All Forum Posts by: Carrie Giordano

@Account Closed thank you for your feedback. It definitely gives me something to consider regarding the sale of my home. However, what are your thoughts on the purchase of a new home? Every home I’ve purchased, I’ve actually found on my own. So giving the agent $30k to write an offer and negotiate the deal seems excessive. 

I would love to hear from anyone in LA that  currently holds their license with a discount broker and the costs associated with it. 

@Jay Hinrichs I know you just recommended that another investor get his license for making offers on investments so I would love your opinion!

As a bit of background, I live in Los Angeles, my investments consist of sfh in Ohio and one vacation rental here in California. Before I began investing, I got my CA real estate license (Its now expIred), signed on with an agency and did it for about a month before realizing that it wasn’t the aspect of real estate I was looking to do. While I don’t do much investing in California, two years ago I rehabbed my condo and traded up to a more expensive home. I would like to do this same sort of live in flip one or possibly two more times to eventually work myself into the neighborhood I really want to live in. With prices being so high in the area paying the 5-6% agent fee upon the sale is quite hefty. So here’s my questions: would it be worth it to obtain my license again for the sole purpose of buying and selling my own homes or is there enough value in an agent to pay the commission? And, if I do go the route of getting my license, how can I find a broker to support this type of arrangement?

@Kevin Lefeuvre Yes, I did invest in Bb. I spoke with several of the top property managers before purchasing for tips for buying a home that would make a successful rental. I found out that most people who buy an investment property there sell within 3 years. This is due to the difficulty making a profit with the heavy overhead, including high management fees (ave 27%,) high repairs & capex from harsh winters & sun at the high altitude and wear & tear, snow plowing, expensive insurance and some of the highest utility costs in the country. 

We were told that we should look for a property for no more that $200 per square foot. Another aspect stressed as important for the rental was that it must have a hot tub and pool table or some sort of game room. 

Personally, we had to make a choice between something that would be a “cash cow” or something we felt had potential but that we would also be right for our family. We found a cabin with incredible views that needed cosmetic work so we could add equity. We ended up paying $223 per square foot but people seem to love the place. What we paid for the views seems like it will pay off in the long run.

I decided to self manage with the help of a cleaning crew. While I knew it would be a lot of work, what I hadn’t expected was the idea of constantly being on call. It seems every holiday I get a call about something. Many times it’s common sense things like how do you turn the shower on or the hot tub won’t get hot enough with the cover off. Plus, every time we go there I find something broken. It becomes hard to ever spend time there without working on projects. 

If I had to do it over again I would because it has been an incredible learning experience. I would do another vacation rental but not there. It would be somewhere that has more year round potential. And no snow! 

Let me know if you have any other questions! 

@Joe Splitrock thanks for sharing your experience. You are absolutely right in pointing out that the reserves are actually higher than the .03% that I paid and that they must be averaged as a whole over several years. I was trying to make a point for new investors that from year to year the numbers can be dramatically different and you must be prepared for the down years.

When evaluating a new deal I always account for capex at 10%. Being that I’ve only been in the business about 5 years I’m not sure how accurate that will be in the long wrong. However, it’s interesting to hear that in your case the 10% was pretty accurate. 

@Steve Vaughan thanks for sharing and the encouragement! 

@Jay Hinrichs we always hear about the cycles of the market but much less on the cycles of an investor. It’s a pretty interesting topic, have you found yourself going in that direction? 

@Mindy Jensen great article! It’s so true that in life as well as our investing it’s best to be prepared for the unexpected! 

Thanks for sharing @Nathan Gesner, I'm glad you still like him but don't blame you for finding a new agent!! Similarly, I started with little reserves and really didn't know what I was doing. I had a family member managing for me and my first two tenants turned into bad evictions! These experiences have definitely made me wiser which is why I keep high reserves. I'm just glad we made it through and are still investing!