I am just getting started in the RE investing business. So I am orgainzing my team. I was wondering if there are any specific degrees or courses that I should ask the accountant or realtor if they have completed?http://www.myreinspace.com/forums/style_images/webber/folder_post_icons/icon14.gif
Any help would be greatly appreciated.
Thank you
Kristy
as for the Realtor part here is a link that will help you. Russell had interviewed me on Investors/Realtors relationships. What to look for in a Realtor, how to find one, and other info that will help you. you will find it under downloads section/ ask the expert section.
I am just getting started in the RE investing business. So I am orgainzing my team. I was wondering if there are any specific degrees or courses that I should ask the accountant or realtor if they have completed?http://www.myreinspace.com/forums/style_images/webber/folder_post_icons/icon14.gif
Most important when interviewing a realtor is to determine there personal experience in owning income investment properties or representing clients wishing to buy income investment properties. A realtor having only experience in representing home buyers has no clue what they are looking for or what they are dealing with in regards to income investment properties (although they will definitely tell you otherwise).
You want a realtor that will guide a inexperienced investor and will do what they are told, with advice but without question, by an experienced one.
Ask them what they will do if you wish to make an extremely low ball offer to a seller. If they tell you it will offend the seller and they are very uncomfortable making the offer tell them sorry but you need a more experienced agent representing you.
QUOTE (invst4profit @ Jan 24 2010, 06:18 PM) Ask them what they will do if you wish to make an extremely low ball offer to a seller. If they tell you it will offend the seller and they are very uncomfortable making the offer tell them sorry but you need a more experienced agent representing you.
I think you mean "sorry but you need a more desperate agent representing you" lol..
Realtors seldomly make any money off investors who insist on coming in extremely low every single time they see a property they like... which is why most good experienced agents don`t work with investors like this. Unless of course the investor has a buyer brokerage agreement with them that stipulates an alternate means of compensation.
QUOTE (RedlineBrett @ Jan 25 2010, 09:42 AM) I think you mean "sorry but you need a more desperate agent representing you" lol..
Realtors seldomly make any money off investors who insist on coming in extremely low every single time they see a property they like... which is why most good experienced agents don`t work with investors like this. Unless of course the investor has a buyer brokerage agreement with them that stipulates an alternate means of compensation.
I agree. I have no issues representing an investor who wishes to submit a "low-ball" offer. However, I do ask the Buyer to put themselves in the shoes of the Seller and play Devil`s Advocate. How do you think the Seller will react? Do you have a valid reason or comparables that show that the value truly reflects your "low-ball" offer. If the Buyer has a valid argument then absolutely I will defend them...however, if they just want to take cracks at submitting "low-ball" offers every time just so they can get a "steal" then they are truly wasting their own time and don`t really have a serious plan or system in place.
As REIN puts it...you can be "content" by buying at market value and selling at market value. If you are in it for the long term then this is a system that can definitely work. Sure you can attempt to negotiate better terms and a lower price, but if your intention is to constantly "low-ball" then good luck to you.
You can ask any experienced investor in REIN and determine if they became successful by "stealing" deals or by "low-balling" until one desperate Seller says "yes" to you. I can assure you the answer will be no.
Stick to your system and take action toward your goals.
QUOTE (AndreiAngelkovski @ Jan 25 2010, 10:48 AM) I agree. I have no issues representing an investor who wishes to submit a "low-ball" offer. However, I do ask the Buyer to put themselves in the shoes of the Seller and play Devil`s Advocate. How do you think the Seller will react? Do you have a valid reason or comparables that show that the value truly reflects your "low-ball" offer. If the Buyer has a valid argument then absolutely I will defend them...however, if they just want to take cracks at submitting "low-ball" offers every time just so they can get a "steal" then they are truly wasting their own time and don`t really have a serious plan or system in place.
As REIN puts it...you can be "content" by buying at market value and selling at market value. If you are in it for the long term then this is a system that can definitely work. Sure you can attempt to negotiate better terms and a lower price, but if your intention is to constantly "low-ball" then good luck to you.
You can ask any experienced investor in REIN and determine if they became successful by "stealing" deals or by "low-balling" until one desperate Seller says "yes" to you. I can assure you the answer will be no.
Stick to your system and take action toward your goals.
All the best!
Thank you for your reply. Do you have any hints for the accountant?
QUOTE (RedlineBrett @ Jan 25 2010, 07:42 AM) I think you mean "sorry but you need a more desperate agent representing you" lol..
Realtors seldomly make any money off investors who insist on coming in extremely low every single time they see a property they like... which is why most good experienced agents don`t work with investors like this. Unless of course the investor has a buyer brokerage agreement with them that stipulates an alternate means of compensation.
Thank you very much for your reply. Do you have any hints on getting the right accountant?
QUOTE (AndreiAngelkovski @ Jan 25 2010, 10:48 AM) As REIN puts it...you can be "content" by buying at market value and selling at market value. If you are in it for the long term then this is a system that can definitely work. Sure you can attempt to negotiate better terms and a lower price, but if your intention is to constantly "low-ball" then good luck to you.
REIN (Don and many members) also advocate putting in lots and lots of offers because only a few will get accepted and the majority will be rejected. The teaching is to determine what the property is worth to you in terms of an income investment and offer that price, regardless of what the asking price is. Some might call that "low-balling". Others would call it realistic. I totally agree you can be successful buying at market value. But at any given point in time, if there is only one only buyer for a property, then that buyer *is* the market and market value is what they say it is.
