All Forum Posts by: Rick Santasiere

I will always share my experience, and don't have "secrets." My knowledge will always be shared to anyone who finds it useful. And I have so much to learn still, and continue to learn at least one new thing every day in relation to RE.  I will update this post before weekend. 

@Michael Dake well said.  Much more precise way to explain to someone who isn't licensed. Sadly, there are people that are always looking to use and abuse agents for their expertise, then state that what we provided isn't rocket science. It rubs us hard working brokers and sales people the wrong way. I certainly could have done a better job in explaining my point, as did you, so thank you.  @Reese Thompson. Glad you got what you were looking for. BP is such a great way to get information for free, and it's a great network for all of us.

@Reese Thompson best of luck to you and your cousin. When you lack the experience all the people out here clearly have (and you clearly don't), you WILL lose money.  You called someone ignorant, which was insulting. Totally uncalled for.  Your post started off being unprofessional, and your comments to the people (THAT YOU ASKED ADVICE OF) is extremely sad. I am very glad that when I encounter someone like you, I run. As for how well you will do in this business; just not sure. I do know that people who try to sneak their way around rules, customs, and the normal and ethical way of doing business, eventually it comes back to getchya! Some call it Karma, some just say "what goes around, comes around.." I do wish you luck, but you owe at LEAST one person out on this thread an apology for insulting them after you have clearly asked for advice.. Next time, just don't ask, or be a little nicer, especially seeing as this is supposed to be a site to encourage business and working with one another, and learning and teaching one another. I just hope you did learn something. 

@Reese Thompson, most of the other agents/brokers shared their feedback, I will share mine. We (brokers and agents) get paid to represent buyers and sellers. We have a moral and ethical responsibility to show our buyers ANY property that is listed for sale (regardless of whether it is on the MLS or not) When we start to work with buyers, we typically have them sign what is called a Buyer Broker Agreement, which contracts us to work in their interests (instead of ALL of the sellers out there). The reason for buyer agency representation was to protect the buyer. Long long ago, it was the seller only that the realtors cared about, hence the birth of the buyer representation (by all means, someone chime in on the exact date or time period this happened).

In your scenario, you are suggesting inflating the price of a home so that the buyer would end up paying the commission. This is completely against how we (as realtors) do business, in fact, it is borderline unethical. The most fair way to do it is to alert the buyer of the scenario so they understand that the seller isn't willing to pay for representation. When we do this, it would become very apparent that the seller is trying to avoid paying a commission. So what else are they trying to avoid? Are they looking to hide latent defects? Are they hiding anything? I am not saying that all FSBO's don't act with integrity. I am stating that there could be the perception that the buyer ends up even more nervous (especially a first time homebuyer)

By using some type of representation (your cousin), he get's to get his home on the market and in the face of thousands of realtors, who have ten's of thousands of buyers, which is significantly more than your cousin would have gotten from listing (and selling for that matter) on his own. Someone else mentioned the standard 3%. I wouldn't even do it for 3% if I was representing both sides. No way. Because the seller (trying to avoid a commission) is also not going to understand all the processes in selling their home, and the buyers agent will end up doing both sides work anyway. I would handle both for 4%, and have done that in the past. One last thing, if a buyers is ready, willing and able, and a lousy $3k is the payment, so be it. That buyer could walk, and your "cousin" might not get another offer for a year, OR EVER... How many thousands did he lose then? I bet a lot more than $3k. My $.02

Always hold as much of your own cash as you can. Always put down the minimum amount on the loan (20-25%) depending on the type of loan to avoid any PMI. As long as you are buying a cash flowing property, the mortgage you take out on the new place is taken care of. Then, you can do this a few times (as long as you have the credit score and income to back future loans) Most banks are good about giving you 75% of the proposed rental income. So if you can rent a place for $1,000, they will use the $750 amount to offset the DTI you will receive once they underwrite. In theory, if your taxes, mortgage, insurance equals $750, then it evens out and has no impact on DTI's. There are all other sorts of variable too, but if you have less than 4 properties, it should work. Leave equity in existing property until you need it. HELOC's are awesome, but they go against you as far as DTI, and will hurt you getting conventional loans (even if you are NOT using them) Sorry to run on, but to answer your question, keep the cash if you can. If interest rates hit 8%+, then I might say something different. My $.02

Ken Badziak I wish i could hire someone to call every expired listing owner every day!! For two angles: finding motivated sellers, or capturing a listing for my brokerage. Point is, I'm sure an agent would help you, if you helped them...

