All Forum Posts by: Darrell Lee

I've purchased 7 bank REO's in the last 2 months and several were delayed as the bank had not yet acquired title. I didn't mind waiting in most cases but that is not unusual and usually the bank PSA's are really favorable for the bank/seller and the buyer's rights suck... But it is worth it because hopefully you are buying the property at 20-40 cents on the dollar.

One of my friends who was one of the top agents in the country drove a MBZ 2 seater, the advantage is the clients would have to drive her if they wanted to just take one car.

I retired from RE brokerage 18 years ago, and today I drive a MBZ 2 seater. I bought it a few months ago used for $7k. You don't have to buy new. The car looks nice and would be quite presentable for a new RE agent. I'm old now and I don't really like the car as it isn't easy for me to get in/out of it so I will be getting rid of it shortly and buy a old beat up pick up truck when I make my move to the state of Vermont. I don't need to impress anyone and I want a beater so when I drive to Boston to fly out of the Logan Airport, I can find some unmetered street to park it for a few days or weeks at a time without worrying about it getting stolen or vandalized. In Vt, it's over 2 hours away from Boston and I hate asking friends or employees to drive me to the airport. I'm too cheap to pay for a limo... I'm also going to buy a motorcycle that will be used and hopefully ugly so no one will want to steal it.

If I was a Realtor but in Vermont, I'd probably buy a new MBZ SUV but that's just me...

I used to sell in Marina del Rey and Venice and I like the control of driving so I wouldn't buy a 2 seater today. Also I used to enjoy working with buyers and being a former professional MotoGP roadracer, I hate it when I'm a passenger with a bonehead driver or I much prefer a 4 door and I always want to drive the clients.

I mostly liked driving a 4 door MBZ personally. I bought my first MBZ new in 1983 I was 28 at the time, but looked like I was 19. Once I got a call from a buyer on my listing and they matter of factly said they are working with another agent who is not available that day and can I show my listing to them and if they decide to buy, they will make an offer thru their agent.

When I got out of my brand new MBZ, the wife literally said... "You're so young and successful... forget the other agent, we want to work with you instead" While they didn't buy the listing, I did list their house... which didn't sell as well... Rates were sky high at that time... around 17% for a 1st mortgage. So don't complain about 4.5% rates... lol

5 years later, I leased a new top of the line 560SEL but I cannot recall making one deal because of the car... I would dress like a bum and I used to joke that the car was my coat and tie... By then, I was one of the top agents in the area and I don't think it would have mattered if I drove a MBZ or a beat up Kia...

Congrats on your decision. It can be a very rewarding career and you will probably see many opportunities over time to become an investor yourself.

If you are planning to become a full time agent, most of the super successful agents concentrate on working with property owners and getting listings. In today's climate and in your locale, I'd suggest a 3 prong attack... 1) I'd cultivate/work on Bank REO's as well as look for bargains that will sell fast, 2) Pick out an active upscale area of about 300-700 homes and start farming. 3) I'd hold open houses as often as possible in your new farm area. Do not hold open houses on stale over priced listings.

I'd recommend you associate with a Realty co that has lots of listings in the area you want to specialize and find agents that have lots of listings that you can hold open house on their listings until you get your own. Forget looking for an investor to work with for now... you need to learn the business, the numbers, the markets and lots more before you'd be of any use to an investor.

Farming takes time to grow and produce results which is why you should hold open houses to generate buyer leads, listing leads and hopefully some sales and cash flow. Learn the financing options and learn how to calculate loan payments and true cost of home ownership.

Find a well priced home in a good location to hold open house. Get there a couple of hours early and have flyers inviting neighbors to your open house. I used to provide elaborate food but my area was $500-900k houses. But ice cold lemonade and oatmeal raisin or chocolate chip cookies will be fine. Door knock as many neighbors as you can to invite them to your open house, you might be surprised with the results.

There's lots more to learn and I hope others will add to what I've already given you... Be persistent, always be available on your cell phone and always return calls or emails and build a reputation as a professional, dedicated and knowledgeable pro.

On a couple of deals I've closed this year, my offers were I write the Sellers a check for a net amount and I pay all the closing costs, unpaid taxes, lawyers fees, title, etc.

One property is a 10,000 s.f. commercial building that was listed at $90k and I originally offered $50k that was accepted. After inspection, I was less excited about the property and didn't care whether I bought it or not... So I offered $20k net to the seller and I pay ALL costs which worked out to about $20k plus $13k costs totaling $33k. I was honestly surprised that they accepted the offer. So, the records show the sale price of only $20k and so my basis is very low to start with...  But not really a big deal once I lease up the property and it establishes a track record, at a 10 cap, it could be worth $500-$650k.

I closed a SFH giving the Seller a check for $5k and paying all the unpaid taxes and closing costs totaling about $13k for a real sales price of $23k, but again the sales data shows only $5k which really kills the comps in the area with houses priced from $50k (REO's) to $250k and most of the similar houses asking $150-250k. This being a 4,000 s.f. 7br/4ba1900's SFH that was being operated as a legal duplex (major fixer).

Being in Vermont, with the Vermont Land Gains Tax, my Vermont investments are scheduled for exit at least 2-3 years down the road to minimize that tax. This will also give them long term capital gain tax treatment as well or possibly do a 1031 exchange with the properties.

Do other BP members utilize a net cash offer strategy such as these?

 I'm going to be selling a house in Memphis... can you recommend your agent? I'm not happy with the one I found and haven't signed with anyone yet...

Good to hear there's money to be made in Toledo! I am in contract on a couple of Ohio houses, one in Dayton and the other in Toledo. I'm in Hollywood, CA and haven't seen the houses and want to sell them to cash buyers. PM if interested.

BTW congrats. I just started back in REI and since March have closed or in contract 9 deals in 4 different states... Ohio, Tenn, VT and NH... Wheeeee... it's like Ebay!

I'm more of a BRRR investor, but I want to concentrate in the NE states so the Ohio and Tennessee properties must go...

Just hire an Eviction Lawyer without delay. The longer the delay, the more it costs you. When you win the eviction case, you can go after him for the amount owed and if he has a good job, you should be able to attach/garnish his wages.

Go get the dickhead and don't get mad, take him to court.

@Ed Caldwell maybe you know the answer...

I recently purchased a SFH to live in and took title in my LLC. Will this be eligible for tax free treatment as a primary residence after 2 years?

Thanks in advance.

Oh no... the Nigerians are back!