Don has also recommended countering a seller`s counter-offer with a second offer *lower* than the original offer, just to rattle the seller. That`s going to require an agent that either has the fortitude to do so or the ability to follow instructions without question.
I would also recommend either George Dube (http://www.dubeandassociates.com/index.html) or Navaz Murji (http://www.realaccountant.com/) as they are both investors in Real Estate and also accoutants so both know what they are talking about.
I use George and his team and they are great - knowledgeable and friendly - even for accountants!
It might be appropriate to rethink your philosophy on this.
My last two property purchases were apx:
$33K less than asking price
$50K less than asking price (most recent)
For the most recent purchase closing in early February I put in offers on approximately 40 properties over almost 2 years prior to getting this one accepted.
Reasonable arguments could have been made to purchase both properties at list price.
I have an exceptionally good realtor that I`m very happy with.
He didn`t tell me to F-off and pay him additional money at any point.
If you were my realtor and asked for additional compensation I wouldn`t be using you.
If I had followed your suggestions I`d have paid $83K more than I needed on my last two purchases alone. This is real money.
Can you honestly saying your looking after your clients best interest under your current process?
QUOTE (RedlineBrett @ Jan 25 2010, 09:42 AM) I think you mean "sorry but you need a more desperate agent representing you" lol..
Realtors seldomly make any money off investors who insist on coming in extremely low every single time they see a property they like... which is why most good experienced agents don`t work with investors like this. Unless of course the investor has a buyer brokerage agreement with them that stipulates an alternate means of compensation.
There is a problem with how we value properties. The methods we`re using are based on income and cap rate. It is directly derived from commercial real estate. It is called the `income approach` for evaluating properties. It is perfectly fine for multifamily properties larger than say 10 doors.
However, most REIN investors buy one unit at a time. A condo unit here, and small residence there. We`re buying in the residential market which is valued not based on income because your competing with normal families. This market is more driven by emotions and the appeal of the properties. For residential properties, realtors use the comparative market approach - which is basically nothing more than checking out what similar properties sold for.
So here comes the REIN member offer - a price based on the income approach while the seller wants market value. I really don`t know who is right, but you know what - he who pays most get the price.
Hope this helps you understand what may be going on and why you may have to put in so many `low ball offers`. They are not really low ball offers, they represent the value that the property has for an investor. However, you must also realize that this does not represents market value in a residential market. As it is said: "Value is in the eyes of the beholder".
Hi Godfried
I agree with your post
However I think you misunderstand (and I didn`t specify)
I`m referencing investment properties
My second last purchase was 15 tenants
My most recent purchase about to close in February is 14 tenants
Both are on high density zoned land suitable for hi-rise developments with devlopable land supply in Waterloo limited
These are investment properties.
So if lets say your markets cap rate around 7% and your client can be patient and purchase a property around 8% cap rate through low ball offers - Why not? If your doing them in batch it`ll take you less than 10 hours of extra work over time to fax them out. And in the context of tens of thousands of dollar`s in commission your making off the eventual sale
you should be willing to put in the extra work.
Brett - Are you sure you don`t want to change your thoughts on this? You`re likely throwing away profitable clients to make $1 more per hour of work per sale.
QUOTE (gwasser @ Jan 25 2010, 11:23 PM) There is a problem with how we value properties. The methods we`re using are based on income and cap rate. It is directly derived from commercial real estate. It is called the `income approach` for evaluating properties. It is perfectly fine for multifamily properties larger than say 10 doors.
However, most REIN investors buy one unit at a time. A condo unit here, and small residence there. We`re buying in the residential market which is valued not based on income because your competing with normal families. This market is more driven by emotions and the appeal of the properties. For residential properties, realtors use the comparative market approach - which is basically nothing more than checking out what similar properties sold for.
So here comes the REIN member offer - a price based on the income approach while the seller wants market value. I really don`t know who is right, but you know what - he who pays most get the price.
Hope this helps you understand what may be going on and why you may have to put in so many `low ball offers`. They are not really low ball offers, they represent the value that the property has for an investor. However, you must also realize that this does not represents market value in a residential market. As it is said: "Value is in the eyes of the beholder".
QUOTE (housingrental @ Jan 26 2010, 10:20 AM) Hi Godfried
I agree with your post
However I think you misunderstand (and I didn`t specify)
I`m referencing investment properties
My second last purchase was 15 tenants
My most recent purchase about to close in February is 14 tenants
Both are on high density zoned land suitable for hi-rise developments with devlopable land supply in Waterloo limited
These are investment properties.
So if lets say your markets cap rate around 7% and your client can be patient and purchase a property around 8% cap rate through low ball offers - Why not? If your doing them in batch it`ll take you less than 10 hours of extra work over time to fax them out. And in the context of tens of thousands of dollar`s in commission your making off the eventual sale
you should be willing to put in the extra work.
Brett - Are you sure you don`t want to change your thoughts on this? You`re likely throwing away profitable clients to make $1 more per hour of work per sale.
Hi Adam,
You are making a good point. I was not referring to big guys like you who buy on a commercial scale. My concern is more with the single unit buyers. One day, I myself may grow-up enough to go your route.
Heheh I hardly think of myself as one of the big guys
QUOTE (gwasser @ Jan 26 2010, 12:29 PM) Hi Adam,
You are making a good point. I was not referring to big guys like you who buy on a commercial scale. My concern is more with the single unit buyers. One day, I myself may grow-up enough to go your route.
