving you $10-$15k or $1,000/mo. Plus you’ll have a bette idea of how they actually perform. 

I appreciate the thought on cutting taxes by owning for at least one year - I hadn't thought that through all the way.  This will probably be my path forward, hold for at least one year for tax reasons and then see if I have rent increase  and/or refi potential to build on that cashflow.  If it's still a loss-leader, I can sell with a lower tax burden.  

Thank you Bill!

I'm about to acquire three doors (one single fam and one duplex) at a great price from a motivated seller.  Should have at least $100,000 in equity between the three and they're all very much rent-ready.  

The seller needs the sale funds so no seller-financing is available.  With 20% down and a conventional (around 7.25%), the cashflow is going to about break even despite having 20% down and an extra $100,000 in equity.

My long term goal is to have 20 doors in my local city and so I'm anxious to buy and hold - but I've never broken my own cashflow rules before.  I'm in a position where I can handle negative cashflow if I need to, but who wants to do that?

Is the better option to sell the units and cash out on the $100k and then continue to struggle to find cash flowing deals in my local market - OR - do I just sit on the properties until rates come down and build on their potential as long term holds?  

This probably varies from market to market but here in Utah, our demand is such that inventory is still really low and transaction volume is decent even at this super high rates.

I'm very confident that the moment rates soften, prices will jump right back up.  There's a true supply and demand issue right now.

My thoughts are to buy buy buy right now.  Things are on sale.  I'd rather pay a lower purchase price and refi later, than purchase higher with a lower rate out the gates.

Good luck!

Quote from @John Boonphitak:

Quote from @Brad Jacobson:

Hi Fellow BP Fans,

Recently I took on coaching to take my agency business to the next tier.  What I've learned is so simple that it almost seems silly to share but it's paying huge dividends right now.  The golden nugget from this coaching has been the idea of a "power hour" or simply locking myself in my office for 60 uninterrupted minutes and just getting on the phone to say "hi" to everyone in my SOI.  

What else is there that you successful agents do that produces huge dividends?  What is your favorite lead generation technique?  What is one thing you've done or learned that's help push your real estate business into the next tier?

 Hey Brad,

We have something similar called the Top 50 system. I'm sure it's the same approach but just curious how often do you touch your SOI and do you have specific individuals in your SOI that prefer or you know that are more comfortable texting as a touch?

I always prefer calling my top 50 however I know a few that are more responsive to conversate through text.

Do you keep it strictly calls or you do a combination of different communication with your power hour?

Thanks!

I don't have a "top 50" but I have thought it would be good to rank my SOI.  However, I think I can get through all 300ish contacts every three months if I'm sticking to the power hour.

All my contacts start with a call except in the rare occasion I don't have a number - then I'll text through Messenger.  However, if someone doesn't answer, instead of leaving a VM, I'll usually text them.  I've found that has a higher response rate as well.

Facebook Marketplace is usually the only place I need to advertise. I've found it to be way more effective than Craigslist, MLS, Realtor.com, or whatever.

Are you sure your pricing is in line with the market?  Maybe Philly has less demand but in my market, house-hacks at the right price get scooped up really quick.

Good luck!

I put my clients first.  If they don't pursue and I still think it's a good deal, then I'll pursue.  

That happened last October.  Found a duplex that I thought checked all the boxes and sent it to my client.  We went and saw it, he choose not to pursue, so I did, and got it UC.  I was super transparent with him too.  I let him know if he wanted it, my loyalties are to him, but if not, I was going to pursue, and I did!  It further strengthened our relationship too.  He trusts me more than ever after watching that ordeal.  

Clients first.

My craziest encounter as of late was a dumb one...  My tenants asked if I had any qualms with them getting Covid rent assistance from the state last year and I was more than happy to help in their application.  After four months of living rent free on Covid money, I went to pick up the next rent check and my tenants, who I'm good friends with, we're so excited to show me their brand new Camaro they just bought... 

Crazy.  

I wonder why there's inflation?

Realtors or anyone with access to your local MLS are able to go back and see prior listings for that property. This will be limited to the times it sold on the MLS but the images, sold price, and all that good info will be available.

I've successfully pushed a pair of my listing to go UC last month by using concessions to solve problems.

1. The potential buyers loved everything about the listing except the kitchen.  A 3% concession equated to about $20,000 so I suggested they talk with their agent and build a "new kitchen" into the contract via a 3% concession and use that large credit to redo it after closing.  They did so and the sellers accepted.  Win-win for everyone.

2. Another potential buyer came to my listing at an open house and loved most aspects of the listing but wanted a room where he could run his business out of.  I suggested he pay someone to add a basement entrance, so we got quotes ($6k and $7k) so he made an offer with a $7k concession, the sellers accepted, and we sold it.

Use concessions and seller's willingness to work with buyers to solve problems!  Most buyers have very little creativity so help them solve problems!

Quote from @Blake Novotney:

Brad, I like the "Power Hour" idea you mentioned. Is this every day? For me over the last year or so what has really paid off the most is networking my butt off. Going to every single meetup and group remotely related to the industry, not just going once but consistently every month so that I have been able to build meaningful relationships. I make a ton of calls, and this year focusing on creating content as well. I have been liking the idea of mailers to targeted lists, but have no experience there and would love to hear what others are doing.

My first few years as an agent were really focused on posting on social media every day and going to at least two meetups per week.  I did a good job attending things like church, Rotary Clubs, REIAs, FI clubs, etc.  I found that was a good enough to do about a dozen deals per year but I kept hitting a ceiling around 12-15 transactions annually.  

Is that the same for you?  Have you been able to break into a higher production tier?  If so, how?