All Forum Posts by: Trevor Richardson

What’s your expenses?

I’ve seen questions like this a few times on BP. It’s strange how there is this notion that you just “become” a real estate investor. There are so many jobs in real estate to start learning… Lenders, title, property management, asset management, construction, agency.

I’d pick one of those and get to work. You will immediately begin to learn one or multiple sides of this industry. There are so many people that make money (lots) in real estate outside of owning properties directly. That typically comes later. Find something where you bring value to other people. Start there. 

It’s common to, I hate to say it, ignore the tank. Depending on the age, if it was slurried or not, the tank may or may not have leaked. If there is contamination there is no way to know unless it’s drilled and sampled (phase 2) $5k-$10k. Because that opens up a ton of liability typically for the (seller) these are left to rest. It could be $10k or more to have it removed and remediated. Good luck having a seller accept that in a hot market where another buyer will ignore it.

If it really concerns you have a Phase 1 environmental survey done and ask the local environmental specialist what they would recommend. 

Quote from @Arsen Atanasovski:

I got in trouble last time posting about agents on BP, had a few agents upset. Basically I ask the agent how many rentals do they have if they say none I move on to the next one. I am an agent and I have rentals and if an investor is looking to buy investment properties then an agent like me would be ideal. Like I tell my wife if the chef is fat the food is going to be great! If your personal trainer is fat mess it’s not a good idea to have them train you unless it’s for an eating contest. 

I think your plan here is a quick one to identify agents not qualified because there are so many real estate agents. 

But there are outliers. Take commercial for example. You could easily have an office agent who have been great for 25 years, known in the real estate community as the best, leased out many large office buildings and millions of office square feet. It’s very likely this real estate professional does not own a $25m office building, never has but they know everything about how to lease and sell them.

There are ranks of acquisition officers in real estate companies that are tasked with evaluating real estate assets that they don’t own. You could have a team lead for a multifamily company that’s found and bought $1b in multifamily for his company and himself does not own a 100 unit apartment building.

Just saying this is not a one size here. I also know agents who own rentals that offer absolutely terrible advice to clients. 

You should look at Reno. It’s the first city outside Nor Cal. We have helped a lot of Bay clients over the years. They love the proximity to where they live, and Reno is very stable. Just need to know how to find deals, our team leads the market in small multifamily transactions. Let us know if we can help. 

It’s always good practice to split commissions. You will be on the other side at some point.

Investment properties are so much better vacant or M-T-M. But only if the property is value add. If the property is newly renovated it’s better with tenants at the market rental rates. 

Quote from @Allan Smith:

Only new investors think that a deal can be found on the MLS that nobody else saw. It is a nationwide listing service, if it's a good deal somebody would have bought it. I have seen dozens of MLS deals blast out on the wholesalers list, and every time they are way overpriced and don't sell. The wholesaler just didn't know.

Going to disagree with your assessment. Some of the best deals we have done for clients were on MLS. They were such great deals we had to identify them within an hour, and get an offer within a few hours. Over the years we have seen fantastic deals sitting in plain sight.

Why people can’t always see them is they don’t have an agent watching for deals every day (so they miss them) and/or are lacking the analysis portion that makes a meh property on MLS a great investment that nobody else can see or understand.

Classification breakdown.

It's multifamily residential. That's how it will be comped/appraised. Even if it's cash flow is STR throw market LTR rates on there for a valuation analysis.

Current operation. STR, basically a multifamily complex running like a hotel. A specialized business operation that not everyone will adapt the property to.

Lending. Will require a "commercial" loan. I wish this was called a "DSCR multifamily loan" because there is nothing "commercial" about multifamily.

The reason agency is attractive is there is no ceiling to income. But you can’t be a great agent with another job and focusing on your investing goals at the same time. You can and many do but the best IMO focus their concentration and work life.

Real estate brokerage is a full time full effort industry to become an agent that really stands out that can rip 25-40 transactions a year and make $350k per year. That’s when investing on the side becomes much easier. My take.