All Forum Posts by: Cliff T.

It seems as though this is now becoming redundant. I'm not here to try and persuade anyone of anything. I'm not preaching that anyone should or should not use a realtor. You can do as you please. There are pros and cons and not my opinion nor @Rick Santasiere 's will satisfy every person in every situation.

@Rick Santasiere It seems as though you are a realtor first and a real estate investor second, or not at all. This thread was created to by someone looking for help on submitting an offer on their own, without an agent/realtor. I think, for the most part, we have all failed to provide that person with the help and information they were truly seeking and have instead used this platform in the same way most people use facebook: to blurt out our personal opinions and accuse all those who disagree in any way of being shortsighted.  

If you'll read the posts thoroughly, you'll see that I'm not suggesting that anyone shouldn't use a realtor. However, MANY investors would MUCH prefer to collect an additional 3% on their deals, especially if they have MORE experience in real estate than MOST real estate agents/realtors do. Your assumption is that everyone reading this has no clue how to do what a realtor does. 

So far as real estate investing goes, using an agent is, in fact, a personal preference and not at all a necessity. Many investors get their real estate license simply because they dislike working with agents/realtors. Others get their license so they can pocket that 3% more easily. I'm sure you are a great realtor, but this is not a billboard, it is a thread for someone looking to do something without a realtor. I wish we could have been of more use to that end, rather than just trying to toot our own horns for publicity's sake. This thread should not make any legitimate REALTOR feel insecure about their job security in any way...

@Rick Santasiere That's a great example! It can work that way here in SC as well.

I agree that "a buyers agent makes sense for someone who doesn't buy and sell homes every day." What prompted this was saying that you could not imagine a single situation where someone would not want to use a buyers agent. I was simply providing one such situation (where the buyer would prefer to represent themselves, get the lowest price possible, and then collect the additional 3% that the seller was planning on paying to a buyers agent/representative). 

Some of the best deals involve no agents at all. Just a seller, a buyer, and an attorney. The next best deal (for the buyer) is to only involve a seller, a listing agent, the buyer, and an attorney (assuming the buyer gets the 3% commission set aside for the would-be buyers agent, instead of the listing agent collecting all 6%). This nets the buyer a better deal by 3%. When it comes to real estate investing, what investor wouldn't want to save an extra 3% on every property they buy!?

In short, I think most folks on this forum would prefer to stick that would-be agent's commission into their own pocket!

Also, for any buyer who does not have as much cash to put down as they'd prefer, this extra 3% can make the difference between buying or not buying the house they want. 

Good thread, I hope this is helpful to BP members looking for ways to improve their investing dollars.

I wish there were more responses to this thread as I'm currently trying to assess this avenue as well. Thanks to @kerry 

@Kerry Mertz! Very good to know!!

I will add that Morris Invest (Clayton Morris) suggests FundAndGrow to their prospective clients. On that note, they also refuse to work with bank financing, which forces you to pay cash and then refinance, or use FundAndGrow (or the like). 

Warm regards :)

@Mike Cumbie I totally agree that a buyer's agent is almost always worth 3%, especially on cheaper properties. Why get brake fluid all over yourself and your garage when you can pay a small fee for someone else who is probably more capable and better suited for the job to do it for you? Most investors take advantage of saving themselves as much money as they can reasonably justify. 

I'm not suggesting on a general scale that people should not use a buyer's agent. I am pointing out to @Rick Santasiere that there is definitely at least one good reason some people may not want to use a buyer's agent.

Regarding your comment about a buyer representing themselves as principal and not being privy to the 3% that was allotted for a buyer's agent... I will have to disagree with you on that one. A listing agent has a fiduciary responsibility to the seller. Any listing agent who lets a perfectly good deal fall through because they want to keep all 6% is a bad agent. "Sorry client, I could have sold your house for asking price today, but I didn't want the buyer to have the 3% that we will end up giving to agent of the next buyer anyways..." That's silly. 

Since we're on the subject, I wonder if anyone has any suggestions on how negotiate for the 3% to be credited to the buyer at closing towards their down-payment? In SC & NC, the commission is not addressed in the offer to purchase. I know this isn't something most agents will want to become a norm, but this is mostly for BP eyes and I'm sure some people would appreciate having an understanding of how this process works. 

