All Forum Posts by: Joseph Beilke

@Kyle Hey

The short answer is yes and no.  I started by doing exactly what you talking about. My goals were little different but fundamentally the same, this is how it involved for me.  I work as a Firefighter and most firefighter have a side hustle.  I know I wanted to own more properties and supplement my retirement with cash flow.  I bought a home and afterward the agent that helped us took me under her wing and gave me down and dirty of the work on being a REALTOR.  She got sick and passed away a few years back so the short time I had with her was greatly valued.  I took my license and started to try to drum up business from my fellow firefighters.  My first listing was my Chief.  He gave me a shot as long as I worked with a seasoned agent in his area.  It worked out perfectly, I found an agent in another office from the same company and split the commission 50/50 from the sale.  

I was off and running. Over the next 6 years I got a far amount of business from my fellow firefighters until one figured out the Flat fee saved them some commission. Did he leave money on the table, yes. Would it have been more than my commission, NO. So yes he saved money. This become a tread in the dept and as hard as I tried the value I brought to the listing wasn't enough for some. In the last 3 Years I lost 3 listing to flat fee services. I spent more time reading books and learn about investing better. Also my wife quit her job and got licensed and her broker licenses. We partner up with 2 others and started our own brokerage in Aug of 2020. I found out that she's better with buyers and I am a numbers guys and started working with investors more. I took a little step back and focused my time learning more about multifamily and property management, and STR is next.

You're probably asking how is this relevant to your question. Getting my license provided me the opportunity to get into the know of the market. I learn that having a full time job and trying to build a real estate business was very hard to do at the same time, along with everything else in life. It took me 6 years to figure out how I fit in best and it was with investors. When ever I get a firehouse buyer or listing I hand it off to the wife. We bought another rental ourselves and used the buyers agent commission to cover our closing cost. We are working with a few investors currently looking for STR, Longterm and we have a few ground up builds going. Having my license helped my learn so much more about the business and it made people feel more comfortable talking to me about it.

If you just get your license for access to the MLS its not gonna be worth it. You need to be active in the industry and learn from others, do some deals for friends and family, get referrals. Use the commission to save money for the next investment for you. But you gotta learn business and understand the numbers.

But please do not become the agent that list a property for a friend, listed for $550K and gets $1500 a month rent. Then say "investor alert, Great ROI!" You will look like a fool and will be treated as one.

Good luck and if you wanna chat more please feel free to DM me.

@Carrie Taich

My brokerage in FL charges a lower upfront securing fee, and 10% per month starting on month (2). Then at each lease renewal there is a fee to renew the tenant for another 12 months.  The renewal fee is on top of month (13) 10% fee.  It keep profits coming into the company and pays for the time to do the paper work and inspections.    We also reduce our monthly percentage based on the number of units you have managed by us.  The lowest monthly fee you could potentially get is 7%.  

We do not due business in Chicago but maybe you could present your idea of a bundle price to a company looking to grow their property Portfolio.  You also have to remember, a lot of there PM also do residential real estate sales.  They want to turn tenants into buyers, and owners into sellers, and repeat business.

@John Smith

As some have said, you might be surprised what the rental rate is for your home.  You might be better off than you think.  I would try to contact a few different Property Managers and see what they think you could get for rent and then have them provide you with a net sheet after fees.  You can also depreciate the property and you might make up some lost it tax savings/refunds.  

If you do end up renting it, you could also have a lease with the tenants that makes them responsible to pay for repairs up to a dollar amount.  I have one property set at $150. Basically it's double the 75$ home warranty flat service fee.  

Here is a crazy curve ball I saw a few times happen after the 2008 crash.  Now of course you have to have a some what desirable property, but what a realtor did to get a home sold was partner up with a charity.  Then over the course of 6 months the charity and the realtor pushed the property as a raffle.  People bought tickets for 100$. The money was held in escrow and only once all the tickets were sold would there be a drawing.  The money raised paid off the principle of the house.  The winners paid all closing fees and taxes.  The realtor did not take a commission because of all the cross marketing to them and all ticket sale went through them so they got a ton of leads from the campaign.  The set amount of tickets sale also provide the charity with a check for $25K. 

