All Forum Posts by: Joe Young

Hi Dasha,

Very cool to see someone 16 years old on the BiggerPockets forum with an interest in professional life and investing time into their future rather than endlessly scrolling through social media videos!  Now that we've established I'm a curmudgeon, let's talk about Real Estate!

The biggest obstacle to overcome by far, is not so much that you need to find clients (although believe me, that's also difficult and is a constant effort until you're able to rely on referrals from past clients), but the customers you interact with need to trust you with their largest asset as a seller, and for one of the largest purchases they will make in their lives as a buyer.  The difficulty there for you and for them is mutual trust and confidence.  How can you expect someone to trust you with this enormous asset/purchase without having any experience?  That's where I think you nailed it.  The best thing you can do for yourself (and most brokerages may actually require this, I'm sure it varies by state), is to shadow another agent and put yourself in a position where you can learn as an assistant.  That way you can truly learn the business by observing others, and bring all of that knowledge with you to your first listing appointment or buyer meeting!  When it comes time to obtain your license, perhaps you will have a mentor for your first couple of deals that you can go to with all of your questions (my brokerage requires this for the first 3 transactions).  Someone who can work closely with you on your first few deals until you get going.  

This profession can be tough, especially when starting out for reasons mentioned above, but it is also extremely rewarding, fun, and allows you the freedom to live life the way that you want to live it rather than sitting in a cubicle being yelled at by 4 different bosses about a deadline.  

I worked in Management for 10 years out of college, and the last 2 years of my Management career I was working as a part time Realtor, building the foundation for my career before jumping in full time.  This was to ensure that I was able to supplement my income and allow for a smooth transition.  Although I wouldn't recommend a 10 year career professional to dive head first into Real Estate and quit their job on a whim, you're in a position where you have your entire life in front of you and likely have yet to incur debts that need to be paid and other real world expenses.  

If you happen to be in Illinois, I'd be happy to connect you with resources that can help start your journey.  If not, I'm sure there's an agent in here from every state who can help point you in the right direction!

I would coordinate with a Realtor and have them conduct a CMA to determine the home's market value, maybe even meet with a couple of agents so you can average their pricing opinions and have a reliable sale figure to work with. The agent's main goal is to get you to sign a listing agreement, but I wouldn't do that until you're sure you want to move forward. Just let them know you're interviewing a couple of agents and deciding if you want to move forward. After that, meet with a real estate attorney and have them conduct a seller's net sheet based on the recommended list price from the CMAs. Most agents will be able to provide you with a seller's net sheet (explains how much money you'll walk away with when everything is said and done), but in your situation I believe an attorney would be more knowledgeable about all of the fees involved in your unique situation and could provide more accurate figures. Some agents or attorneys may not want to volunteer their time without being sure they're going to get paid, but everyone wants your business and some will be willing to prove their value by offering some of their time to earn it.

When that's all done, you'll have a good idea of what the property will sell for and how much you'll walk away with.  At that point you can determine whether or not it makes sense for you to sell.

P.S. I also agree with what others have said, I would not sign up for rehab or renting unless you are willing to put in the time to educate yourself on what is truly involved in either or both of those.

When you are asked how many sqft are in one acre, just remember, 4 old ladies going 35 in a 60.

 Every lender is different and I am not a lender, so you'd have to speak to yours for clarity, but I am able to use 75% of the projected rental income on a property as reported earnings in order to qualify for a larger loan or another loan. 

Hey BP,

I have long been looking into Real Estate investing and even obtained my Real Estate license to help my wife and I on our investing journey.  I listen to the BP podcast regularly, analyze a couple of properties per week, and have saved up $100,000.  The only problem I seem to be having now is simply pulling the trigger.  This is mainly because I am unsure of what cap rate I should be looking to obtain, and how much monthly cash flow makes the deal worth it.   

Most of the properties I have analyzed are in B class areas, and I can't seem to reach a 10% cap rate no matter how many deals I analyze (I have previously been told that without a 10% cap rate I shouldn't close the deal, but I can only find that in C or D class areas), but I am seeing monthly cash flow on properties anywhere between $200 and $375 per month.  We were originally looking at condos, but HOAs have been destroying the deals, so we have now started analyzing single family homes between $180,000 and $250,000.  

My question is what cap rate are you willing to accept on a deal, and how much monthly cash flow gives you the green light?  Thank you for reading and I look forward to discussing.

I am under the impression that when people begin to settle down about covid, those who were waiting to list will then do so, causing a much higher supply in the market and driving prices down to some degree due to decreased competition.  The low interest rates have a lot more buyers in the market, but as a unique result of covid, not nearly the supply to fuel that demand which is causing prices to increase and homes to sell in under 24 hours.  

That being said, interest rates are still low and it's still a good time to buy.  You might pay a bit more, sure, but you can speculate about the future forever and you never really know what's going to happen.  Just my opinion.

I was almost waiting for the end to read, "you're much better off renting one of these 17 properties" which are all owned by the author.

A truly inspirational story, thanks for the read!

 I appreciate the insight Paul, that was my gut feeling as well.  Buildings are not available often in the area so I wanted to hear someone else's thoughts.  

That's correct, all information is provided by seller