All Forum Posts by: George Azita

Seeing the physical property is only a small part of what you need to see and properties always look nicer in pictures and videos than they do when seeing in person. I think what is more important than seeing the property is you need to see the neighborhood, adjacent properties and the quality of potential tenants, or even the quality of potential buyers for when you want to sell the property.

In regards to the many post saying you need a good real estate agent who will make videos and watch your back, I don't believe many (if any) of those agents exist where you can find an agent who has the ability, the want and the expertise to do the math, do the mental processing and then do business that aligns with your agenda. I am not saying that agents are bad. I am saying that when you are analyzing investments that can make you profits, or put you into bankruptcy, you will be a very lucky investor if you can find an agent or broker who will do that much work for you and one who also has the necessary qualifications and abilities. Wouldn't it be great if every investor only needed a good agent or broker. In that case, every investor could be a passive investor and we would only need a good team working for us.

I personally went to look at properties in distant cities and states like Idaho, Arizona, Ohio, Massachusetts, Florida, California, Oregon, Texas and while real estate agents and brokers always claimed the properties were goldmines the properties were almost always undesirable. You have to realize that the seller's agents do not represent you and your buyer's agent has an agenda to sell you every and any property on the market as long as you are willing to buy every and any property that is for sale. No sane buyer's agent will tell you that a property you are willing to buy is not a good match for you.

 I've been in the real estate investing more than 50 years and I still deal with real estate agents and brokers every day. There are some great agents and brokers, but finding one is an exception and with properties selling so fast in today's market I find that agents and brokers are under a lot more stress and try to push properties onto buyers much more aggressively because they know they need to get you to act as fast as a lightning bolt because some other agent will beat them to the sale. So, you need to ask yourself how much time and effort is your agent or broker going to utilize for you if they know the property will be on the market only a few days. Why would an agent need to spend a lot of time worrying about what you want when there is an abundance of savvy and willing buyers near their office. Why would you think you are a smarter buyer that the buyers local to the properties for sale. Why!!! Because they've already seen the property and they know the areas much better than you and they know enough to steer clear of the bad properties and that leaves the properties nobody wants to buy for you.

I wish it was just as simple as finding a good agent or broker. I crunch the numbers for every property, first. Then, if I am interested I will drive or fly to the area and look at 5 to 20 properties. Usually, I find I don't like the neighborhoods and I find the properties are over-priced because they need too much work, the rents are too low, the management costs are too high and the prospective tenants are not the type people I want to work with. Then, you have to do your research in regards to local tenant laws and how long it takes the court to get the tenant from hell out of your rental unit. In many of the states with cold weather I find it can take 9 months to a year to get a tenant locked out and I've had tenants in Massachusetts where it took more than a year of going to court to get some tenants locked out. Las Vegas has been the best area and I've had the court get tenants out in less than 10 days, but not always. In California, I've had most tenants locked out in exactly 7 weeks and my total loss is usually about $8,000 to $9,000 and what it takes to get tenants out is something that needs serious consideration.

Be aware that when buying properties out of your area there are many inherent risks and additional expenses that can put you into bankruptcy. You need to pay a big chunk of your rental income to a management company and when you are not hands-on with day-to-day management and when you cannot personally do periodic inspections a high percent of your potential income will be lost and I can write a book about the cons for long distant investing. I did long-term investing and made millions, but hindsight is 20/20 and when I look back even though I made millions I also lost millions because after crunching the numbers I would have made many more millions had I not invested out-of-my-area and had invested my money in my own neighborhood.

Properties look like they are less-expensive in other areas, but there are usually reasons to stay away from them i.e. rental income is too low, appreciation is too slow, taxes are too high, or the area is the Eviction Capital of The World. Just a little food for thought!

 
Sorry to have to say that virtually every real estate agent and broker gets into the real estate business with only two things in their thinking and training; 1) to sell real estate and 2) to earn what they assume will be great commissions. This does not mean that real estate agents and brokers are bad people. It only means their training and mindset is for selling and commissions. There are some great agents and brokers, but very few and a buyer is only lucky when he runs into one. It is not the norm for a buyer to run into an agent or broker who the wisdom, expertise and the 'want' to be a good match for a buyer.

I deal with agents and brokers every day and when speaking with them I know for a fact that even brokers who made several hundred thousands dollars from my purchases still send me crap properties for sale, every day, and these brokers know for a fact the properties are crap before they send them to me.

My shrink always told me that I am an idealist, buy we don't live in an ideal world. In an ideal world your statement about my being ludicrous would be true. In an ideal world every agent and broker would have an agenda that aligns with their buyers. The good agents and brokers are an exception and rare.

