All Forum Posts by: Account Closed

Looking for some guidance on a tough one I'm in.

I've been a Virginia real estate agent since 2017. I've had a great rapport with my broker - he's been a solid guy and a good teacher. The brokerage has two entities:  one for conventional full-time agents; the other for referral agents. Having a license under either entity allows one to maintain an active license.

My license has been under the referral entity as I have a separate W2 and having the license under a referral entity has allowed me to maintain my license at a low cost. I have been actively engaged (important distinction!) and have produced a large number of referrals.

Recently, I've been interested in becoming a full broker with a focus on investment properties and property management (I own and self-manage 12 properties). I took the courses, passed my exam on the first try and approached my broker about signing my experience verification form required for a Virginia broker application. He said, "Absolutely not. I would only do this if you switched to full time agent and gave it another 3 years under the other entity." If anyone knows the story of Laban and Jacob in the Bible (Genesis), this lands pretty close to it.

I respect my broker's right to his opinion, but this does feel slightly coercive and has halted my career plans. I'm at his mercy. I've made an appeal to the regulatory department in Virginia that oversees agent/broker licensing (DPOR), but they will only defer to the decision of the broker.

Any suggestions on how to move forward here? Any Virginia brokers out there willing to take on a good, ethical guy short term in order to sign off on my experience verification. Happy to discuss further directly or give further detail. Thanks! - Jonny

Helpful - thanks so much

Thanks @Dave Skow - the lender is totally on board for it. It’s a typical blanket loan - but this is unique in the each property has a different seller (not adjacent). It’s the closing attorney (the seller’s agent’s choice) that is presenting the barriers.
 

So I'm under contract for two different properties that each have separate sellers (both parties unrelated completely). Since one property falls below conventional loan minimums (75k is usually what I see as a min) and also to save on closing costs, I worked it out with a lender to do a blanket loan:  one mortgage covering the two properties. He was totally fine with it and I swear I've heard others do likewise.

We're now a week from closing and the closing attorney is saying "Hold up! It has to be two different loans".  I was surprised so I kept asking why - this seems completely feasible.  His reservation is on the recording part:  he said that putting the same mortgage down for both "causes issues".  The attorney did acknowledge that this can be done but his reservation is that this "causes issues" (I am still ascertaining what those issues are).  Anyone else run in to "issues" like this? I'm trying to figure out if these "issues" are more inconveniences this creates for him versus actual problems that create a hazard or liability regarding title. Would welcome any feedback. Thanks!

I agree with @Chris Seveney. While we should always be concerned about bad ideas prevailing due to them being en vogue, I don't think this has the legs to stand in Virginia. This is a very divided state county-by-county and the way one county votes one election may swing strongly the opposite direction during another election. Virginia has some of the most pro-landlord policies in the US - it would take A LOT for this to come into effect. Not impossible, but not probable.

Townhome is my pick. I don’t do much with condos but it seems like there’s way more out of your control as an investor with a condo. Also, some condo buildings go up a few levels and were built in the 1940s. They often have plumbing issues - this is an issue in the  Fairlington community (Arlington) at least.

HOAs in the area are not conducive to a profitable investment strategy IMO - there's too much out of your control. I agree with others that DC multifam is the best bet toward steady CF sooner with solid appreciation. You may also look at SF's in the Fort Hunt area (think south Alexandria near Mt Vernon) - I see some very reasonable properties there that are getting decent rents - leveraging those at 70% LTV could be a means to achieving your goal. Please take these as mere ideas though - not actionable advice.

Also, you mention that your work has you constrained time-wise - this will be a factor to consider in regard to the type of housing.  Affordable MF housing in DC may require more of that elbow grease your mention earlier. 

PS - kudos to your ability to save so well, your high cash position can put you in a powerful ability to negotiate good deals right now

@Roy Gottesdiener - great question to ask. When considering an expensive market, it's helpful to focus on what makes that market so expensive. I think it's great when markets like Raleigh-Durham rise in value due to migration patterns and new development, but there are some other fundamental factors to consider as well. One of those factors is how limited new development is now and will likely be in the future. I'm sure @Russell Brazil can speak more authoritatively on this, but one of the compelling aspects about the DC market is that there is a strict physical limit as to what can be built within DC proper - there are strict height restrictions in the District which limits multifamily development and within the 68.3 square miles of land within its borders, there is very little viable open land for new development. This sort of factor enhances the scarcity of properties which is what leads to their heightened values, desirability and, over time, appreciation in rents.

Average current 30yr mortgage rate: 6.5%
Latest CPI (Nov 22): 7.1%
Reality: you're getting a negative real rate of -0.6% on your mortgage 🤯

Seems best to make decisions now that are based on sound economic principles, prudent leverage (if used), and having substantial cash reserves. Making decisions that make sense today versus what can be expected in the future is a great place to start. Speculating over crash or no crash leads to decisions made on anticipation vs. present realities.