All Forum Posts by: Miguel Del Mazo

Quote from @Drew Sygit:

@Miguel Del Mazo why would an agent agree to finance their commission?

For the same reasons why a seller would agree to finance the sale, I suppose. 
I'm making the mistake of trying to get into a seller's head. Make the offer, and if it works for them, great. If not, look for the next one. 

Thank you. I really appreciate the education. 

Thanks in advance for your help.

I think I've found a good potential, large MF deal that would work well with a seller financing strategy. The properties are in a great school zone in an area that continues to draw in new tenants, has a diverse job market and enjoys great weather. Even at current, well below market rents, the 50 doors would generate 14k a month after paying the seller for the mortgage which leaves a lot to hire a property management company and save for CapEx. The properties are fairly new and externally (haven't seen the inside) are in pretty good shape.

My question is, when I approach the seller, who is using an agent, how do we negotiate the agent's fees? A typical 3% would require several hundred thousand dollars to be paid at closing. Asking the seller to pay that would be customary, but normally they are the one receiving a lump sum at closing. The deal still works if I pay the agent and the agent is willing to loan their fee at the same rate and terms I would ask of the seller, but would any agent be willing to do that? 

Thanks again for your help. 

Quote from @Michele Velazquez:

Thank you!  And sure, I will take any recommendations you have.  I have 2 questions.  1) Are there parts of Buford that are less desirable than others?  One property I am looking at seems closer to the lake.  2) Are there high vacancy rates there?  TIA!

I just sent a connection request with some info. Vacancy rates are generally low in Buford. The school district is among the best in GA, and that is a huge draw for tenants. 

Quote from @Michele Velazquez:

Quote from @Miguel Del Mazo:

Welcome to Buford. I'm born and raised in Atlanta, but my wife and I are very happy that we've moved the family to Buford. There's a great sense of community based around the awesome public schools. 

Your willingness to make significant improvements in a property will really help you expand your potential deals. Most of the inventory of "paint and carpet" flips/BRRRRs have been picked clean all around Atlanta. There are still a number of properties that require more work (at a higher risk/reward) in the greater metro area. 

My wife and I are professionals who are starting our investment in buy and hold properties. Let me know when you go to your first GA Reia, and I'll make it a point to go too. It'd be nice to have 1 sort of familiar face. :) 

 I am looking at investing in Buford.  May I ask you a question about an area there?

 Sure. I'd be glad to help as I can. I also use a rock star, investor-friendly Realtor the lives in Buford. She helped us buy our home in Buford and she found our two properties in Gainesville, GA (which is where our buy box is). I'd be glad to put you in touch as she has more boots-on-ground info. 

BiggerPockets pro membership also comes with a rent-estimator as part of the tools section, deal analyzer.

I tend to look at Rentometer (Pro), BiggerPockets (Pro) and Zillow rents (free, but least accurate) to get a vibe of an area. Craigslist, if an option, will get you boots on ground information. 

Welcome to Buford. I'm born and raised in Atlanta, but my wife and I are very happy that we've moved the family to Buford. There's a great sense of community based around the awesome public schools. 

Your willingness to make significant improvements in a property will really help you expand your potential deals. Most of the inventory of "paint and carpet" flips/BRRRRs have been picked clean all around Atlanta. There are still a number of properties that require more work (at a higher risk/reward) in the greater metro area. 

My wife and I are professionals who are starting our investment in buy and hold properties. Let me know when you go to your first GA Reia, and I'll make it a point to go too. It'd be nice to have 1 sort of familiar face. :) 

Thanks for being a nurse. Best of luck with real estate investing. :) I absolutely agree with having a property manager. You've got other stuff that needs your attention. 

Gotcha. That's a different question. Should one buy at the top of the market? No.

How does one know where the top of the market is? Ahh, there's the rub.

Real estate, in general, does well over a long time horizon, but that does not mean that individual circumstances don't overcome the general. There are a lot of factors to consider. If the area you are buying in looks to at least maintain a good job base over the next 10 years (ie not reliant on a single big employer or industry), then the population (and rents) should be stable. Obviously, growth of both jobs and population is preferable. If the value of the property you buy goes down on paper, will that affect your day to day finances and plans? If so, being more cautious is appropriate. 

Let's look at ways RE can make you money. 1. Rent. You predict this will continue. 2. Paying down of debt by your tenant. This should happen if you manage tenants well. 3. Appreciation (forced or "natural") this you aren't expecting as you're paying market price and not getting a fixer upper. 4. Tax benefits. No reason why you shouldn't get those. 

So assuming you are investing in an area with decent long term reasons for people to live there and you manage the property well, you'll probably get to enjoy 3 of the 4 main reasons to invest in a rental. 

Would it be better to buy a fixer upper in the next great location during a buyer's market and do a spectacular (and cost-efficient) renovation? Yup, but waiting for that deal may take the better part of your life. 

If the long term numbers make sense and you're left with a cash-flowing rental (real cash flow.... Include expenses!), give it a go. Hitting a single or a double is great. They don't all have to be home runs. 

I did a 4 year stint in Baltimore for college, so thanks for stirring up some old, pleasant memories.

I definitely don't have any specifics to add regarding neighborhoods, knob and rune wiring, etc, but I will say this: only look forward when it comes to investments. Allowing yesterday's losses to determine today's action is a classic "sunken cost fallacy". You aren't getting back what you've already spent, *but* if going forward at this point makes sense, then proceed. 

In other words: if you could have this property for this mortgage with the expected costs coming down the pike with the expected rents and vacancies (and tenants), would you accept the deal. Forget about how you came to this point. Going forward, does it make sense? If yes, keep it. If not, sell it, take the loss and write if off on your taxes.