All Forum Posts by: Tyler H.

It depends on what you mean by "rebate". Any Realtor can offer a "rebate" to the home buyer, and this rebate would come out of their commission. I offer a 1% rebate to my home buyers, and I would consider myself rare. Most Realtors dont know about rebates, how to do one, and even if they did.... They DONT want to do it, because it is a direct hit to their income.

I have a client that acquired a 700 Sqft House on a 1/2 acre lot for about $100K. The house needs a "complete rehab", however "small" it is currently.... Originally 2+1, but the 2 rooms were so small the wall was knocked down to make 1 big bedroom. Roof + Foundation OK, needs complete interior rehab.

We were brainstorming on ideas on what to do with the property.... The house is small for the area, and the lot large (and desirable) for the area. Here are some thoughts we had... What do you think? 

Flip As-Is - Probably worth $140K - Estimated 40K Profit

ReHab leaving same size - $20K rehab, sell for $180K. - Estimated 60K Profit

Small addition of say 2 beds + bath (800 Sqft) - Costs undetermined - ARV Mid 200's

Obviously each step requires a bit more work, but the profit also increases as well. Looking for any ideas, thoughts, suggestions. I dont need any specific critique.... These are general ideas and not business plans! This is in LA County if that helps.

Thanks in advance!

WOW, to think that the revenue from a subscription is worth the integrity of the BP name?! I can understand that any company would not want take a side, but being provided evidence, AND the overwhelming number of people with the same story!

No tricks or gimmicks. Just a straight 1% given as a rebate @ closing. Can be used towards closing costs, or you can donate it to your favorite charity....

Future home owners and Investors alike - Let me negotiate a great deal on your next property, get seller concessions, and add on a 1% rebate from my commission.

Visit www.BenevolentAgent.com to begin your search today or call;

818-674-7523 - Investor Savvy

Happy Investing

A'men

First me must remember the 87% failure rate for Realtors.... Many of them don't have the core business fundamentals it takes to survive. Many I have spoken to actually dislike working with investors for various reasons.

Being an investor prior to becoming a Realtor, I love working with investors and I cant quite understand whats wrong with the others. I chalk it up to lack of knowledge, and I'm sure those agents feel like they are listening to a foreign language when they start hearing GRM, CAP, CAPEX, and more acronyms then they know what to do with!

As for Rebates, I believe in them highly. The way we buy real estate is not the same as it was even 10 years ago. Buyers agents dont need to do near the work as before. I offer all my clients rebates, and it works out well for investors as well.

I offer them to my clients here in L.A.....

But it has to be one the HUD-1, and must be used towards closing costs UNLESS the lender allows otherwise.

Many times the debate isn't really about the legality, but about conforming with lenders rules and/or consumer protection acts. Usually if the rebate takes place within escrow and is properly identified on the HUD-1, everything is OK. In addition, those funds can only be used for closing costs, NOT towards a down payment.... This is why once companies offer to give "cash back" out of escrow is walking a very fine line....

True, if you are a broker and buying at auction BEFORE the property gets assigned to an asset manager and listed on the MLS. A good example of using your brokers license as a valuable tool!

I was referring more to the "traditional" government / bank owned sales done through the MLS. HUD, Fannie Mae, Freddie, etc.

I just recently completed a Fannie Mae "Home Path" property and there was no option for a broker to "forfeit" their commission. The process was as I described above.

I think the point everyone is missing is that HUD contractually agreed to pay a TOTAL of 6% before the property ever hit the market. 3% to each side, the listing and selling agent. So really all the rest doesn't matter, ALL offers already have this taken into account. So basically there is not a correlation between the commission and HUD's net offer.

HUD could have received 10 bids, 1 bid, some over asking price, or under.... But because the 6% came off FIRST, the commissions have no direct impact on how they review offers. The only thing that changes is WHO gets the 6%.

Now, as for future deals, YES you could at least use a Realtor you know to represent you and to distribute that 3% that the listing agent gladly accepted :)

TIP#1 - We know that HUD goes with their best NET offer. So next time your are going to place an offer have your REALTOR add 3% to your offer price, and ask for it back as a seller concession for closing costs. This will save you 3% out of pocket cash. I.E.

You want to offer $200K, add the 3% for a total offer of $206K

Now if you want to kick up your game one more notch then you will add lets say $10 to the offer price so that you out bid the lovely investor next to you who offered $200K cash.

TIP#2 - If by chance your closing costs don't eat up the entire 3%, then tell your LENDER you want to BUY DOWN your rate (assuming your financing). Essentially you will pay more up front to get a lower interest rate. If you don't use the 3%, it will be given back to the seller (HUD), and why would you want to do that?!

I wish everyone much success in 2016! Happy Investing!