I think I may have finally found a property where the numbers work. I have been looking at the same street for the last 3-4 months waiting for the right property to come along. It is a 3 family listed for $224,900, fully rented with signed leases and it is de-leaded. The gross rent is $2140 per month.
We are going to look at the property this Wed, however, I have a question regarding the real estate agents. I recieved the listing from a daily listing update sent to me by an agent who called out of the blue. I have not signed anything saying that she will represent me, she just sent me the listing. The agent that sent me the listing is very nice, but is a very inexperienced agent and has no experience working with investors. The listing agent also works for the same broker. I don’t know if I feel comfortable having representation out of the same agency. How should I handle the representation aspect of things. I would prefer to work with someone who is knowledgeable about investments (preferably someone who owns rental properties). Alternatively should I negotiate the deal myself - I don’t think this is a good idea becuase I know just enough to be dangerous.
Any thoughts would be appreciated…on either the numbers or the representation issue.
You need to learn what the process is, even if you are using an agent. Everyone is prone to mistakes - are you just going to trust that she did it right?
I have a general idea of how the process goes. I have read quite a few books on REI and have a pretty good base of knowlege from my profession (I am an attorney). However, becuase I have not seen a deal from start to finish there is the element of the unknown.
Should I work with an agent…or go it alone on the first deal?
I don’t think you should blindside the agent on this one even if she mess up you can always learn from her mistake, but she may end up being a good source of leads in the future.
Work with the agent and learn from any mistake that may occur.
Thanks for the reply. I called the agent yesterday to discuss it with her directly. She totally understood my concern about having both sides of the transaction represented by the same agency. We agreed to meet in the future and discuss investment objectives etc. This property is a one off situation.
I feel better letting my personal code of ethics dictate my business dealings.
I would not be too concerned with agents on both side working for the same firm. Its happens pretty often.
Secondly, you seem to be placing emphasis on the agent having experience with investor. I do n’t think this is important. What IS important is that the agent can assit you to neg. the purchase contract and get the deal to close. Whether its owner occupied or a rental is a minor issue in the buy/sell tranaction. Yes, there are some difference, but it not a major concern (IMHO). The agent being competent in getting the deal closed is the most important thing
If you don’t feel comfortable working with an office which is representing both sides…would you feel comfortable with a different office, but same company?
The reason I ask is; the agent who’s contacted you could still earn a referral fee if you ask her to recommend an agent–experienced working with investors–from a different office, but perhaps the same company.
Many companies have referral books which come in quite handy in similar situations.