I wasn't sure what forum to put this under and how "alerts" truly work on this site, so I am hoping that this get's out to the audience I want it to in Hartford and Tolland County as this is going to be an ongoing diary of virtually every aspect of a deal I just picked up 4-14-16. I welcome feedback, suggestions, comments, even critical feedback, as no one knows everything, and I fins value in everyone's input (even the beginner, who might see things differently with a "fresh set of eyes." I am also extremely "wordy."  There is a reason for this (on my end), but I welcome you to share if you feel that my diary is just "too much" info, or if you even want "more." Most of you who have not heard about my deal already just need to know that this was a "calculated risk" purchase, with expenses NOT verified, as-is with no inspections, and a total leap of faith. The numbers were too good to pass up, even if there is some unexpected challenges along the way. I would like to thank @Joshua Dorkin and @Brandon Turner just for all that I have gotten from the podcasts, and especially Josh for having the vision to create such an excellent place for all of us investors (at ALL levels of experience) to share our experience, strength, and hope :-) My hope for this diary is to learn from my mistakes (past, present, and future), and show people that sometimes you just need to go out and "do it," and believe that the future has your back as long as you do the right thing, treat people with respect and integrity.

So here we go. Day 1 - 3. Thanks for taking the time to read:

4 Family Willington Diary

• -April 13, 2016 – Purchased property for $55,000. $10,000 in cash via EMD, with remaining balance of $44,148.47 paid out via HELOC from a SFR Rental in my portfolio. For the sake of this diary, I moved $50k into my separate account for this property on the day of purchase, so that there is roughly $6k sitting in it for repairs, and security deposits (that were credited to me along with rent pro-rations) on the HUD. Replaced fascia board on rear of home near roof line (cost unknown, and other repairs are most likely required to make exterior solid) Initial visit of interior had all units at average condition, with some items that should be handled at lease end of each. More to come once leases are up with each unit.
• -April 14, 2016 – One vacancy (in the best of the 4 units) and has been listed for 24 hours. 5 inquiries so far, with two –three solid candidates that have been instructed to do drive by visits prior to our first meeting. Going over three lease terms, and they are ugly. There are not even legal names anywhere in the lease(s). Signatures are there, but some illegible. The one nice part, is that I had a great working relationship with the seller, so she gave me some details about each tenant, their cell phones, etc. Rent amounts look low as well, and I will report more on those once I determine the freebies (apparently one guy is getting $50/mo off for taking out the trash) Really? I will have to deal with that, for now… Don’t want to rock the boat. I spoke with one renter tonight because he is on a 15th of the month rent cycle, which is fine with me, and tomorrow is the 15th, so he knows where to send payment.
• -April 16, 2016 – Installing a For Rent sign with my Santa Realty post just for some free advertising and potential to get other qualified renters through the door. Dropping a welcome letter to the tenants explaining that the property is now owned by an LLC, and I am the acting Property Manager. This is NOT a lie. It simply removes ME from being named as the owner, and I can use "the owner" (who in essence is my wife and me as members of the LLC) as reasons for decisions, changes, etc. It just insulates me from any of the garbage, and I can build better relationships with the tenants. I think I learned this from Bigger Pockets, but I am not certain. If I did, awesome, I am glad to be sharing that I am using the strategy and helping others use similar tricks in their future endeavors.

More to come on Willington, Tolland County 4 family

Precisely. I will have to hit you up for some names off line for asset based for my future acquisitions. Talk soon Mike.

Makes perfect sense. Re-fi out in a year? What type of lender will you use for that? A portfolio lender (hard to get and have to prove income from all sources) or an asset based lender (which I have never dealt with personally..yet) It seems the Asset based ones have huge fees (ie, appraisal might run $1,500 instead of $500, and loan fees are a little crazy..)

Did you finance? HML? or Cash? I love the options Mike. It's such an awesome way to lower our entry point and entice the "tired landlord" to cut us a "deal." Love it Mike. Def want to hear about financing too. When I do mine, I will just show my HELOC interest payments monthly. Will be great to compare notes