All Forum Posts by: Eran S.

Small apartment buildings, 20 units in 4 locations

Thanks for the comments, I never borrowed with a private lender in the past, they charge high closing costs and high rates and they don’t do a good job disclosing them up front. Also with paying application fees in advance it’s a lot easier for me to trust a bank than a person. I borrowed with credit unions before, I found the locals to have good pricing and they lend to my LLCs such that it doesn’t go on the count for the 10 cap for my conventionals. And I have no problem doc qualifying, I have great income, great credit, and lots of experience and equity.

Anyone has experience with credit unions or local banks lending in Cleveland who can help with <$1m rentals portfolio purchase 

Thanks so much for the responses.

I agree with the points around access and better data, especially the access, some of the best deals go on the first few days so those scheduling delays can certainly hinder.

My goal would be to find a broker who would just facilitate my deals, I wouldn't need a desk or any additional services, I would just represent myself, no other clients. Definitely taking the advice to do research to find the best fit.

I expected the typical realtor's talking points: the buyer doesn't pay the commission, it's not always 3%, you're trying to cut in on someone's living, etc. I put a couple of paragraphs below with my opinion about it, feel free to disagree, happy to hear the other side.

Thanks again for the responses

The buyer doesn't pay the commission directly, it comes from the seller's proceeds (which originate from the buyer), and the buyer may have leverage which would allow them to capture some of it. Additionally, the current commission structure makes little sense: similar level of effort by the buyer's agent is compensated so differently. For example, when the realtor works on a $100k house vs. $800k house, say the net commission for agent is 1.5%, on the $100k house they'll make $1500 vs. $12000 on the $800k house. I think the buyer of the $800K definitely has room to negotiate some commission rebate (same story with the broker's portion, same effort 8x more revenue). 

Also, some folks make assumptions about investors buying dumps and making a ton of offers before actually closing. Nothing wrong with buying dumps and offering a ton of low balls, but the reason I'm trying to capture the buyer's commission is because it's significant, I wouldn't do it for a 80K house, nor would i try to negotiate a portion of the buyer's commission when it's so low. I definitely agree that the buyer's agent's effort is worth a $2-3k commission, but not $20K.

I don't see why the buyer's agent would be willing to help buy a $200k house for the full commission on $200K but wouldn't be willing to help buy a $800K house and splitting the commission with the buyer 50/50. And whether it's 3% or 2.5% (or whatever the seller of that property decided to pay each side) isn't the point, the same logic applies. 

I'm thinking of getting a realtor license (in PA) to represent myself on purchasing rentals/investment properties.

The benefits are meaningful:

-Main benefit: Get 3% of the purchase price as cash (or a portion of the 3%) 

-Flexibility of showing yourself in when shopping, no need to schedule with a buyer's agent

-Write up as many low ball offers as you wish without having to deal with a buyer's agent

Some questions come to mind:

-What are the one time costs for getting a license?

-What are the ongoing costs of keeping a license?

-How to find a broker? and how to avoid paying them half of the 3%?

Below is a description of what I think are the costs of being a realtor in PA:

one time:

Education: ~$300 (varies, you can shop around)

Exam provider fee: $54 (have to pay to the state)

Background check: $10 (have to pay to state police)

ongoing:

Sales Person fee: $107 every 2 years (have to pay to the state) 

Local REALTOR associations: ~$300-500 (not clear if this is necessary or not or what benefits it provides, seems like some brokers force you to have it though)

MLS access: $250 per year (not necessary but probably worth it to access better data)

Lock box key: ~$200 per year (not clear if this is required for entering properties)

Alternatives to getting a license:

There is a startup in CA that offers a flat fee buyer's representation (they give the buyer the 3% commission minus a flat fee of $1K-$5K depending on the home value). This would have been perfect although they're not in PA yet.

Another alternative would be to find a broker agent who would be willing to somehow split the 3% with me (a non-broker agent would usually not be allowed to do any splits as their broker wouldn't let them). I think Redfin offers a buyer's agent service with a small split to the buyer, but it's really small.

Does anyone have any thoughts on this? I'm sure some of the high volume investors on here have at least considered finding a way to capture some or all of the buyer's commission. Please share your experience or thoughts!

Thank you!