What a lot of people don't realize is that you don't need a license or an agent to purchase a primary residence. For example, I have my SC license and am shopping for a new primary residence in NC. I could represent myself as an agent, but then I'd be splitting my commission with my firm.   

                ...OR...

I can represent myself as principal (no agent or firm involved on the buyer's side) and negotiate that 100% of the 3% goes towards my down-payment at closing! 

So for all of the agents out there who  "just can't imagine why someone would..." Well, there's ONE big reason right there for ya :)

Even when I have a real estate license in the state I'm looking to purchase a primary residence (for myself), I would still represent myself NOT as an agent, but as principal. Especially when I'm being creative and applying 3% to the down-payment. Just my $.02, but here's a third (cent):

A person without a RE license buying as principal can ALSO negotiate that the 3% set aside for the agent you never hired go towards YOUR down-payment!

In a way, it's kinda crazy to use a real estate agent... that's 3% you can keep! From my experience, it's surprising how many AGENTS don't understand the forms... so don't feel defeated if you don't understand them after 1 read-through. It takes a little bit of time, but is definitely worth it if you want to represent yourself and GET PAID at closing.

I definitely see your point. I'm really excited about this HELOC. I can do so much with it...

1. Pay down my primary mortgage faster and reduce the amount of interest paid

2. Buy more investment properties

3. Loan it to friends and family at a higher rate

4. Buy tax liens at the end of the year

@Thomas S. The dead equity is definitely a bad thing regarding the rental property I described above. But that's not the case with my primary mortgage, right? Paying it down faster saves me interest and gives me the ability to take out another HELOC sooner. Just trying to make sure my logic is right on that, thanks!

Thanks Chris! Yea, you're right. I didn't really look at it that way.

I'd like to save some of the HELOC to buy another rental or a new primary with soon, though. I guess I should have mentioned that.

I don't really mind the interest on the investment property, since it's a deduction. The mortgage is only $196/mo. 

I suppose if I look at it your way, I should just set aside however much of the HELOC I think I'll want to use elsewhere, and put the remainder on the house. Right?

And the slap on the forehead realization is this: I just spent $1000 in closing costs.... when I could have just paid cash with the HELOC had I found the HELOC deal sooner! But then I would only have 1 rental property and no more funds to buy more...

Purchase Price: $30k

Down Payment: 20% or $6k

Mortgage Amount: $24k

APR: 5.5%

Term: 15 years

Repairs: $8k

ARV: $40k-ish

Rent: $700

QUESTION: How much should I pay down this loan right off the bat with a 1.99% HELOC of $30k?

I just bought this deal (my first one) and am currently making the repairs. A local credit union just started a nice HELOC program so I'm jumping on it and figured paying down (or off?) this new investment property mortgage is a worth-while consideration. However, I do not know what strategy I should employ here. How do I calculate how much I should pay down to keep a good COCROI? What do you guys consider the sweet-spot to be?

Thanks to all! 

Hi ALL,

I just inspected 3 properties all owned by the same investor. Each property has long term Section 8 tenants.

1 of the 3 has had the same CLEAN tenant for over TEN YEARS. I spoke with them and they are intent on staying. 

The other 2 have been there over a year, but are pretty grungy tenants. However, they are also intent on not moving.

Can someone please tell me what I should expect if I buy a property with Section 8 tenant and KEEP that tenant?

Closing?

Setting up payment?

Signing new lease agreement?

How to raise the rent? 

What else should I find out?

Thanks ahead for the advice! I hope this helpful to others as well!

@Tim Ivory, You are correct that with a Lease Option Sandwich, it is your job to put in a tenant that will become capable of purchasing the property. If you only put in tenants who you know will never be able to purchase the property and take a large deposit, then you will be performing an unethical practice (I'm not implying that you would...).

Once the lease option expires the contract is complete. The landlord/owner/seller is now in full control of his/her property and keeps your deposit money. It is wise to put in a clause that allows you to pay for an extra year. That way if you are running out of time, you can put another $1000 down and buy yourself another year to rent the property to a prospective buyer, or just go ahead and sell it. 

I've heard good things about @Wendy Patton. 

Chris Goff does a pretty good overview, the best I've seen so far. Here are some links:

Part 1) https://youtu.be/3Png0s4MSr8

Part 3) https://youtu.be/fX8hLwQBSAI

Good luck!