OfflineIm just getting started and I have information on Real Estate agents and Mortgage Brokers in my area and I am going to be sending out letters to them to find one. My biggest question to everyone here is. Who pays these people for doing the work? Does it come out of my profit or need to add to the profit?
For example, If I find a house for $150,000 and buy it for $90,000. Then sell the contract to someone for $100,000. Ill have the real estate agent do his work, but in the end does his % come from the 10,000 I made or does the seller or buyer pay for his work?
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Mortgage brokers get paid when you do business with them (getting a loan, helping tenant buyers get loans, giving them referrals, etc.)
Real estate agents get paid from the sellers funds normaly, but when it's a bank reo, banks won't compenszate realtors very well. So, you offer them a little more % of the deal as long as you still work the numbers. If it's a FSBO house, you can offer them just about anything (because they provided you with cma's & other info).
Contractors get paid when they get to do the job, and/or when you give them referrals.
Lawyers get paid when you use them to buy a house, or do a lease option deal, which usually comes out of one or the other's proceeds on closing.
If I can remember anything else to add, I'll post later. I hope this helps you, too.
For example, If I find a house for $150,000 and buy it for $90,000. Then sell the contract to someone for $100,000. Ill have the real estate agent do his work, but in the end does his % come from the 10,000 I made or does the seller or buyer pay for his work?
When you purchase you do not pay ...when you sell you do.
Barbara
thanks really appreciate the help. Doing this by myself is tough when you dont know anything about real estate. Until I make my first deal go threw I cant pay for the success acadamy so im on my own until i get my first.
Sellers pay real estate agents out of the proceeds from the sell of the property, with some exceptions. Such an exception would be if you were to hire someone to find you a house, that person would be acting as a buyer's agent, and you would pay them. In investing, if you are paying them to go out and find properties that are not listed with another agent, you would need to pay them. If you hiring them to research a properties, represent you at auction, etc., you would need to pay them. They may also get paid by the seller, too.
Who pays closing costs, if any, is negotiable. Most of the time, they are paid by the buyer, although the seller may share the cost or cover them in full.
Attorneys are paid by whomever retains them for whatever they are retained for.
Simply put, agents and attorneys are paid by whomever retains them, unless it's a traditional real estate deal. If a seller has signed a Sellers Representation Agreement and listed their house for sell with an agency, then the seller has agreed to pay the buyer's agent, as well, if the buyer has an agent.
I agree with "thishousebuyer" 100%. Banks don't have an agreement with your agent to pay them anything, so they have no obligation to do so. You would need to pay your buyer's agent to represent you in an REO transaction, auctions, etc.
I'll note one more thing. A savvy real estate agent, like me, can do far more for you as an investor than the things I've mentioned herein. They can oversee the whole flip for you from start to finish, including hiring contractors, attorneys, etc. They can act as a partner/finder, and then you and they split the profits on resell. Then, the agent can also resell the property for you (market it), and then they can get an added commission on the back end, if agreed to. If this is the arrangement, a profit sharing agreement of 60/40 or 70/30 is common. If you are funding the whole deal (purchase, interim costs, repairs, commissions, etc), and they are doing all of the work, then you would get 60 or 70% of the profit at resell and they would get 40 or 30 percent. I have yet to find anyone like that here at DG, because most "investors" here have no money to invest with.
Rick Allison, Realtor
Amarillo, Texas USA
Find comps, private lenders and cash buyers nationwide: www.TheRealEstate.PRO
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right now Im only going to be dealing with ways to lock in prices and sell the houses to an investor since the only thing to my name is a lousy $200 I cant invest into anything now but will consider in the future. Thats why I was wondering how people got paid. Thanks for the info guys, this is awsome. Im sure once I get over the first deal itll be alot clearer.
You can use what you have in a variety of ways. See if the local rei club will let you check out a meeting for free. Post a message on Craigslist or make a meetup.com group specifically for your local area, for investors to meet. It can be a few, and it can even be a a local Dennys, Ihop, Golden corral, or something. Get to know them (network), and tell them a little about you. I know having a part-time job doesn't seem like it does much, but it's atleast something to go on. If you get creative with the money you have, it will go far.
Steph Davis has some good pointers, too. She answered a question with what she would do if she had 30 days to make deals happen in a new town or city. Check out her videos on Youtube. There are also a lot of great info you can find right here on the DG.com website.
Bandit signs are expensive but if you can shop around and maybe ask for scrap pieces from the local sign shop, those will work, too. Ebay is having some sales on bandit signs, too. Yellow, 18x24 with a black magnum sharpie is what you need. Also, if you can find it on here, Randy has some great ideas on bandit signs he makes on the cheap. He makes his own signs.
Get you some google voicemail numbers ~ they are Free and you can get local numbers which I recommend. People can also send you text messages through google voice, too. You can only leave a 1 minute greeting for your callers, but I've posted a couple 1 minute scripts on here somewhere you or others can use.
Check out Mailchimp ~ you can send free newsletters to your buyers or sellers that way. There are a lot of free things you can do, it's all about trying to think outside the box. If I can think of any more tips, I'll post here. Whatever you do, don't give up!
wow thanks man. im on it now going to check out those sites and utilize those tools.
Thinking outside the box is the name of the game, here. You wanna be thinking of things you can do, other than your competition. Think about having a hat or shirt made with you we buy houses message. You could also make bumper stickers ~ somebody did it on here, and it worked for them. Car magnet signs would work, too. (You can get the material to make your own at home. Try the same concept with the yellow and black lettering. Vinyl letting might work on your car/truck, too. Think about making home made post-it notes with a premade stamp and cheap post-it notes ~ them stick them just about anywhere (atm's, drive throughs, etc. where people go) ~ I've heard this method works good, too.
Talking houses might work for selling the houses, if the owner will let you put one in.