All Forum Posts by: Robert Carmody

Know your market and know it well. Do the research thoroughly and upfront on the buy side so that you know what is realistic to expect as far as the improved value goes, and don't bank on setting new records when doing so. Home prices have been going up very quickly, but you don't want to be reliant only on the appreciation of your local real estate market for the flip to be profitable. When it comes to flipping, so much of the success of the venture is determined by what your client pays for the property and what they know about the property going into the deal. The less that they pay, the better the margins are without having to try and list and resell above market later. And, the more they know about the place, the less high cost and unplanned or surprise repairs they have to spend time and money fixing when they didn't budget to do so. Be conservative and cautious on the advice you give. Good flippers are great clients to have, especially if you respect one another's goals, professional opinions, insights, and experiences.

Once your client has purchased their property to flip, don't disappear on them. Check on the project periodically. Talk to them about their budget and get an idea of what they are spending for different improvements and try to pay attention to some of their costs in comparison to repairs or renovations on other transactions you might have had recently. Maybe you can connect them with someone you've worked with before that will save them some money on repairs. Understanding common improvement costs and repair costs will help you locate and analyze future deals. While the project is moving along, keep a close eye on the market surrounding it, the list and sale prices for new listings and sales, and visit any that look similar in person. When the project is complete and ready to resell, you want to be confident and accurate with the price you recommend. Beyond that, if this is a repeat customer who is planning to do multiple buy/sell deals with you, provide value added services that most agents charge additional for, or don't provide. This can include staging, professional photos and tours, maybe a unique website, boosted postings on social media, or whatever you come up with that sets you apart. Don't assume that you've got their business permanently, or that they don't know other agents, haven't been approached by other agents, or that they wouldn't consider hiring another agent. 

Retired and former service members can often be successful in real estate, and they often have many of the skills that are useful in this business, which can make it a good 2nd career - like having self-discipline & structure, valuing teamwork, and their own experiences moving and relocating. You may want to consider exploring the possibility of working on a larger team, rather than on your own, as they might have the support staff and other team members that can work with you and your clients in order to still provide the same full time/full-service experience customers expect. If this appeals to you and you do have some successful teams in your area, approach them from the standpoint of the benefit you can bring to their team, such as increasing their annual sales production through your direct connection to military families and veterans as homebuyers, military relocations, etc. Obviously, your full time, 9 to 5 position within the military is your priority, especially 3 years out from retirement, so the right team leaders might be more willing to add a part time team member when you bring more opportunity with you given your other work experience. 

In most parts of the country right now, the market is moving at a pace that requires an agent to be on their toes and committed full time. Buyers do not have the luxury of casually looking at houses on the weekends, and sellers are famous for rejecting the idea of having a part time agent list their house and represent them in the sale. Multiple offer scenarios are common in my market, and as exciting as they can be, they require a lot more work, a much larger volume of calls & texts, and that's just when working for one of the buyers, not the seller. Inventory shortages and rapidly increasing prices create an onslaught of challenges and market driven circumstances that often take more effort and involvement, and the damages that we risk causing can be very costly, to our clients first, and ultimately for the agent. 

Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize. 

The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021,  the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.

Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.

Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe. 

If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help. 

1) Set a goal and make a business plan that aligns with that goal. Your broker or an experienced agent should be able to give some guidance there. 

2) Become an expert of your market and use that expertise to provide useful insight. While that sounds like an obvious suggestion, all too often new agents put all of their energy into prospecting for business, which is also critical to your success, but you've got to have something of value to offer those prospects, and market knowledge is valuable. This is especially important if you are young and a new agent. The average agent is in their mid 50s and even if they are newer to the business, chances are that they have many years of other professional work experience behind them, and if nothing more, most have personal experience as a buyer or seller. Some have experience with owning rental properties, or flipping houses, or new construction & custom building, or remodeling, or have weathered rocky markets and recessions, have held positions on their neighborhood HOA, or have dealt with the division of real estate and assets following a divorce or death or financial hardship, or possibly an employment related relocation. They can use that personal experience to develop their "real estate language" and converse with prospects, and in doing so, the questions of how long they've been selling real estate and how many houses they've sold are less likely to be asked by the prospective client. For younger agents, the question of experience is less of a mystery, and it's usually obvious that they don't have decades of prior sales experience or an arsenal of their own investment properties. Use the time when you are new and have more time to really learn the business and the market you serve. Ask questions - from your broker, other agents, on online forums. Study your market and know it like the back of your hand -- new developments, pocket communities & hidden gems, identify undervalued or emerging markets that might offer a better ROI, review market stats frequently.

3) Network and connect with service providers and industry pros - mortgage lenders, title providers, home inspectors, contractors, handymen, concierge services, property managers - you'll be prepared when you are working with customers of your own. 

4) Watch other successful agents and what they do, where their business comes from, where their listings are.  

5) Preview the inventory, including new construction and model homes. 

6) Make yourself present -- at your office, in the community. 