I really wish I could remember the name of agent and brokerage that did this outside of Baltimore.  Maybe you could pull something like this off and help our some people or animals.  

@David Vanlandingham

Its been a long day, my wife says I'm a human map and never get lost,  I must have had major brain fart about UCF. Thanks for correcting me.  

Living about an hour from Orlando and going to it very often to visit family I will say Orlando is a special market. The greater Orlando area is very large. The city limits are really not that big at all.  I am going to assume that you mean the greater Orlando area. 

Next we need to talk about Disney, how close do you want your property to be?  You said long term is your strategy here, and there is a lot of growth, so a lot of people are moving to the area, so yes I agree your information is correct about a good place to buy a rental.  But the Mouse controls a lot on the south end of town so having an agent that knows the rules, the ins and out is very important if you plan to be near there.  West Orlando that is close to down town is mostly C neighborhoods and have probably the best prices in the area right now, but are close to sport complex.

North of down town is not heavy tourist but still busy and businesses are coming and going often in the area, they didn't close, they just moved. Such as the high end car dealers like Ferrari and McLaren.  They have moved south near Universal .  

The I-4 Eyesore is actually almost finished and might even have tenants soon. I-4 eyesore <----Clicky

West is UCF and older well established neighborhoods, do not know a hold lot about that area, but is it as closer to Sanford and the airport there is super easy to get in and out of.  Sanford has a cool downtown area, with famous German restaurant and handful of pubs and breweries.

If you have some more specific question DM and we can chat.  I have a good Realtor Referral in the area too.

I love love love looking the MLS and seeing agents list a property and they always say "great for investors, great cash flow, etc". But then you look at the details and they didn't list the current rent, or lease terms in place. Then they won't provide tenant history unless we come together on a deal only to find out that one tenant hasn't paid in months.

To be investor friendly, I think first and form most you need to understand the numbers and if a property is even an option for your buyers. Being able to know your market and do some quick math in your head or iPhone to get a rough idea if the asking price even makes sense. (YES I know we can always offer less) So many agents are clueless to how to figure out CoC ROI and do a basic pro forma report, but claim its a great deal is pretty sad and frustrating.

Baltimore City is one of the worst too evict in.  I have used http://www.tedmaherlaw.com when I needed to evict in Baltimore.  They have always been successful for me and friends.

@Derek Kirkman 

I think a HELOC is a great way to get into investment properties. But you have to check your numbers over and over again and have a payment exit strategy in place before you pull the trigger.

Make sure that CoC return on the Heloc investment is sound, with a backup plan. Have plenty of reserves and do not spend any of the cash flow profits until you have your Heloc paid back.

I'm not opposed to partners either.  50/50 is never a good idea, because the work or money invested is never equal.  Maybe an equity owner that is hands off my be a better option for you.  Read The Lifestyle Investor for some interesting and unique partnership structures.  The book is mostly for very large scale projects and properties but you can "Mini Me" them to work for you.

@Michael Nahm

Everyone here is in agreement.  No smokers!  You will spend a crazy amount of money on turn over and still may not get ride of the smell. I treat Cats owners and smokers the same.   If you end up with a smoker or a cat you will be stuck with those type tenants in the future too. Because they will be the only ones that can get past the smell. 

"Sorry you are not approved"
 

@Thomas Harris

The advice in this discussion has been awesome.  I do not like the idea of splitting the difference because no one actually gets what they want.  So how about a planned structured increase, this could be a win for all parties involved.  I did this with my tenants in Baltimore.  They have always been great and pay. But I needed to work on the property so I kept the rent low while I had some updates completed.  I showed them the numbers for market rent.  I even shared with them my increased cost such as taxes and insurance.  I proposed a plan that increased rent every 6 months till I got them up to market.  We agreed that over 18 months would be expectable and not too much of a hit to their budget.  They are now month to month and Increase it Feb of each year.  They write me 12 checks up front for the next 12 months at the new rent rate. The check are cashed the date its printed, which  is the first pay Friday of the month. Some times its 1st other its the 12th.  But never has one bounced, and yeah its pasted the late date, but I have had the checks in hand way in advance.  I work with them at that level and they don't complain about the increase.  Just an idea.