All Forum Posts by: Guy Johnson

Realtyman, I respectfully disagree with your view on listing the property. Love it or hate it, MLS is key to selling a property quickly if you've exhausted your buyer list. If this property is priced well and is somewhat desirable, posting it on MLS with a discount broker/flat fee listing service is the way to go. If the seller is underwater on these, then he'll have to put the saleman hat on and go your route putting forth a very convincing pitch to a naive buyer with money. MLS is the way to go, how you decide to use it and who you use it with make all the difference.

I do, however, agree with all the other selling techniques you've mentioned.

P.S.: Listing the property should end those pesky phone calls from starving realtors and put their money where their mouth is with the buyer they claim to have.

I hate to sound like a heartless bastard here, but seriously Renae, I think you should hang your real estate investing dream up, at least temporarily.

Let's look at the facts, you have been on here for over a year constantly looking for deals that require no money what so ever and want hard money that will cost you nothing, all the while coming up short. Meanwhile, you could be working a job, like Mike has suggested, earning money to improve your life and your family's life. Instead, you masquerade around this site like a real estate investor (and presumably all day in real life) instead of improving your situation. You obviously aren't making any money right now for your family, which isn't so sad if it were just you, but you have kids that need your support.

You just moved into this place five months ago, why didn't the Milwaukee County nix this house due to the lead during their inspection when you moved in? Something doesn't add up here. If you were such a Christian like you claim, you would be working and earning a living for you and your kids. Also, not every place on Milwaukee’s north side is a bad and dangerous neighborhood.

But regardless, you make your own destiny. You can continue to look for more handouts by sitting on investment forums all day or trying to tie up properties unsuccessfully. Or you can get out and find a job, any job, save up for a security deposit on a better place (hell, Milwaukee County R/A basically pays for your entire place so you have to worry about very little rent, if at all), give your kids a better life and cut down on your stress levels. And if you have so many of these deals coming across your desk everyday (like you've claimed in a different post) how come I haven't seen any of them anywhere (I constantly surf Craigslist, MLS, Backpage, etc for deals). Send some of them my way (and to other investors) as wholesale deals, make a little (better than nothing) and maybe your dreams of real estate investing may not turn out to be such a bust after all

I know I don’t know your entire situation, but it’s pretty clear by the picture you’ve painted for us over the past year that abandoning your real estate investing dream is really what is the best thing for you right now. Good luck with whatever you decide.

If you can stomach the fees to hold your credential, pay association dues for MLS and other Realtor "perks" ( I use that term loosely), and do the continuing education requirements, I don't see much of a downside. The disclosure that you're an agent shouldn't turn somebody away from buying your home or selling you their home as long as they want to. The biggest plus in my opinion is you can receive commission on properties you buy for yourself (at least in Wisconsin). You do need to include special verbage about an incentive fee if you are a one man show, but if you work under a broker, they can write up the deal and you should receive commission after your split. Plus you get some additional tax write offs.

I'm trying to gain some insight on what an investor would like to see in a listing package if and when they decide to try out a flat fee service. Sometimes a seller needs a little boost in exposure (i.e. marketing) that the MLS provides. I know a lot of investors view Realtors as useless and feel they can sell their properties on their own (which a lot do), but in a lot of instances a good agent is an invaluable tool for buying and selling. Sorry if I wasted your time when you read my post. Any other comments or suggestions are appreciated.

GFW, I'm interested in what kind of volume you've experienced with your service. Thanks in advance.

Thank you for taking the time to look this over. I am just about to receive my broker's license and own my real estate company. I'm looking to start out as a flat fee listing service and offer buyer agency. As I get further along in the next few months, I'd like to add additional listing packages. I'm also looking to rebate a portion of my commission on purchases to the buyer. Any input or advice as to what you would like to see in a listing package (so far for a flat fee of $199.00 the listing goes on MLS, I provide, present, and deliver paperwork/offers in person, meet the customer in person, and provide usage of trust account for earnest money) would be appreciated. The customer only pays the selling agent a commission upon closing. Comments describing an investor's, homeowner's, and/or Realtor's mentality is appreciated. Thanks in advance.