The information in this post is what I was going to express. I always believe that mastering the financing, the math and the ability to crunch the numbers to analyze properties is the most-critical factor and something few brokers and investors have mastered.

One thing you need to realize is that neither the seller's agent nor your buyer's agent represents you because both have their own personal agenda to sell every and any property you are interested in and willing to purchase. No sane buyer's agent will tell you that any property you are willing to purchase is a bad deal for you.

So, who really represents you? Nobody! Only you represent yourself. You should not trust advice and opinions from friends and relatives, accountants, attorneys, nor financial advisors (whoever they are). There are so many factors that can make a purchase a nightmare I would never purchase a property without physically visiting the property and not without crunching the numbers, myself. It is difficult to earn money to bank some cash and very simple to lose money, even with real estate investments.

I look for properties every day, crunch the numbers and have not found a property with good numbers for the past three years. Of course, everyone has a different opinion in regards to what good numbers are.

I started purchasing apartment buildings in 2001 when units were $67,000. For the past few years, those same units have been selling for $300k to $350k. About 7 years ago, I purchase 11 units for $125k each and as far as profit goes the property has been more of a dog and a burden. Last year, I purchase 6 units for $291k each and the profits as so low it is no longer any fun nor rewarding to invest in real estate.

As far as your looking out of your area, you will find that properties are often less-expensive, but the rents are usually too low and the appreciation is near zero. The big money is earned from appreciation and investing for cashflow from rental income barely keeps up with inflation and major repairs can put you in the hole. When investing out of your area you inherit additional expenses and problems that can cause you to break even or even lose money in today's market. 

I am keeping my money in a stock trading account so if the market crashes I will make tons of money like during the 2020 COVID crisis, or I will have the cash if a good property falls in my lap. I am always looking at live auctions for good deals, but it takes a massive amount of time to go to 40 or 50 auctions to get a good deal because almost every good property gets removed from the auction block only seconds before being auctioned, but there are some great deals.

When I go to live auctions I bid on the $1 million+ properties because the profit spread is always better than lower-priced properties. I went to the auction two years ago with $1 million in cash to bid on a property worth $2.4 million and did not get the property because it auctioned for $1,025,000 and I didn't bring enough cashier checks that day, but the best deals I ever got for the past 20+ years has always been from live auctions. Stay away from online auctions and do a lot of internet research to see why.

I tried SMS and never got one good lead. The only responses I got was people swearing. There are many software programs you can find on the internet where you connect a cell phone to your computer and your computer will send SMS through your phone. 

The best source I ever found is propertyradar.com if it covers your area. The website is so powerful I recommended it to experience real estate brokers and most of them subscribed to the website. I have been using propertyradar.com to search for multi-unit apartment buildings and the website has search filters for how much equity the owners have in the property. The website also has phone numbers and email addresses for many of the properties and you can easily export large batches of records to Excel.

Direct mail is time-consuming, expensive and the results are poor. I always find the best way to find multi-unit properties is by visiting real estate brokers and ask for pocket listings. I go to many websites like loopnet.com, Marcus & Millichap, Coldwell banker and ask to be put on their email list. Every once-in-a-while even the large brokers email a hot deal.

Currently, I developed a software program where I am creating a database for every apartment building owner in a 10-mile radius. My software automatically creates an analysis I send to owners that show them what their equity is if they sell and it creates an analysis showing how much profit they could earn if they sold, for example, their 10 unit property and used their equity to purchase 20 or 30 units. I sent out about 100 mail pieces and never received one response.

I think the problem with direct mail is most multi-unit owners are bombarded with buyers wanting to purchase their properties and it is my opinion that most multi-unit owners prefer to sell their properties through a professional real estate broker rather than taking a chance they will sell too cheap to someone sending them direct mail even when the direct mail pieces say the seller can avoid paying broker fees, etc..

Every once-in-a-while a multi-unit owner sells without a broker, but those sales seem to be rare and don't happen often enough and most of the time when I encounter one of those I had already spent my cash.'

Propertyradar.com also has many filters for properties that were for sale and the listings expired. I send direct mail pieces and call the owners on the phone. All you need to say is, "I see your property was on the market and was wondering if you are still interested in selling". Very simple and every property owner comes back with a polite and friendly answer.

Looks like you have many times more experiences than I have. I still go to the county and auction.com auctions, but am afraid to bid and end up with a nightmare. When auction.com had live auctions in 2008 to 2010 the auctioneer guaranteed the titles would be clean and free of liens and encumbrances, but today the auctioneers will not give any clue in regards to a clean title. I can't even get title companies to give me a heads up.