All Forum Posts by: Matt Schelberg

The power of BP. Talked to the agent. Fee is waived and relationship preserved with a few dings, but hopefully more respect...if I choose to continue it on future deals.

Thank you all for the quick replies. That was my initial reaction, but I didn't want to give myself a bad reputation as a nit-picking "sea-lawyer" that future agents would spurn. With your advice I am more likely to be perceived as defending against this practice, and I will avoid gaining a reputation as a "fish", to borrow from a poker analogy.

Many thanks.

Rick, I agree with you 90%, and especially when it comes to risk with tech vs. real estate. But I think we have to consider the entire market cycle. Right now it is relatively safe, but eventually it will be risky when the prices aren't supported by the fundamentals. Flipping in that environment would be incredibly risky. But there are strategies that can survive a full market cycle, and buy and hold is definitely up there, given that you have a good entry point.

I think you are right on the money with your plan to transition to rentals eventually. I remember a good concept from episode 1 of the BP podcast: flipping FUNDS your real estate business. You cannot count on it always being there, because eventually the fundamentals won't support it.

Also, there is definitely an upper growth limitation on a flipping business. The limitations are time and opportunities to deploy capital. Eventually you will be limited in the number of deals you do each month. But hey, we should be so lucky to have that problem, right?

A question for foreclosure buyers from a novice: how common is it for a buyer's agent to charge the buyer a flat "office admin fee" for a foreclosure that closes? (fee is in addition to 3% commission). Purchase price is 64k.

Background: I first met the buyers agent several months ago when he was a listing agent for a HUD property. Did not buy that property, but I liked the agent and so called him recently when I found a HUD home I wanted to bid on. I asked if he wanted to represent me for this one, and he agreed. We saw the property together and submitted a bid on the same day. (He has not been working for me previously or sending listings). He did not provide me with a copy of the buyers representation agreement prior to submitting the bid, and I did not think to ask for the paper copy. When we discussed commission verbally he only mentioned the standard 3% commission paid by the seller. The bid was accepted and then he provided me with a copy of the representation agreement, asking me to sign. It includes a flat $200 "office admin fee" to be paid by the buyer at closing.

1) Is this standard?
2) If not, how do you recommend I handle it now that the bid has been accepted?

Lesson learned on this one. Identify the commission structure in advance and on paper.

Thanks,
Matt

Greetings, BP! I am a long-time lurker from Baltimore, MD and a novice buy and hold investor. I recently bought a foreclosure and plan to live there for a year before converting it to a rental. I was previously 100% in stocks, but am now seeking to diversify while money is cheap and inflation is looking more and more likely.

While driving coast to coast and back last month I had a chance to listen to just about every BP interview on youtube. It was motivation to finally pull the trigger when a good deal came along after months of analysis paralysis.

So I extend a long overdue thanks to the BP community for all of your help over the months. Cheers!

Matt