All Forum Posts by: Mike Boss

I recently got my real estate license and have been cold calling expired listings. I have a lead that owns a large house that she also uses as her business. The house is old and needs some work. 

She tried listing it for $3,000,000 and got an offer of $2.7M which she rejected. She doesn’t have a mortgage as it was bought many years ago. She is insistent on $3M. This is why the listing expired. 

If I could convince her to list it for $2.9M or $2.8M and work with me; how could I get her house sold and find a buyer willing to pay this amount? 

most houses in the area sell for $1M. And most unique houses like hers sold between $1.5M and $2.5M. 

I own a house in OH (no mortgage) with my relative. We have it in Joint Tenancy and do everything 50/50. I was hoping someone could explain the difference between joint tenancy and tenancy in common; and which one is better for me. 

From what I understand Joint tenancy has right of survivorship. Does this mean if my relative passed away I would own the property in severalty and his heirs would not take his share of ownership? severalty means I have full ownership of the property? If we have joint tenancy does this mean his wife does not inherit his share? 

Regarding joint vs tenancy in common. Which one is appropriate for different situations? 

How does one go about changing the type of tenancy ownership? Call the title company? 

Just purchased a property out of state with a small pool (it might be a jacuzzi). Home insurance will give dwelling coverage but won’t give liability coverage due to the pool. It is located in the backyard and is raised on the deck/patio area. There is a small fence around it but is under 4 feet. 

This property is a fix and flip and is vacant. Contractors will be working on the property. My team hasn’t decided whether we will get rid of it and make it a patio area. Or if we will leave it. 

As of right now the insurance company doesn’t want any liability. They won’t even cover me if someone slips and falls inside the house, which doesn’t make sense because what does that have to do with the jacuzzi. Any advice? How big is the risk? 

Quote from @Chris Seveney:

@Mike Boss

In California I believe it's $800 a year and rack on what your cpa will charge you and you are gonna run a $2k bill to do a LLC

If you are fixing and flipping lenders may require you to have a LLC.

Truth be told I think Wyoming is a waste of money, you will have to sign the mortgage anyways so you won’t have any anonymity.

The whole anonymity thing blows my mind - honestly people don’t care and all these stories about attorneys etc oh they will find you and see what assets you have / they can run a nexus Lexus report on you and find that out anyways..

Keep it simple

Sounds like LLCs are overrated. 

Here are some questions. I'm thinking of starting an LLC for when I purchase properties for flips. I was wondering how much it typically costs? And is there an annual fee to maintain the LLC, how much is it? I'm hoping it's not more than $200 a year.

I'm in CA and invest in OH. Should I create a Wyoming LLC? Is incfile or legal zoom the best place to do it?

Me and my business partner would own the LLC. We already have a shared personal bank account. Can we use this account and turn it into a business account or do we have to create a new business account.

Do we have to file a tax return for the LLC every year even if we didn't make money in a given year?

What's the point in having an LLC if home insurance gives liability coverage?

I've noticed that sellers in today's market really don't want to lower their overinflated listing price. It's becoming more difficult to find good deals. I found this one SFH listed for $95k in a neighborhood where all the comparables sell for $130k-$150k. The property needs a good amount of work (around $40k). It would make sense for me to buy the house for $50k and put $40k work (all in $90k). And sell for $140k. But the seller doesn't even want to go below $90k from the $95k list price. It's been on the market for a while now because he keeps rejecting everybody's offers. I told the listing agent to call me if he ever changes his mind.

Until then I keep searching for properties in Ohio and submit low ball offers. It almost feels like I’m casting out a fishing line but no bites. I’m frustrated because I have the cash but cant seem to find anything. And I don’t want to force myself into a deal that isn’t good. 

I’ve thought about using prop stream or batch leads and calling a list of 1000 homes. Not sure if it works or not? 

I'm trying to find those rare deals that are very undervalue. For a flip I want to net min 30% ROI. And for a rental I want to hit a minimum 15% net ROI annually. some people think my numbers are unrealistic but I know it's not impossible. I just need to figure out how to find these deals.

I wanted to see if anyone has been in my position. I’m a young investor and sometimes it’s easy to become impatient or frustrated. I also invest in stocks but I missed the  opportunity with Bitcoin and NVDIA. I wish I could go back in time. Now I try to keep my eyes wide open and look for opportunities whether it be real estate, stock market, or something else. 

I want to start doing flips and BRRRRs in Ohio but not sure how to find a good deal. The two parts I’m most concerned about are finding an undervalued property in a good area and making sure it appraises for close to what I want. The appraisal seems like it’s a bit out of my control. Almost like you’re putting it in the hands of the appraiser and the deal going well or not is based on their decision.

I have a really good handyman who I trust. So I’m not as worried about rehab. I thought about paying him like $125 to go out to each property I’m interested in and inspect everything and give his ideas about what it will cost to do rehab. 

