All Forum Posts by: David Ribardo

I recommend Bob Rust for establishing an LLC. You will also need a designated agent, they will establish a postal address for you in Pennsylvania for any official notices you receive. Typically the attorney fee is about $600 to set up a new LLC, the state fee is $125, and a designated agent is usually $50 per year.

One thing to keep in mind is that if you already own a property in your own name, transferring it to an LLC is considered a sale, and the state will collect their 2% transfer tax. As such, it is important to make the decision on whether to buy in your own name or an LLC initially, since it can be expensive trying to transfer the properties after the fact.

@Stephen Kunen @Jason Behrens I'll second Bob Rust. He is very straightforward, easy to deal with, and has some of the best pricing I've seen. My recommendation - you can save some decent money by drafting a contract and having him review it for you, as opposed to having him draft the documents from scratch. If you have the knowledge and time to do so, it can definitely be worth your effort.

Hey Chad! Looks like weather might be pretty nasty Tuesday, any plans for an alternate date if it snows?

@Manuel Salce, Long story short - no, you should not try to be a listing agent long distance. However, there are a few ways you can profit from what you are doing. 

As far as listing properties goes, as a real estate agent, you have a fiduciary relationship to place your clients best interest above your own self interest. You must work continuously to find a buyer for your property. You are required to have all knowledge of the local market so that you can help your clients make the most informed decisions possible. I only cover two counties, but I know them block by block, street by street. When I wanted to expand my business territory, I hired new agents to focus on our expansion markets. 

Trying to list properties from out of market would be difficult from a local knowledge standpoint, but the logistics would be difficult. You will have to go to sign the listing and at closing at a minimum. Either myself or one of my agents is at any of our listings at least once per week to make sure they are clean and showing well. Occasionally a real estate agent will forget to put the keys back in the lockbox, and I'll have to go change locks, or meet an appraiser, or something else to help sell the property. At five hours per trip, the drive would kill your return on time if you tried to list properties yourself.

My recommendation - DO get your license. Work with a local agent here, and refer them clients. You can collect referral fees through your brokerage. Legally there is no such thing as a typical referral fee. They are all negotiated directly between agents, but the vast majority of referrals I work are 25%. This can easily pay for your direct mail marketing costs, with minimal time and effort on your part. If you build this efficiently and automate it, you can easily turn it into a passive income stream.  

@Jessica Devlin - There are some good opportunities in the B neighborhoods throughout the Lehigh Valley for flippers. The shortage of affordable housing in the market has created a strong demand for 3/2 SFHs in a good school district. I typically see slimmer profit margins on the row homes then I am comfortable with, but I do know some people that flip those successfully. The key there is having a very affordable contractor for the project. Good luck!

@Sean Mcevoy Thanks for the shout out! It's been a great experience working with you in the Lehigh Valley. The big thing I liked is how patient you were - it's easy to get discouraged when you lose out on a long string of offers. Some investors will get frustrated out of a desire to close on a deal NOW. However, by sticking to your numbers, writing intelligent offers, and just working systematically you were able to get a killer off market deal! Well done!

I've got some recommendations for each. Sounds like you have a big project on your hands - I sent you a message, let's talk!

@Camilo Gutierrez I will send you a contact for a hard money lender I like. Check your messages!

Definitely swings the numbers a little bit, but the extra ~$500 / year for a SFH or duplex shouldn't change the game too much. Just have to factor that into your numbers when running deals and offer at the right price. Allentown will still be attractive to investors.

It will be interesting to see if landlords pass this cost on to their tenants and market rents go up about $50 / unit over the next year.

@Jan Kutrzeba- As far as off market deals go, Facebook marketplace and Craigslist have been great for my out of state investors to find their own deals. I get most of my leads from other brokers at the closing table. When you ask them "Hey, what else do you have ready to list?" they will usually swing you a first look. I also get many through real estate meetups - just asking "Hey, anyone got something for sale!?" usually will get a few good leads. Unfortunately, this is one area where you have to hustle and build connections!

With the current competitive market, I find that most of my clients are willing to buy based on potential for future rent increases, writing offers well above what would work with the in-place rents. As @Joe Colasuonno said earlier, look at doing some light rehab and getting a few hundred extra in rent- it's well worth it.

My clients offers are always based on whatever number will get them their target rate of return for the deal. Sometimes that's 30% below asking, sometimes it is a full price cash offer, and there have been some deals priced wrong that we've gone well above asking just to snatch it up. Don't be discouraged- keep writing offers, evaluating your strategy, and it will come in time!