7) Practice -- practice what you say, how you say it. Practice preparing offers and have a clear understanding of what the contracts say and how to navigate the transaction. 

8) Prospect for new business. Schedule this time and stick to your schedule. Don't stop just because you have a few leads or sales in the works. 

There is a common perception or belief that real estate is a "learn as you go" business. Yes, you'll learn lots with hands on experience, but there is also a lot that can be gained by a more proactive approach.

Sent you a message a few minutes ago @Amable John Aguiluz XIII. Happy to help out or answer questions. 

@Mark Hughes  Just emailed it to you as a PDF. Hopefully that is easier. Sales data is gathered by the Greater ABQ Assoc of Realtors and released to members and the public in the same format. Our local Realtor Association has sales data, like this, from about the early to mid 80s through today. 

1. 1) Review the policies and procedures with your current brokerage before you do anything, and/or your Independent Contractor Agreement. Understand what they say about leaving the company, and how existing business is handled when you do.
2. 2) Do you have pending sales or active listings?
   1. If so, know what they are worth to you in terms of commission dollars.
   2. If so, know the company's policy on transferring them to the new brokerage. The listing usually belongs to the brokerage, not the broker, but many companies will allow you to transfer the listing to the new company, with permission from your client first. Sales that are already under contract can be tricky because you usually can't transfer a sale that is already under contract to a different brokerage. That means the old brokerage will be responsible for finishing it out, depending on the stage it's at. Some will still honor your commission split; others will keep a larger % depending on the work left to do, and I've heard of some that will only pay the agent a referral fee.
3. 3) Work with the new brokerage, once you've committed to working there, to prepare for the move and transfer of any existing business. This might include having business cards ready, an announcement to your clients, signs for your listings, paperwork for transferring your license ready, and if you are transferring existing business, be prepared to explain to those customers the value or benefit to them when you make the move. 
4. 4) Prepare to notify the current brokerage that you are leaving, and be prepared to leave quickly when you do. Unlike most employers that expect 2-3 weeks notice when leaving, real estate firms will usually want you out of sight right away when you give them the news. This prevents you from spreading the news around the office and recruiting others to join you in your departure. 
5. 5) Notify clients as soon as you've told the brokerage that you are leaving. Explain how the move may benefit them. It's easy for us to talk about all the reasons why we want to switch brokerages and how the move benefits us, but focus on the benefit or value added to the customer's experience. 

Timing a move can be tricky, and for the new company you are moving to, "now" is always the best time to do it There is never a perfect time, but if you are busy with a bunch of customers and have a lot on the line, moving to a new company at the same time can be chaotic and frustrating, including for your clients.

Albuquerque tends to be a stable market with very little volatility and steadily gains value at about 3.5% per year, on average. The climate is fairly mild, and without extreme weather conditions that cause wear & added maintenance/repair costs. Rental market is strong with steady supply of good quality renters, between the Air Force Base, Sandia National Labs, Intel, Netflix Studios, NBC Universal studios, new Amazon facility, T-Mobile/Sprint call centers, several major hospitals, medical research centers,  University of NM, Orion Center -  aerospace, and other tech companies newer to the region. The highlighted years in the image below are the only years where Year-Over-Year prices declined over the last 36 years. 3 of the 5 years were during the "Great Recession", and one of the other 2 years was a decline of only .16%.

You can hire an agent to show the property, or possibly a property manager that you can pay a flat fee for showing it, assuming you are wanting to continue to self manage beyond that. In ABQ, you will find that most of the residential sales brokerages, particularly the big real estate brands, do not handle any property management related services, or don't allow their agents to engage in any sort of work that might be considered property management. Sales and leasing agents hold the same type of real estate licenses here, whether practicing residential sales, commercial sales, residential or commercial leasing. However, the Errors & Omissions Insurance that we are required to have will vary slightly and agents providing property management related services will have a property management rider attached to their policy. If you are hiring someone to specifically and only show the house on your behalf, make sure you have an agreement in writing that outlines whatever specific or limited services they are providing in exchange for the fee you pay them. 

Our single family rental market is very strong right now, and assuming the house is in decent shape, in a decent location, you'll probably have no problem renting it quickly, and with many inquiries. If you haven't done so already, you may want to obtain professional photos and a virtual tour of the property before any tenants move in, along with a floor plan drawing that shows the interior walls and room dimensions. With smart home features, like Ring cameras, smart door locks, and tenant screening software, you might be able to ask prospective tenants to view all photos, the virtual tour, and floor plan prior to requesting a showing. When they request a showing, you can ask each prospective tenant the same pre-screening questions and to send an image of a current photo ID. If satisfied with what they provide, you can schedule the showing and unlock the smart locks remotely and allow them to enter the house on their own to see it. I know the idea of doing that doesn't make everyone comfortable, but then again, how many houses are there that are listed with property management companies who allow the prospective tenant to check out the keys from their office and tour the house on their own?

Security Escrow (click here) and Sunwest Escrow (click here) are the companies probably most frequently used, and most reputable.