All Forum Posts by: Jeff Terry

So taking a 1,000 foot view from what you have described, and being a Realtor myself, it sounds like they are trying not to get themselves into trouble. Technically as a real estate agent, we are not supposed to give you advice outside of our expertise which is real estate sales. For instance I have over 130 doors, most of which needed full rehabs so I am very familiar with renovation costs. However I'm not a licensed contractor so am not an expert in that field. To give an example of how this could be a problem. I know a foundation issue could be fixed for 5-10k with a repair, and I tell you that it isn't that big of an issue and what I think it should cost, and then you hire a foundation guy who will only rebuild the whole wall which now costs 30k you could turn around and sue me. What an experienced agent should do is say "in the experience I have had this has what I've paid to correct the issue, however you need to speak with a proffesional in the field", and then I would give you the phone number for said proffessional.

 Hey Jeff, I am mobile and haven't had time to read through all the posts so excuse me if that has already been stated. 

Agents have to abide by Fair Housing laws so are not allowed to answer the question "is this safe". Some may but technically they aren't supposed to. They will direct you to crime maps and data sources for your own research. DM and I will be happy to give you some insight into the different areas though (I am not agent). 

For your 2nd question, "what is the rehab cost". Well, that is a toughy for anyone but especially agents. No offense to agents at all, there are some excellent agents out there but I have found most know little to nothing about the nuts and bolts of houses much less the cost to fix them. They're sales people. To be fair, what needs to be done or will be done isn't always 100% objective either. I am a GC, you could send me and another GC into a property  and we could come up with wildly different #'s if we're not on the same page on what the end goal is. Even if we were it still could be wildly off from eachothers #'s.

My wife is an agent. She rarely takes on buyers as she mostly uses her license to support our real estate business but she knows the game from both angles of retail and investment. If you're looking for referrals on a good agent(s) to interview I can connect you two, she knows some excellent agents in town she could introduce you to that work both retail and investors, just DM if you want. 

I happen to be a Realtor as well as an Investor. We (Realtors) have to be careful with the "Is this a good neighborhood" question because of Fair Housing laws. When I get that question from prospective buyers, I always offer resources to where they can get the information that their seeking i.e. police/crime report. We cannot say things like "this is a bad crime infested area" or "personally I wouldn't buy here because...." One of the reasons for this is any response (positive or negative) could be subjective based on personal experiences. Since everyone's experiences are different, what one person my perceive as "great", another my perceive as terrible. 

As it relates to rehab estimates, while there are agents who have a rehabbing background, that's not the case with most agents, nor is it part of a Realtor's area of responsibility. Of course it's helpful but should not be expected. 

Exactly..  for rental areas one should be talking to a PM not a retail agent. also no way can you expect a retail agent to give you rehab numbers that totally not appropriate for you to ask or them to answer

@Jeff Terry

I just became an agent last year in addition to purchasing investments. When i have a client i put together the list of homes to show based on what the client wants/needs. These homes go onto a spreadsheet where i give the client a rough estimate of the mortgage payment, the homes condition, and my estimate of what a reasonable rent price would be.

If the agent doesn’t know anything about investing and wont even give you rough estimates, please move on to an agent who knows better. In one of your initial conversations with them, tell them what you want him/her to do and as long as its reasonable you are not asking for a lot.

Happy Housing,

-Matt

Financial analysis to determine whether or not a property would make a good rental...and estimating rehab costs are both specific skills that few agents would have or need to have.  Selling property does not require the same skills and investing in property.  I recommend networking to find agents who specialize in rental properties (and, even then, you will need to be skilled in both of those tasks).

Lots of agents are simply door openers - they will try and sell you on intangibles (i.e. "forever home" talk). Some, perhaps too few, agents are true professionals who know markets intimately and know about all facets of the real estate business. 

Choose your agent wisely! 

It's all about liability. As licensed agents we are held to a higher standard.  We aren't allowed to tell you about the safety of the neighborhood, if it's a good area, etc. We can however refer people to Megans Law (Is that just CA?) for child predators, advise that you look at safety maps, etc. As for if it's a good rental area, we can say there are a lot of rentals in an area. As to the potential for income, there's too many variables to give someone advise, not knowing how they manage units, amenities, upgrades they'll make, etc. As for costs to rehab, same thing. If you want real numbers, get a bid from a licensed contractor, based on the price of materials.  If you're looking at a property, do your due diligence, and don't expect the Realtor to do it for you. Realtors can show you properties, give you comps on other properties that have sold in the area or are on the market.  They cannot tell you the value of a home, only an appraiser can do that, agents can give "opinions". 

@Jeff Terry - Realtors are not allowed to answer either of your questions - the 1st is a violation of Fair Housing Law and the 2nd is a legal problem in that it is considered giving investment advice. I suggest you reach out to any of several good investor/Realtors in East TN who are also involved with local investment groups - @Derek Tellier and Whitney Nicely for example. They can introduce you to other local investors and show you where they are investing.