I was on Zillow the other day and I found a 5 bed 1bath single family boarded up and going for $29k. The neighborhood has a lot of run down homes but there are also a decent amount that have been fixed up. I found a comparable in the neighborhood 5 bed completely brand new and listed for $115k. I thought to myself that they really went all out with the rehab because the interior looks expensive. 

I thought what if I made an offer of $15k on the $29k house and it got accepted. And if my handyman quoted $45k to make it brand new I would be all in for $60k. And then it appraised for $80k. It could be a good BRRRR. Or I list for sale higher at $100k to make it a flip. This was just a hypothetical scenario. These are all the ideas I have going through my head but I've never taken the action to do it yet because I don't want to do it wrong or not know what I am doing.

It seems I shouldn’t try to do it all on my own. Perhaps using a real estate agent who knows the market and can look at comparables. But I have trouble trusting real estate agents in general. Looking for advice on how to know if a property is a good deal and what the neighborhood should look like? Separately, after the rehab, how do I know with almost certainty what it will appraise for? What if it appraises significantly lower and then the deal is ruined? 

I’ve been looking at Cincinnati and Dayton because my handyman is located in between. I’ve also seen some deals in Cleveland but I have zero contacts over there so I prefer to stick with areas I know.

Quote from @Tim Ryan:

I say go for it. I got my real estate license recently also. I have been using it to get my own deals and finding deals for other investors to flip. But starting to work with retail clients now also. Why not? With prices so high in SoCal it's a no-brainer. Working with your uncle could be amazing to help launch your career.

Does an agent need to have errors and omissions insurance once he has his license? What is the first thing an agent should do once he passes the state exam? 

Quote from @Rick Albert:

There are pros and cons to being a Realtor in Los Angeles. Obviously because of the higher sales price, higher likely of getting decent income. However, it is highly competitive and we are heading towards a market where I believe there won't be enough business to go around. It is doable and I think anyone can make it, but you will have to put the work in.

One way to look at it is how you much sales you would need to do to accomplish $100K. Let's assume as a new agent your split is 70/30 and you have expenses. Let's exclude taxes and assume 25% of revenue for expenses (whether it is photography for listings or gas and mileage for showings).

Average commission: 2.3% (some are 2% and some are 2.5% and even less oftentimes)

Gross Commission Income: $190,000

After Broker Split: $133,000

After 25% for expenses: $99,750

You would need to do approximately $8,260,869 in sales. It is definitely doable, but you just need to be aware of how the breakdown is. Plus this requires nights and weekends. 

If it were me and I was in your position, I would double down on real estate investing. Passive and monthly income is where it's at. I'm working on doing both the agent and investing side.

I was told prep agent is good for taking practice tests. And if I pass all the practice tests then the exam should be easy. Aside from prep agent for the practice tests, do you have a company you would recommend for taking the courses and getting my hours? From what I understand, I need 150 hours. Also, would you recommend studying from a text book or just use online courses and prep agent practice tests? How much should I expect to pay? 

lastly, is it one exam of 150 questions or do I have to take more than one exam to become a real estate agent? Thanks 

Quote from @Michael J.:

First off, big props to you for hitting that $100k mark consistently as a self-employed business owner. That's no small feat, and it's a clear sign you've got the hustle and the brains to make things happen. Now, looking at your situation, you're right to think about sustainability and diversification. Income can be a rollercoaster, especially when you're self-employed. It's savvy that you're eyeing the real estate game, especially with a successful relative in the biz.

Now, on to the real talk: real estate in LA and Orange County isn't just another gig. It's cutthroat, high-reward, and all about connections. Getting your license is a solid move. It's your ticket to the party. But remember, this game is about building your brand, your network, and your reputation. 

You mentioned not wanting to depend solely on your relative's client base - that's the spirit. Forge your own path. Yes, learn from his success, use it as a launchpad, but the end game is to create your own legacy in the real estate world. As for finding clients, it's about marketing yourself, networking like a boss, and providing top-notch service. Clients want someone who's not just selling a house but providing a dream and an experience. So, get out there, shake hands, join clubs, attend events, and get your name known.

In short, go for it. Get that license. Start as an agent, learn the ropes, then consider if the broker's path is right for you. And remember, in real estate, it's as much about selling yourself as it is about selling homes. Keep that entrepreneurial spirit alive, and you'll build not just income, but a legacy. Hustle hard, play smart, and keep aiming higher. You got this!

Thank you for the kind words. I think because I am young it’s the connections part that worries me. My relative is almost 80 and he’s built a life time worth of connections. For me I am just starting and have to build from there. I want to be able to find clients and sell without relying on his clients. I’m wondering how the best agents get consistent traffic their way. What is the marketing secret.