In your opinion, what would be the best thing to say to get my foot in the door to talk to them and take me seriously?

I was looking over the expired listings today and came across a nice three family. I took a drive by and really like the place. With the real estate market slow right now, I'd like to see what the owners are willing to do versus getting a mortgage. My biggest problems are getting into the mindset of a seller when approached by somebody like me who wants them to be the bank. Which is the best way to approach them? How should I present my idea to them? I would offer them their asking price minus the sale commission, which I believe is reasonable. I would ask for 100% financing at 7.5% interest (I would avoid interst only, but if that was a last resort I would take it), with a three to five year balloon. Being an income property, I see no reason why they would take a lower payment from me while I get cash flow every month except maybe they are not cut out to be landlords. So, any tips, suggestions, or sagelike advice for me? If it doesn't work out on this one, it would be nice to know on the next one. Thanks in advance.

Mike,
I'm curious why you figure half the rent for operating expenses. Are you figuring a vacancy somewhere down the line or a major repair? I understand where you're coming from if that's the case, but not every month there will be a furnace konking out or a tenant leaving. So, if I were to hypothicate those unforeseen problems, but they never arise, technically the cash flow should be higher, right? Or do you just take that money and put it in a reserve so when a problem does come up, it's already there waiting to be used?

The "friend" is actually a good guy and I do trust him whole heartedly. I think $10,000 is pretty steep for his assistance, but he is willing to front the money. Perhaps the fee can be negotiable.

PITI is approximately $1700/month and water@ $75/month. I can handle the upkeep with the building. Figuring the rent when fully occupied based on market rent should be $2650 leaves $875/month cash flow.

My gut feeling is nervous as I have never had to deal with deadbeat tenants and $25,000 worth of costs that couldn't be rolled into the mortgage. I'd jump on this deal if all I had to worry about was assuming the mortgage.

I approached an investor friend of mine who had expressed some interest in having me assume a loan of his on a nice four family. He got cold feet, expressing what would have been seller's remorse. He then called me to tell me about an assumption deal he came across. He told me he will take the deal if I don't, but told me he would like to see me get it.

As we approached the building, a sharp looking victorian caught my eye. Low and behold, it is the building in question. The owner is a hair away from a foreclosure action, it just so happened this investor talked to the right person at the bank. Every loan this bank makes is assumable, and I have my house and four family with them.

Specifics of the deal are: Assuming a loan of $177,500 on a building that is worth $250,000. In order to assume it, the arrears of approximately $5500 need to be brought current. There is also a $10,000 second on title held by friends of my investor friend, who would talk to the them and arrange terms for me. Why is my investor friend giving me dibs on this deal? Because he will hold my hand through the whole process, front me the $5500 and get the place managed properly. For this he wants an additional $10,000. So in all I'll be in it for $203,000.

The place is poorly managed right now, and needs a ton of clean up in the yard. Two of the tenants are decent, and said they used to keep up with cleaning the yard, but stopped when no one else cared. One unit is vacant, two of them will be because the tenants who live there do not pay their rent and are total slobs. The building needs nothing major, but does require some sprucing up.

I figure with the building fully occupied, and after paying the monthly payment, there should be some cash flow of $800 to $1000. That does not include the $5500 to bring the note current, and the other $10,000 that has to be paid some time down the line, within the next year I would assume.

My hang ups are coming up with that down payment of $5500, the second of $10,000, and the $10,000 mentoring fee. Again, I have help getting the $5500 paid and working out terms for the second, but the fact still remains those need to be paid. And with the building not fully rented out, keeping up with the mortgage is a little worrisome. The investor told me if he bought it, I could assume the mortgage from him, but my price would be $20,000 higher, but that would include his mentoring fee, but it would also be tacked on to the $5500 and I assume the $10,000 second.

I really like this building, and the deal represents a great way to get into this property, but something seems to be holding me back from saying, let's do it. Any comments would be appreciated.