All Forum Posts by: Jonathan Greene

I'm sorry to say this all sounds bad. You don't have any idea how to assess investment properties, but you want to partner with two people who are giving you their money to assess investment properties for the potential profit. Sure, contractors can help, but they have a distinct stake in the game and are not experts in evaluating the investment. They can give you an idea on repairs, but you can't be the point person, with a fiduciary duty to your money people, if you don't know the metrics. You are setting yourself up for a mismanaged partnership.

What's your plan to find properties? If it's on-market only and you lack the requisite experience, what are you really bringing to the table for them in this deal?

No future buyer will buy your house later with a nondisclosed past sales price. You might as well tape a sign to the front that says "Shady Business." If you are paying too much or too little, that's just part of the deal. The fact that you are trying so hard to hide it should send up red flags all around you and the transaction.

It doesn't matter if it's not disclosed on the MLS anyway, anyone can find it online once it closes via tax records or a million other sources. Trying to withhold the sale price on your own buy seems very strange. Would you rather the next buyer know or wonder why the price is being hidden from them?

There are deals in every market, they just aren't on the market. If you don't know a market, neighborhood, and block very well why buy site unseen there? Have you ever direct mailed a confident list built on ListSource focused on who and what you want to buy in your area? Have you tried your own off-market mailings at all? When people say there are no deals in their area, it usually means they don't know anyone who can find them or they don't want to spend the money or time to find them. @Ryan Evans nailed it. If you are beating out locals, they are laughing.

In regard to the auction, what you are experiencing is common place. You win, you lose and need to re-bid. I have closed several deals for clients on Auction.com, Hubzu, but you have to be persistent and tough. When I bid for myself I just put in my bid and wait to get outbid. Getting outbid is usually a gift when you are at your top number or close. The process should go find once it's done as most of these auction sites are linked to the MLS and an agent so more rules apply. They will be slow, but not as slow as you would think. By the time they hit an auction site they could have been sitting a long time and the bank is ready to get rid of the asset.

@Chris Toedter send me a message. Part of what the agents are saying is true, but 99% of the agents don't understand investment at all. If you are looking to hold, it doesn't matter if they can get you more than asking because there is no asking. It's a hold. But if you want holds you can do much better by not overpaying and finding lower-tier properties that are walkable to trains that can be upgraded. This market is hot, but a lot of it is BS and when the crash comes it will weed out a lot of the investors and agents who don't know what they are doing.

I have mailers going out all over Essex Co and in 07013 in Clifton. We can discuss.

I can confirm what @Chris Toedter is saying about this market is accurate. I had a three-family listed in West Orange a couple years ago that got 19 bids. Most properties in the area, especially multi-family units, get 10+ bids if they are attractive, but the prices some of these people are paying won't continue to pan out. Chris, there are off-market options in the area and deals to found on the MLS surprisingly. The MLS deals that can work in this area when you are financing the deal are multi-family deals that were Under Contract, but fall out. Most old bidders forget about it and it can be a good time to swoop in.

My best advice for here is stop overbidding and giving away your rights. There are too many abandoned oil tanks in this area to risk waiving everything with a mortgage contingency. You just need to connect with people who can find you deals off-market.

What do you value the most - training or hands-off? A brokerage like Keller Williams that has a ton of in-office training and management available will often cost you more in your split and your monthly payments, but also give you more opportunities to find agents you can help with Open Houses, etc. If you want to do your own thing (very difficult for new agents who want to get business) you can look at high split agencies, but they don't have the same level of training and management usually, but there are exceptions to both rules.

I've worked for Keller Williams (70-30 split when I started, but newer agents can start 60-40), Berkshire Hathaway (70-30 negotiated, new agents start 50-50), Sotheby's (I was on a 90-10 because I had a team of 15 under me), and eXp, which I like the most, because they give me the most freedom (80-20 split and a low cap).

If you are new and want to learn and network and get opportunities for mentorship, the bigger box brokerages are better starting points in my opinion, but you will pay for it. Hope that helps.

You don't want to take the classes only to learn just to never take the test and not have an active license. You can just get the book for the real estate course in your state if you want to learn from a former student and forego the classes. But you should want to get your license, not to be an agent even though that works for me, but so you can see properties whenever you want that are on the market. As I am sure you already know, most agents don't understand investors so they don't know why we want to see 10 awful houses in 3 hours when they aren't getting a big commission on an REO buy-side. When you have your license you can see 10 houses at your pleasure and make your own offers for on-market properties without waiting for an agent.

I would say though that listing your properties is a specialty. I have seen way too many flippers with licenses list the property themselves, but not get professional photos and not provide the service to the agents that is necessary to generate multiple offers for a flip. The license is most useful as an investor for seeing as many on-market crap houses that you can before anyone else sees them.

As an investor my whole life, I've worked as an agent for Sotheby's, Keller Williams, Berkshire Hathway, and eXp currently for the second time. eXp is by far and away the easiest to work with as an investor agent. They don't hassle their agents and the fees are minimal. That's what you want from a brokerage and there are others that will do the same.

Makes sense @Taylor Kochenderfer, thanks for the extra info. If you go where population growth will increase steadily, the market will usually respond to that. A lot of the hot markets are past so I like to look at adjacent markets that haven't hit yet that border those better markets, but it is so state-dependent. Some people focus hard on the numbers, but if I were in your shoes I would be researching those up and coming towns that get featured as best small towns. A nice uptick usually comes a year or so after a small town in an affordable area gets a spotlight like that.

This question is like when Seth Rogen asks Aubrey Plaza in Funny People, "Do you like music?"

Do you have any other properties? Why are you looking for deals outside of where you live? If so, have you used Property Management before? How much cash flow do you want to net and how much do you have to spend?

You can create cash flow for yourself with multis anywhere if you have access to good deals, on-market or off-market. If you don't care about appreciation then you can surely find cash flow positive properties in your area that you can manage yourself.

The forums are extremely helpful here, but if you don't give more details you aren't going to get the answers you are really looking for.