I'm running a couple of airbnb units and need someone to do the turnover (laundry/change sheets and towels, and cleaning between guests). Could really use someone who's available between 12 and 4pm (between checkout and check-in). If you have a good recommendation please let me know!

Hello fellow home owners,

I recently bought a condo in Philadelphia, the condo management fee I'm paying is fairly high for the services, and it's because 2 of the owners (in a 4 units building) aren't paying their condo association fees.

The management is only getting paid by me and one other owner, which is enough to cover costs but ultimately the costs should split by 4, not by 2. The management isn't prompt in collecting on or warning the 2 non-paying owners. So me and the other owner are just covering the 2 non-paying owners. 

I plan to contact them once I figure out their contact information to see why they're not paying (maybe they have a good reason), one is an realtor/investor who has a tenant in there, and the other one seems vacant. The one other paying owner also seems to be an investor who rents it out and I plan to contact him as well as I figure he'd want to help me resolve this to reduce his payment as well.

I plan to work with the condo manager to collect from these owners and overall reduce my fee to its fair share of the building's expenses. I'm hoping that a quick communication/warning from the manager to the non-paying owners would do the trick but if not, I wonder a few things:

How easy/difficult it is to force the two non-paying owners to pay? can I/condo manager get a lien placed on the non-paying units? What if the manager isn't acting fast enough? How would you go about it?

The condo association agreement specifies how much each should pay and the condo manager has records of them not paying and a balance, so the ducks should be in a row for pursuing payment. Additionally, my unit is a little larger and has more than 25% voting rights so myself and one more owner should be able to make management changes if need be. 

Thanks in advance for your thoughts!

Thanks for the replies. 

I definitely agree with Patti, that legal shield service includes free letter writing which seems like what they got.

Yes, the buyer did his due diligence: 

got an inspection, and negotiated $10K in seller assist for repiars. I haven't hidden anything about what was done in the house, answered every question he had (paint colors, HVAC operation). In fact I provided him a paid-for inspection report that detailed a bunch of defects and not-up-to-code issues.  And having said all that, the house was (and probably still is) fully functional. the buyer walked through multiple times, tested all the systems, and never found a deal breaking issue. 

The signed seller affidavit only has representations regarding the title and liens, which had no issues.

Another funny thing to mention here is how he got my address, he had his realtor reach out to my realtor to say they got package/mail to the house with my name on it and to see if I want to provide a forwarding address. Needless to say- I got no packages/mail forwarded.

I can also update that I consulted with two lawyers (one through a free service my job offers, kinda like legal shield lol, and the other is my closing attorney), they both agreed it is not a serious claim and doesn't warrant a response. They also said that it's not enough basis for an abuse-of-process suit.

Thanks again for sharing your thoughts on this!

I'll definitely look into counter-suing, great idea!

Hello fellow real estate-ers, wanted to share the following experience and get your thoughts:

I sold a house (primary residence but was vacant for a year) about two months ago. 

The house was partially renovated but with visible gaps. During the inspection period the buyer got his own inspection and tried to get me to perform repairs, I refused but he negotiated additional $5000 seller's assist (in addition to $5000 seller assist he negotiated before the inspection, total $10000 in seller's assist), and we reached an agreement and closed.   

Additionally, I provided him a previous inspection report (done by a buyer who backed out) for his review prior to making an offer. Both inspection reports called out a long list of repairs, although the previous inspection had more issues that I addressed before the new buyer's inspection.

Buyer's claim: buyer send me the attached letter claiming that he bought the house because he thought it was renovated well and now he has to spend money on renovations and repairing damages resulting from the unpermitted work

My claim:

The buyer had never asked for permits and neither me or my realtor ever claimed permits were pulled for any work. 

Prior to inspection the buyer asked if the plumbing was upgraded and my realtor replied that "some plumbing was upgraded and some is old" not specifying which rooms are updated.

Buyer claims in the letter that he had no reason to expect problems with workmanship. That is inaccurate as the buyer did notice a lot of workmanship issues and even negotiated seller's assist when I refused to perform repairs.

Btw this house is in Virginia, which doesn't require detailed disclosures from the seller. And I never made any representations regarding permits.

Please let me know what you think!

Do you think this a series claim? How would you respond?

Letter:

Thank you!