All Forum Posts by: R DeMeritt

The short answer in my opinion is no. In So Cal realtors advertise 1.5% and it's easy (Now that I'm looking around) to find realtors that will take a lower commision.

3% to buyers agent, until they want you to discount your property. You can always counter with a property price reduction along with a buyers agent commision reduction up to 1.5% to help offset what they're asking for.

1.5% to sellers agent. It's very common in So Cal. Most realtors simply list property on the MLS and wait for a buyers agent to come along with an offer. My title company does all the work asside from the counter offer so I'm not feeling bad about the 1.5% at all.

I'm listing my next property with a broker and paying a very small flat fee. Most realtors in my area don't have investors to work with. I'm a very small investor and will only flip 12 to 15 properties this year, but tha'ts a lot of repeat business to one realtor that will propbably never sell one of my properties even if I was paying them 15%. What I mean buy that is they wont find the buyer on their own.

I'm confident there are some realtors out there that really have their head in the game. They have buyers lists, they do open houses, they network, they work their area, etc...

I'm not trying to be harsh on realtors. It's just been my experiance as an investor. The more you can do for yourself the better off you'e going to be.

Thank you everyone for your responses. Here is the property update. I lowered the price, convinced my realtor to take zero commision, and sold it to a cash buy within a day of lowering the price. I'll take a 10K hit but I free up a lot of cash to reinvest. Lessons learned, condos suck unless you have a buy and hold strategy. I've done very well with everything I've flipped this year, but losing money just one property, even though it's small, is an eye opener.

I have a 2 Bed 2 Bath condo that I purchased at auction and intended to flip. However, the condo market is very soft, and it's way past my 45 day rule of ownership. I'm prepared to sell it at the low end of the marke pricet to just make it go away, even though it's now completely rehabed.

My question is would it be more attractive to sell it with renters or without renters? 16 like kind units in the same community have sold over the last 6 months ranging from 70 - 80K. I'll be selling at the 70K mark (maybe less), and have renters lined up at $895 per month. Just because you'll ask... HOA's are $240 per month.

My realtor said this property would easily sell for 100 to 110K, which is why I bought it, and is also why she's no longer my realtor. Well, that and several other reasons.

If renting it out makes it more attractive then I'll rent it out today, if not, I'll leave it vacant. Just want some advice on which is the better way to go with this property.

Originally posted by Jon Holdman:

But you're only paying 1% for the sale? 3% to the buyer side agent, but only 1% to the listing side, and yet you're wanting them to do CMAs (not just pull comps) and title searches on the fly? I'm not surprised you're having trouble getting enthusiasm.

Thank you Jon. I feel a few thousand dollars or more for 30 minutes of work is overly generous. That's about 4K per hour worked. Title search is handled by another company, which I use at closing. On the other hand, the buyers agent actually got out from behind their computer and sold something. Maybe they should get the other .05 on the transaction. I don't know anyone in CA paying more than 2.5% to listing or selling agents, and that's considered high around here.

Originally posted by Steve Babiak:

Originally posted by R DeMeritt:

... When I buy these properties at trustee sales, she's always 25K+++ short on what the real comps are.

...

Maybe you should just ask for ALL the "solds" in the last six months (or whenever), all the "pendings", and all the "actives" - then YOU figure out which make sense as comps.

Thank you Steve. I don't have time for any of that. While I'm sitting on the court house steps getting ready to bid, a lot has to happen in the background i.e. title search, comps, etc... My realtor feeds me the comps and title results before I bid. Hence the need for a solid agent that understands they'll be selling the property after I purchase and rehab, so be up front about comps.

Any suggestions on finding a realtor that acually works for a living? I'm a private investor that pays cash for properties, rehab, and flip right away. I've bought and sold several properties this year. The first five did well, the sixth broke even, the seventh will lose money for sure, the 8th...I'm not sure yet. When I buy these properties at trustee sales, she's always 25K+++ short on what the real comps are.

In short... my realtor has lost direction and is now losing money on my behalf. It's time to pull the rip cord.

Maybe someone has input on a good way to find a SOLID realtor that isn't afraid to work. One that networks with buyers, investors, etc...

I pay 4% to my realtor if they make the sale.

OR

I pay 1% to my realtor and 3% to realtor that actualy sold the property.

OR

I pay 1% to my realtor when I sell my own property. Should probably be more like .05% !

I'll buy and sell around 12 properties per year.

Looks like you did a great job, but did you to to much? It's been my experiance that no matter how much you spend on a rehab project, the property is only going to sell for what the comps can support. I've had several properties where I wanted to use wood floors, granite, other upgrades etc... but at the end of the day my realtor talks me out of it because I wont recover the rehab portion of the investment. Could you have completed this rehab for 20K instead of 48K and put another 28K into your pocket? I don't know...just asking the question. I also quit using general contractors for rehabs and reduced my costs to 50/50 labor/materials and am saving at least 30% per job, and sometimes 50% by hiring skilled labor for $15 per hour. Sounds crazy, but there are A LOT of unemployed skilled carpenters, tile installers, carpet installers, etc...Many with a legit verifiable general contractors licence. I just completed a 3 bedroom house that we gutted everything out of. It's was an empty shell. $8500 later it's the nicest house in the neighborhood, and I did it for 12K less than everyone (contractors) said it could be done for, and we didn't cut corners.

So I guess I'm just currious to know...could you have reduced your rehab portion of the investment without reducing what your expectations are for resale price?

Thank you Bryan and you're right. I received a call from the police department yesterday after posting a 24 hour notice to enter the property. The police said that I can't change locks even though I'm giving the tenant a set of keys. In fact, I can't enter the property for any reason at all, ever, until the squatters move out. I told the police I have no names of anyone living at the house and asked if they could assist. The answer was no....they can't.

The tenants can do anything they want including trash the house, steal the appliances, tear down walls....whatever... and I have absolutely no recourse, nor am I allowed to know who they are.

This is a FEDERAL law, which the President signed in May of 2009.

In California all someone needs to do is verbally say they're a tenant in order to be one. Once they say those words a landlord has no recourse other than to go through a 90 day eviction process. A squatter has the same rights as a paying tenant, so I can't just change the locks and toss them out until after the 90 days has passed, and even then on the 90'th day is when the eviction process starts, which will take at least another 30 days to complete.

I checked their mailbox yesterday but it's a locking box and I don't have the key. They wouldn't answer the door, so I posted notices on the front door, which they took down within 20 mins.

I'm meeting the sheriffs department at the house today so I can change the locks, but yes I still have to give them the new keys.

Thank you Jon. My lawyer said to call him back 90 days after the original notice was posted on the door, and mailed certified delivery. Other than that, he had no answers.