I like her style! his she cute and single?

I've been a broker for 15 years now. i do 12-18 million a year in sales, only did 8 last year, mostly residential, but a good chunk of multifamily. all the real money i've made is on my personal re investments. i agree that 98% of agents don't have a clue when it comes to rei, which boogles my mind. i do give alot of great deals out to clients for the same reaons as your realtor friend. i just can't do them all. it seems like i wont see a deal i like for 6 motnhs or more and then BOOM! i've got 4 great deals on my desk.

If you do 8 million a year insales, does that mean you make 6% commission on that 8 million? So you would have made $480,000 minus expenses and taxes? If that is right.. then good job hahah.

The selling agent and the buyer's agent split the commission. Also average commissions aren't really 6% anymore (this varies by location), more usually 4-5% on average. So think more along the lines of 2-2.5% if he's either the buying agent or selling agent on 8 million in deals. Then you have to pay your office/broker a cut of that.

He said he is the broker though, so I guess these are his own sales over and above the agents' sales in his office.

Thanks for the info.

It totally slipped my mind that the buyers/seller splits the commission.

spex-amazing thread, and I'm only half-way through. Can I bother you with a little analysis on my behalf? I just recently came into some money via my company stock package, and will have $210K after taxes within the next month. After clearing all debt (credit cards, student loans), I'll be left with $180K. My income is $160K base salary, with bonus based on performance.

My wife and I have our eyes on a single family house we'd like to make an offer on for our primary residence. Currently renting at $1300/month and can afford housing related costs (mortgage, insurance, taxes, utilities) of $4500/month. There is a house on the market asking price of $760K which we'd like to offer $700K, with $80K down. The taxes are $7K per year.

Can you please provide likely monthly payments if the offer is accepted? Also, with the remaining $100K, we are contemplating investing in RE via a multi-family in the same area. (We live in greater Boston, MA)

Any thoughts/reactions/guidance would be appreciated. We would love to live in this house if the admittedly low offer is accepted--we'd live there for 10+ years. I guess the crux of the question is if we can put $80K down and only have to ~4500/month for mortgage/taxes/insurance/utilities?

Thanks much!

Go to www.bankrate.com and you can get insurance info, mortgage payment calculators, interest rates for jumbos, and everything else. It looks like $560k (20% down) at 6.5% is going to cost you $3539 per month. Then you've got taxes, which will probably increase after the sale. Currently they're like $600/mo. Then you've got insurance, maintenance, etc.

I don't think that you can afford this property. Depending on your other expenses, I don't think that with $80k down you can afford any more than about $670k. I used this tool to determine that number http://www.bankrate.com/brm/calc/new...calculator.asp

Where in the Boston area are you looking? I own some real estate in the area (investment though, not primary) and might be able to give some advice. But I generally agree with Spex here looks like you are looking at a house that you cannot afford right now. Where do you work? How stable/size is your bonus going to be every year? Do you really need a 700k house? Maybe something smaller might do? Even if you can afford the 1300 to 4500 jump doesn't mean that you should do it. And investing in a 2nd property right away seems like biting off way too much RE at once. I'd get used to owning one house and mix in some other investments. Also in this environment even high credit buyers might be forced to put 20% down. A 550-600k house with 20% down seems alot more feasible.

Steve

Spex,

if one was to want to aquire a large multi family portofolio, 1000+ units. where would you start to look at? i was think about placing an ad in the wsj. i realize you could just buy individual properties but i think it would be more attractive to try and aquire a large existing portfolio. i'd appreciate you thoughts. thanks.

I like this advice for this poster. IMO, it'd be way better for this poster to get a decent house for much cheaper. Live lean and build for the future. I don't know the market in Boston at all. But I have to assume that $700k, even in Boston, is leaning toward the upper end of properties.

If you buy a $700k house with a $160k income, you'll spend your life working for that house. I'd rather see you working for yourself, i.e., working hard now so that later on you'll have more time. Time is your only real commodity.

I think your unlikely to get any hits from a WSJ add for a portfolio that size. Something of that size would be handled by one of the large commercial real estate brokers such as CB richard ellis, and them and other similar companies is where I'd start

Steve

Man, I'm way out of my league when you start talking about 1000 units. Goddam, that is a REIT-style investment size. Your best bet is probably loopnet.com. A cursory look there found me several packages that size. Obv this is not something that you're going to get from a local investor. But really you're by far asking the wrong guy.

I thought this one looked kinda sweet based on a 30 second glance at the listing.

http://www.loopnet.com/xNet/MainSite...&PgCxtDir=Down

out of my league as well. someone sent me this deal yesterday

PP $64,278,600 (1061) Units (8) property package; NOI:

$4,060,755; cap rate: 6.27% 98% occupancy all in Central Florida.

MULTIFAMILY UNITS APARTMENTS

Florida 270 Units (5) Developments BPO $136,500,000 LTV 55

+3 SFR, $79,170,000 net, ($293,222 av. per unit) All under two years old.

