All Forum Posts by: Reuben Stone

Hey BP, 

I am currently working with a broker who has mentioned having me sign a buy broker agreement. I am hesitant to do so because as I understand it, it would be like me asking the broker to sign a agreement saying he can only work with me and no other buyers. Am I wrong to assume this? What are peoples thoughts on buyer broker agreements from an investors stand point? 

Hey BP, 

I am currently working with a broker who has mentioned having me sign a buy broker agreement. I am hesitant to do so because as I understand it, it would be like me asking the broker to sign a agreement saying he can only work with me and no other buyers. Am I wrong to assume this? What are peoples thoughts on buyer broker agreements from an investors stand point? 

Michelle, 

I have definitely thought about owning that market. The thought has crossed my mind many times. My hesitation is the fact that the quality of renter in this area are not good what so ever and the vacancy rate is about 15%. Both of those things make pretty nervous. However, that being said I am heavily considering the 'Owning the market" option because there are definitely nicer parts of town. Ill keep everyone posted! 

I have looked into the single family home scenario for sure! The approach I was planning on was to hopefully buying a multifamily property so I could live in one of the units. I own and operate a property management company in this high priced area and I would rather not pay rent. My goal was to live in one of my units until I saved up enough to put a down payment down on a house. Even then, because I very careful with money, I would ideally like to have a house with some kind of apartment above the garage, or potentially build a space, so I can rent it out and off set a portion of my mortgage.  

I am really hoping to land some owner financing deals. Does anyone have any tips on ways I can find owners willing to do this? 

Thanks for the advice! I still just can't people understand that from an investors point of view ( especially one like me with little money) I really need the property to at least cover it own expenses. When properties are over priced by 200k or 300k its extremely hard to make that happen. I have been thinking about making a craigslist ad to market to property owners for so e seller financing opportunities. Has anyone tried this and if so how successful was it? 

Keep the comments rolling!! 

Patrick, 

I own a property management company myself. My company emails/mails (If the client is old school) a financial break down of all activity the property has experienced in a given month. Basically this break down lays out exactly who paid rent and how much, who was late on rent, what repairs were needed, how much were they, and who preformed the work. It then gives the NOI for that month which should be the same amount as the check you received. If you are not receiving a report like this then you should contact your property manager and request one to be sent every month. If they are unwilling or incapable of doing this you should be concerned. When you get the statement, make some calls to the vendors listed and make sure that your property manager actually spent the money he/she said they did. You dont want them telling you they are spending all this money on improvements/materials when in reality they havent spent a dime.

Hello BP! 

Here is my dilemma. I have yet to acquire my first investment property due to the fact that everywhere I look the prices are so high or the area has no potential! Here are my choices, I can invest in a building that is in the middle of no where (No jobs, low population, etc), I can invest in 1 out of 2 towns where the prices are much lower but the quality of the buildings/tenants is terrible (Filled with crime, drugs, bed bugs, you name it) not to mention rents have not increases in ten years nor have property values appreciated in recent years. In fact they have gone down. Or I can invest in one of the most expensive markets in the county (14th most expensive town to live in according to a recent article). For me, I dont mind working hard  to make things happen. But when it comes to real estate I would  much rather invest in a building where I can get halfway decent tenants, make some improvements along the way, adjust some rents, and see some appreciation. I dont like the idea of investing in a market where the only tenants I can get are drug dealers, hoarders, etc. 

So that basically leaves me with the hot market area. In this market there are 13 unit properties that have a NOI of 70K being listed for 1.1 million. 3 unit buildings that dont even begin to break even where the owners are asking 500K. Outrageous I know. The high prices and extremely low inventory make it almost impossible to find a good deal. This forces me to explore my other options, but it is hard to consider them when all you see if for sale signs, and business's going out of business around every turn.

So I am coming to you guys for advice. Is there something im missing? Let hear your thought! 

Welcome to BP! I too am just starting my real estate career and ultimately want to end up with a portfolio of mostly commercial property. I just like to stragies and concepts involved in commercial. Thanks for the intro and I look forward to reading what you have to share in the future! 

Dan and Joe, 

Thank you both for the input! Dan, my end goal is to be heavily invested in commercial properties. I like the concepts and the overall business strategies that come with commercial. However I do understand that with commercial comes the increased possibility that your building will sit empty for a long period of time and you have to be able to handle that mentally and financially. Hence the reason I think I should begin with some residential buildings that produce decent cash flow. I just need to better understand how to leverage properties. If either of you know of any good books or other resources on this topic I would love to give them a read! 

Again thanks for the input and the advice, I am glad that there is a place like BP to ask questions and get some guidance. 

So far I have not gotten involved in BP as much as I would like too. My property management company is in the middle of a major program change and tax season in coming up! But I am on here today to ask a question that I have never really gotten a good answer too. So here it goes...

I want to know what  is more advantageous for my first investment. Option 1: Invest in a foreclosed property for under 50K fix it up and then leverage that property to buy my next one. Option 2: Invest in a 500K property right out of the gate? Option 3: Somewhere in the middle of option 1 and option 2. 

I am 23 years old, never owned property, and own my own property management company. I have the ability to invest in the 50K properties right now and I have the resources and connections to allow me to invest in the 500K property as well. I want to make sure that my first investment will not effect the rate I can grow my portfolio. I want to own many properties and I am having a hard time determining where to start. I understand that the foreclosed option would allow me to use the equity to purchase my next investment, but do not know how I could leverage a 500K property to make my next investment purchase. I dont want to invest in anything under 4 units and all the foreclosed properties in my area are less than 4. The rental rates in my area just dont produce enough cash flow to justify a duplex or a triplex investment. 4 units is where you start seeing some return.

Any suggestions or advice? Any feed back will be greatly appreciated! Basically I just want some advice on where to begin and what option would allow me to grow my portfolio at a healthy rate.