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All Forum Posts by: Edgar Collado

Edgar Collado has started 3 posts and replied 53 times.

Post: Equity agrement with real estate broker?

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

A real estate broker recently offered my partner to send deals our way for a 20% partnership interest in the deal.  He would waive (or ignore) the commission and we can consider it his "investment" in the transaction.  What do you all think about this "offer"?  What kind of "finders fees" or offers have you encountered?  Man, I'm just looking for reputable brokers that are willing to help and make money on commissions.  Perhaps down the line once a relationship is established an equity deal could be worked out, but off the bat.  On the first meeting!?  Seems a bit shady.  Curious to hear your thoughts.

Thanks

Welcome! BP is a great community and you will learn a lot here. Good luck!

@Larry T. Great question.  I was just wondering the same thing...searched the forum and here it is!  Love BP.  

Anyway, imagine you have $100K to invest.  Why pick real estate?  Let's put passion aside for a minute.  Many of us are into real estate because we enjoy the challenge, love the work, whatever.  But speaking strictly on a financial basis, does it really make sense.  

Option 1 is to invest the $100K in one or several rental properites with a 10-15% COC, giving you $10-15K per year.

Option 2 is to take the cash to buy and flip.  I'm not sure what kind of return I can expect here, but it will depend on how many deals you can find and crank out.  A random guess says as a beginner maybe 3 or 4 deals a year once you get some momentum (maybe less?), netting 20-30K each?  So you can earn a $60-120K.  

Option 3 is to put it into any other business...maybe a tech start up that can turn into the next big thing, or perhaps your neighborhood pizza shop or barber shop.  Depending on the type of business your income growth is limitless with that initial investment and without the need to continuously look for the next deal.  I did a quick google search (because the interest is always right) on barber shops.  One article claimed the national average income for a barber shop owner was about $30K, but another had several examples of barber shop owners making $80-200K per year in net cash.

Personally, I'm like many of the others here.  Real estate is only one faucet of my financial plan.  I like the numbers involved in real estate, I enjoy finding and closing deals, I enjoy the interaction with other (most, but not all) real estate professionals, and like the idea of an asset generating income for me without much effort after the initial push (assume you property manage, hire contractors, etc.).  

Curious to hear your thoughts.

@Mattie Covatch My initial reaction is no given the extra cost, risk and overall hassle.  However, if the rental market is competitive and offering internet would set your rental apart it might be worth...especially if you can build the cost into your rent.

Post: Venting

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

Haha, like others have said, get used to it!  I have bought and sold 3 personal homes, two investment properties, and had another 40 or so transactions when I was an active Realtor.  I don't think a single one of those transactions ever closed on time or without a hitch of some sort.  :-) Good luck...and don't beat yourself down...be proud of your soon to be success!

P.S.  You just described one of the key reasons why few succeed at real estate.  Too many variables, too many uncertainties, too many people involved.  It takes a lot of work and coordination to get deals to the closing table.

@David Kosiorek

Post: Negative cash flow.. YAY OR NAY???

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

If your goal is to turn it into an investment property, then I would say definitely not.  What happens when you move out...now you have a property that is going to suck up cash that you could be investing elsewhere.  Now...if you think the current rent is lower than market, and that you can invest in the property to the point that when you move out it is worth more and has positive cash flow, then maybe.  But generally, I would say no.  Good luck!

Post: BP Family

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

@Scott T. Welcome to the community and best of luck!  I think your goals are definitely achievable.  Having specific goals is paramount...and helps keep you focused.  Many members, including myself, often stay I want to get involved in real estate, etc. but how many of us can really articulate what that means.  I'm working on my plan now and hope to be able to do so very soon.  In the meanwhile, also looking for that "first" deal!

Post: Flip #1 Completed!

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8
Great job and congrats! Would be great if you could share the numbers, as well as any key tips or learning. Thanks.

Post: Is REO inventory overpriced everywhere?

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

I'm in the South Florida area like @Chad U. and am seeing the same things. Can't get numbers to work on anything. Like many have said it's going to take patience and perhaps other approaches to finding deals (direct mail, driving for cash, etc.). In my area there is a lot of competition from hedge funds and foreign money, so the only way to get a great deal is to know about it before anyone else does. By the time it hits REO, it's often too late.

Post: My first deal.

Edgar ColladoPosted
  • Weston, FL
  • Posts 55
  • Votes 8

HI @Nana K. congratulations on your first deal! Seems like the numbers will work out well for you. Only thing I noticed is that you didn't include any vacancy or maintenance cost in the analysis. While those are contingencies, like capex, they could also eat into your cash flow. How much out of pocket did you have? Trying to get at what your COC will be.

I was just browsing the Homepath listings.  I would be very interested in learning about the process.  Did you make an offer with a realtor?  Do you use the "online offer" thing I see on the site.  Was it a back and forth negotiation or did you just submit one time.  What has the closing process been like, etc.  Anything you can share about the process would be very helpful.  Thanks!