All Forum Posts by: Jeremiah Maughan

On the buyer side - Representing buyers takes a LOT of work compared to sellers, so I'm always at 3% BAC.  I've never had one of my investor clients ask me to reduce my commission when we are out hunting.  The only times I've done a deal for less is when an investor I know comes across a deal on their own and they ask me to transact it.  In that case, since I didn't have to do the work finding the deal, I'm always willing to drop to 2% or even 1%, depending on what is needed.  My repeat clients do not get discounts on the buyer side--they repeat because they feel they continue to get 3% and more of value (plus the aforementioned work).

On the seller side - This depends on the market. In an easy market like this, I often discount my listing side fee. When I had a client liquidate a portfolio of a dozen townhouses, I did it for 1.5% each on the listing side.  During the recession, I was 3% all the time, sometimes 4%, since I had to deal with banks and short sales.  I still try to always keep the commission offered to a buyers agent at 3% though, for the workload reasons.

So add those two up and you'll get the total listing fee.

Looking forward to another meeting with you all Wednesday. We're hosting through Google Meet again. Just ask to join when you go to the link: Google Meet

We will discuss a few of Mardi's "26 Ways to Evaluate an Out of State Investment Property" focusing on identifying the state. Then we will discuss how covid-19 impacts these key points.

Jeremiah

Where to begin...

In my opinion, there are two types of new agents:  1. Those who do it part time and work their current job full time until they replace enough of their income consistently to quit their "day job", and 2. Those who quit their full time job cold turkey and go full on into real estate.  Pros and cons to both.

With all love and respect, part time agents are what gives our profession a bad name and why low cost fee based brokerages are getting traction with things like "why pay 6% to sell your home when you can have our guy push paper for $1,500?".  Part timers aren't in the game enough to know when the market is shifting, they haven't seen enough to know how to deal with issues, they don't understand all the forms, etc etc.  So the goal should be to get full time as fast as possible by dedicating their evenings and weekends to their skills and prospecting.  Kind of like having a full time job while doing full time college.

That means you really have to decide if you're passionate enough about real estate to make it an actual job, or if you'll just keep it a hobby. It's fine if you keep it a hobby, but frankly, it's a disservice to clients to have the JV team representing them. So for hobby agents, it's best that they just do deals for themselves and keep tabs on the market. That being said, you can be a good part time agent if you are still doing enough deals that you're equal to an average full timer, or if you're keeping yourself constantly educated so you don't sound like an amateur.

As to picking a brokerage they come in two major types: full service and transaction fee based.  Usually you get more with a full service but obviously pay more.  Transaction fee based are good for part timers who just do the one off deal or for high motivated full timers who like to do things their way.  Full service usually holds your hand through the process of becoming a pro.  A shop like Keller Williams prefers you quit cold turkey, go full time, and utilize the heck out of their training and tools to get going as fast as possible.  My brokerage, which is also full service but is built around property management so we don't have quite the systems KW has, tends to work well for part timers who still treat it like a job and try to get trained up as quickly as is reasonable.

With full service brokerages they come in a few types, one is large commission splits (like you get 50% to 80% of the commission) and the other is desk fees (you pay $1,000/mo to be there but keep nearly all your commission).  I'm a fan of Keller Williams and some of the C21 franchisees for the full splits, Remax for the desk fee, and then RealtyPath, Equity, or Presidio for the transaction fee (there are a lot of the Tx fee popping up so who knows on that).  And if you want to get into property management or investment property, then obviously I think Vision Real Estate is pretty great.

There's a lot more to this but hopefully that gets you started.

Sorry for the late post everyone!  The adventures of Covid19 has made property management a bit exciting lately. We're still planning on getting together via Google Meet. Just use the link.  We'll be addressing some new lending updates from a recent training, the state of rentals in the current pandemic, and a few other items of interest.  See you soon!

NOTE: This is ONLINE. I didn't pick the online option b/c I wanted to make sure we kept it to our local happenings and I wasn't quite sure how to do that. https://meet.google.com/fwd-tmbt-ovd is the Google Meet link.

We're still hammering out the details but go ahead and schedule your calendar for our monthly meeting, the first Wednesday of every month!  We've got some topics pending like "26 Indicators of Where to Buy Investment Real Estate" and of course we'll probably tell some recession war stories.

If you're looking for up in Cache Valley and Logan specifically, Kent Field owns about a dozen properties and manages about three dozen last I checked. I'll PM his info to you since we can't post it in forum.

Sorry for the late notice!  We ARE planning to have our meeting tomorrow (1st Wednesday of the month).  We have a couple guest speakers lined up who will talk about making money in real estate and calculating returns.  Come and learn, come and share. Thanks!

Hi Brent, yes we're still hosting these pretty regularly when we have a topic.  Still figuring out this month since I've been out of town.  If you want to direct message me I can add your email address to our mailing list of reminders for these events.

Here's a list of a few things that I'm aware of from my participation with the Utah Apartment Association's various economic conferences:

Utah is a very stable place to invest because
-Utah has a highly educated workforce
-Utah has very reasonable tenant/landlord laws
-Utah has a significant population increase from both net in-migration and internal birthrate
-Utah has a seen a significant increase in quality jobs, unemployment is extremely low
-Cost to acquire property is still affordable compared to other areas that are also seeing significant economic progress

As for the cities:
-The Provo/Orem area is a bit harder on landlords, but has two large universities, nearly 80,000 college students total, only five miles from each other.  Lots of entrepreneurship also.
-Ogden remains pretty affordable, close to a military base.
-Salt Lake is becoming more diverse and seeing a lot of investment as companies leave California

Downsides:
-Appreciation has greatly outpaced rental rates
-We're hitting an affordability gap (While we have great jobs, those high paid employees tend to buy. Renters still tend to have low paying jobs. The high paying jobs, with all their purchasing, are driving up the cost to acquire investment property).

We've had several people who are pretty new and wanting to talk more about what it takes to get their first property. So we'll review some general concepts as a group about preparing for home buying and discuss specific people's situations (if you're comfortable sharing yours, feel free to volunteer!).