Home Buying in Portsmouth>Question Details

Scott, Home Buyer in Suffolk, VA

Are there professionals that work with small income property investors? What's a fair way to compensate an agent for finding me properties?

Asked by Scott, Suffolk, VA Fri Oct 14, 2011

I am just breaking in to property investing and need professional help. I know that the work involved in purchasing a sub-$100K home is the same as a luxury home, but with a lot less commission. Because of this, I've had difficulty in finding professionals that can/want to help me. What are some ideas to fairly compensate an agent's work for helping me to identify properties and get the best price for them? How do I find professionals that have real experience working with investors in Hampton Roads? thanks

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Joe McAvoy’s answer
Hi Ginny,

I'd like to seriously consider hiring you as my buyer's agent for investment properties in your area. Will you please send me the best investment opportunities you have, listed or not. I plan to ask you to write very low offers on multiple properties at purchase prices that average around $40,000 or $50,000. I will gladly listen to your advice on what price to offer, but will expect you to regularly write offers that are no more than 50% of list price and I will rarely negotiate beyond the first offer.

Since price is of no matter to you, I have no problem signing an exclusive buyer reprepresentation agreement with you that includes no deposit and no payment by me at settlement. Your commission will be the offered amount through the MLS or zero dollars in the case of unlisted properties. However, I trust you'll apply the best of your time and 20-years expertise to serve me anyway.

Our agreement will require that you send all investment opportunities to me exclusively, even if you have other clients expecting your delivery of investment opportunities. The term can be for as long as you can bear, the longer the better for me.

Please let me know what I can do to get started. I have great hopes in my investment success through your dilligent efforts and I'm sure you do as well.
2 votes Thank Flag Link Sat Oct 15, 2011
BEST ANSWER
Hi Scott,

I just got off the phone with a beginner investor who is looking to pay cash for fixer-uppers. He's wants to spend no more than $20,000 per property and plans to rent them after the renovation.

It can take multiple property showings and several offers to get an investor the right property for the right price. As you realize, so almost needless to say, the real estate commission at settlement to an agent would be negligible compared to the agent's contributions in time, expertise, and travel expense. Additionally, most agents have a commission split that goes to their broker and leaves them with perhaps 50 to 80% of the total commission.

As Steffy explained below, there are ways to attract an agent who has experience ferretting out investor bargains. Each of them has its advantages and disadvantages.

You can form an exclusive buyer-representation agreement that binds the agent to perform specific services on your behalf and obligates you to a pay a real estate fee. Typically a non-refundable deposit secures the agreement. The deposit is applied toward the total real estate fee due at settlement.

Also, you can find an agent who is willing to partner with you as an owner/investor in the project. A portion of the profit from the resale proceeds or future rental cash flow would serve as compensation for his/her services and expertise. An excellent way to ensure you are getting the best advice, the best investment opportunities, and assistance in the project from start to finish is to partner with your agent—ask him/her have a stake in the project’s success or lack thereof.

I have investor clients who engage my services using both of these options. Feel free to call me with further questions and discuss the possibilities of working together. My mobile number is 757-268-5123. Also, you may click on the link below if you want to review my profile and professional services.

All the best, Joe McAvoy
0 votes Thank Flag Link Fri Oct 14, 2011
Scott,
I would suggest that you interview a few agents and discuss your needs with them. They may offer you a Buyer Broker agreement which lists specific tasks they will perform for you, and their compensation may include initial consultation fee (non-refundable or credited towards any compensation due at closing ), a flat fee paid by the Buyer at closing plus commission paid by the seller.
Good luck in your investment property search!
Web Reference: http://www.talktosteffy.com
1 vote Thank Flag Link Fri Oct 14, 2011
You may just have to call around a bit but I'm sure you can find a local agent who specializes in just this sort of investing. Google it if you have too and you should have many options
0 votes Thank Flag Link Sat Oct 15, 2011
Scott-Thank you for allowing me to be your agent-I do have to talk with you and again I can be reached at 757-4881999-8:00 a.m. tomorrow would be great or you may email me at ginnymorincollins@williamewood.com with your email address and we will get started.Looking forward to working with you-Thank you-Respectfully,Ginny
0 votes Thank Flag Link Sat Oct 15, 2011
By the way Scott, you can contact me at my office at 757-748-6318/905-2824/905-7034. you will be glad you did.
0 votes Thank Flag Link Sat Oct 15, 2011
Hello Scott,
A very good question and one that many investors(small) are faced with. While this may seem unfortunate, a number of small points need to be made. Scott you are about to enter a business and therefore it is going to require that each and every one of your associates, at whatever level, be treated in a business like manner. Each has a job to do and should be treated fairly. Many times we as realtors are approached and begin the process only to find that as soon as we forward some information that the client can use, he/she disappears. This should not be. If you are in business, value the efforts of others.
A Listing normally goes at about 3% for each side; ie the Buyer and the person listing the property. It is possible to negotiate this rate down a little if you are now starting out and funds are somewhat tight but in every case, treat your agent fairly and he/she will understand and will work with you. We at MCA real estate services do this all the time and would be glad to assist.
Good luck in your endeavors Scott.
0 votes Thank Flag Link Sat Oct 15, 2011
Scott -I have been in the business over 20 years in this area-It's not the price at all -its lining up your clients for their goals and sincerely helping them the best you can-if I can be of help you may reach me at 757-4881999-Looking forward to hearing from you-Ginny
0 votes Thank Flag Link Sat Oct 15, 2011
Hi Scott,
I applaud your inclination to become an investor and for seeking advise. As a real estate professional who specializes in a specific area (Portsmouth), my suggestion lends itself to finding agents who work areas you are most wanting to own in. Usually an agent who specializes has better insight to property condition/value as they see these properties over the years. Also, I recommend that you use an agent who also has a portfolio and knows the benefits and pitfalls of your new venture. To expand on the need for a buyer/broker agreement: with it, your agent is then empowered to perform the due diligence process on your behalf, commission is then certainly the end result of finding the property that best suits your objective. That agreement can be for one property or a time frame. TRIG is a great local real estate investment club.
0 votes Thank Flag Link Fri Oct 14, 2011
Good afternoon Scott,

There are plenty of Real Estate agents that work with investors. The way they are compensated is by commission on the sale of the home you are purchasing, usually 3%. Just as the agent from Arizona pointed out, there is a contract that states the responsiblities of the agent and the buyer. Most agents will require this to insure that they do receive a commission for their services. The commission comes out of closing and is usually paid by the seller. I would suggest you interview a few agents to discuss exactly what you are looking for in one. I am an agent with Keller Williams Realty and I would be more than happy to help you in your new endevour. Or, if you just have any questions that may need answering. You can contact me at rebeccathomas1212@gmail.com, or 757.383.2070. Thank you for your question and have a great day.

Rebecca Thomas, Realtor
Keller Williams Realty Greenbrier
1100 Volvo Pkwy Suite 200
Chesapeake VA 23320
757.383.2070
rebeccathomas1212@gmail.com
0 votes Thank Flag Link Fri Oct 14, 2011
Get involved with one of the REI clubs in your area. I'm aware of several good ones in the Hampton Roads area. Connect with some of the investors there who also are buying properties at similar price points, and ask them for some referrals.

You also might want to work with some wholesalers.
0 votes Thank Flag Link Fri Oct 14, 2011
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