All Forum Posts by: Skyler Smith

@Connor Moulton A RE attorney would be helpful if you don't already have a contract you're using. The state approved contract impairs your ability to assign the contract you're using. I've got a link to the state approved contract in the "for sale by owner" section of my web site:

http://www.skylersmithrealtor.com/#!fsbo/cfel

Once you have the contract in place, I would close with a title company. Find an escrow & title agent that can repeat your business model back to you after you explain what you're doing, and have them tell you how they will handle closing. If they're able to answer your questions, they should be able to get the job done.

Believe it or not, not all loan officers are created equal. Some will deny things that really should work, and some will offer to do things that have no chance of working in underwriting. 

My understanding is that FHA requires a reason if you are going to move out of an owner occupied home into a small multi. They want to make sure you're not gaming the system. So, if you move into one unit, maybe it's a bigger unit - say that it's to accommodate a growing family.

If you have a career move or are moving across town to be closer to work, that should also be a good enough reason. Keep interviewing loan officers. You might be able to qualify for an FHA without using a straw buyer.

Hey Jahmar, welcome!

I'm an agent/investor (and investor friendly) and I deal in Northern Utah, I'm not exclusive to Weber County though. 

Welcome @Jacob Tucker!

You'll want to read just about everything you can get your hands on. Luckily, there has never been a better time to get educated in real estate, and there's more free material out there than ever before as well! 

You can get your first property for as low as 3.5% in some cases, provided you plan to live in it for at least a year and it's a 1-4 unit residential building. Get your credit score in order, get reading, once you start investing you'll carve out a great future for yourself in real estate.

@Natasha M. 

They haven't offered you a referral fee because (at least in my area) it's illegal to pay an unlicensed individual a real estate commission. 

I think that 25% is perfectly fair and reasonable to ask. If you've got four separate agents you're working with, it might be worth letting them tell you what they would pay for a referral. Go with whoever will pay the most, provided you think they're able to close. Many agents get jaded with referrals because the referred agent will often let the leads go cold. Depending on how ready the prospect is, 50% is not unreasonable for a well qualified lead, especially if the referred agent is in your brokerage.

Just to recap, that's 25-50% of a 2-3% commission on the gross sale price of the home.

I use Bob with S&S Quality Home Inspections. I can get you his number, not sure if they have a web site. He's been helping me in Davis County, but I'll bet he could come up to Ogden. 

What type of commercial agent do you need? I do commercial/residential multifamily properties and could help you pull comps, etc. 

To me one of the greatest reasons to get a license as an investor is the ability to refer clients for a referral fee. How many wholesalers and flippers just throw away potential leads because a person wants to list their home? I see no point in spending all that money on marketing if you can't monetize such a large portion of your call backs. A full time wholesaler wouldn't even have to do any retail deals, but they could make some decent income just by referring buyers and sellers out to other agents!

As a Realtor and investor, I am also able to evaluate any deal that comes across my desk, which I think is a huge advantage. Being an agent helps establish myself as an expert in the field, adds validity when talking with leads, and exposes me to a lot more deals than I would normally see if I were working a job. My vote is: get licensed!

@Spencer Keables 

Plan to pay between 7-10% of gross rents to a management company. There will be additional fees, depending on the company. Cleaning fees, quarterly inspections, placement fees, and others are all possible. Aside from giving out my number at the drop of a hat, the company I hired was quite capable, even though the relationship only lasted a few months. If you end up getting a property in a market like Logan or Cedar where the 1% rule is easier to get, you'll probably want to get property management. If you invest in Ogden or another market where the 2% rule is much more common, I would highly encourage it. Be sure that if you elect to not have in house management, you don't get "outhouse" management! 

http://www.biggerpockets.com/renewsblog/2015/05/07...

Property management is a big deal and necessary for investors to really think about. When I started, I was pretty much shooting from the hip (I did read The ABC's of Property Management, also by Ken McElroy) and just learning as I went. It was stressful and I was working 50 hours at my other job, so I wasn't able to dedicate much time to it. I had rented from this property management company before, so they were my first choice. I was in over my head, and they helped get a tenant out that I was having trouble with. After I sold the subject property I decided to take over management of my other units and still manage my own properties now. The systems I've created for myself are very effective, and once I have enough units that I can't handle it all I'll hire someone and keep the management in house. As I continue to refine my internal systems and outsource things like grounds maintenance, it gets me closer to a turnkey operation that I can delegate to an employee.

I really liked the part of this thread where we were cold calling landlords, we should get back to that!

On one hand, we need to acknowledge that it's not always ideal to invest where you live. That said, there is still tremendous opportunity in all of Utah's markets. You seem like young guys, and I imagine you're in this for the long haul. Think about why you want a 1% property. You want a return on your investment, right? Well one way to get that same rate of return is through flipping. Or wholesaling. There are what I would consider a lot of REO properties sitting on the market in Utah right now, and they're the type of property that you could resell for a 12% return (1% monthly, like we're looking for.) I concede that you're not going to be able to pick up 1% deals off of the MLS very easily, but that doesn't mean we have to give up and start buying illegal rental properties either.

Also, let's not be romantic about living in our investments. I invest where the numbers make sense, sometimes that's been in my rentals, others it's been in my own house. I had one experience where I hired a local property management company because I was frustrated with the tenants in my other units knowing that I was the landlord and I was living right next door. The management company knew about this, but it didn't take more than just a few weeks until the company started answering tenants questions with "I don't know, why don't you ask the owner?" And straight up giving the tenant my number. Not enjoyable! It made me feel very unprofessional. Sometimes it's nice to have that separation.

Thanks for the input you guys! @Linda Weygant the tenant's rent check question is really what pushed me to go the professional route. 

Here's what I ended up doing: 

From @Aaron Montague 's suggestion I created an LLC to run my Realty and investing commissions through, and an LLC for each property that are just Skyler Holdings One, Skyler Holdings Two, etc.

I opted out of naming the LLC's the property addresses from a suggestion my CPA gave me, he said if I didn't have them property specific I could let the LLC's sell the properties off when the time comes and move new units into old LLCs to save headaches & confusion down the road.

Thanks again guys!