If your interested I can give you contacts for the deal to find more info.

Thanks for the replies gents--yeah, it's a tough decision. We've been looking at anywhere from $500K up to $700K+ and the problem is that where we've been looking (Watertown, Belmont) the lower end of the range needs a lot of repairs. It could be that the locations we're looking at right now are simply too high for our price range, but it makes me wonder how the heck most people in Boston can afford to buy a house in their target market unless they're making $300K+. I'll check out the sites linked, and proceed from there...also will hold off on additional RE investments for now until I understand the process/dynamics further.

I know watertown/belmont fairly well. I own real estate in Allston/Brighton and my business partner and his family live in both areas and own real estate in both areas. Yeah 700k for a house is the market in those areas, but I just think you'll be living outside your means on that kind of money. The cost of renting is alot cheaper in those areas their rentals comped to house values is a wide gap. I think you'd be better of renting something nicer/bigger then what you have in that area, or look for a smaller house or possibly a condo (although I know there are pratically no condos in belmont and just a few in watertown). I had seen some nice listings for some new townhouses in watertown in the 500k range that might work for you. Watertown is slightly cheaper them most of belmont I think, and has a better location unless you want to be closer to cambridge and the northern side of greater boston

Steve

I am considering purchasing residential rental property in New York. I would like to start looking look in neighborhoods where the property cost to rental value ratio is favorable. Where can I find statistics on this by neighborhood?

I don't know, sorry.

Have you thought about Arlington or Lexington? Right now I would look at anything up to 650k and expect to be able to get it at 85-90% listing price.

Also, we live in west roxbury and the "nice" houses are in the range you are talking or higher. Take a hard look at the ones that need repairs as many times those sellers are willing to negotiate knowing they have an issue. That's what we did.

offer them a certain price with a cash back at closing for the work that needs to be done. Sellers will often overpay for that option because they don't have the cash to make the improvements before they sell or they don't want to deal with it. poor planning by them but very common none the less.

Hi everyone,

Im looking at my estimated closing costs for a $ 50, 000 house and the final number seems way too high.

Here are some of the bigger numbers from the sheet my mortgage broker sent me:

I/ Items Payable in Collection with Loan:
* Appraisal Fee: $350
* Mortgage Broker Fee @ 1.000%: $495
* Tax Related Service Fee: $75
* Processing Fee: $630
* Underwriting Fee: $750
* Administration Fee - Windsor: $495

II/ Title Charges
* Closing or Escrow Fee: $150
* Document Preparation Fee: $125
* Attorney Fee: $150
* Title Insurance: $310
Abstract or Title Search: $325
Final Report: $100

III/ Government Recording & Transfer Charges:
* Recording Fee: $ 85
* Oklahoma County Tax: $55

IV/ Item Required by Lender to be Paid in Advance:
* Interest for 15 days @ 9.4 per day: $142
* Harzard Insurance Premium: $960

V/ Reserves Deposited with Lender:
* Harzard Insurance Premium 2 months @ 80.00 per month: $160
* Taxes and Assessment Reserves 7 months @ 62.50 per month: $ 437.50

These are all of the major costs. The total adds up to $5779

*** I'm putting 10% down 30 years @ 7%.

I'd would like to see what's wrong with those numbers above. Which costs can be negotiable?

Thank You

-Nathan

I/ Items Payable in Collection with Loan:
* Appraisal Fee: $350
* Mortgage Broker Fee @ 1.000%: $495
* Tax Related Service Fee: $75
* Processing Fee: $630
* Underwriting Fee: $750
* Administration Fee - Windsor: $495

II/ Title Charges
* Closing or Escrow Fee: $150
* Document Preparation Fee: $125
* Attorney Fee: $150
* Title Insurance: $310
Abstract or Title Search: $325
Final Report: $100

III/ Government Recording & Transfer Charges:
* Recording Fee: $ 85
* Oklahoma County Tax: $55

IV/ Item Required by Lender to be Paid in Advance:
* Interest for 15 days @ 9.4 per day: $142
* Harzard Insurance Premium: $960[/I]

V/ Reserves Deposited with Lender:
* Harzard Insurance Premium 2 months @ 80.00 per month: $160
* Taxes and Assessment Reserves 7 months @ 62.50 per month: $ 437.50

These are all of the major costs. The total adds up to $5779

*** I'm putting 10% down 30 years @ 7%.

I'd would like to see what's wrong with those numbers above. Which costs can be negotiable?

I bolded the fees that are your best shot at negotiating. (non-recurring closing costs) The broker fee is related to your rate. You can probably get this removed, but it will likely affect your rate.

That's kind of a crappy situation with all those three fees. Usually you get 1 or 2 of them, but all 3 kinda sucks. They might be able to get a small reduction in them. I went through the same thing as you last fall. "small" loans are a pain. You almost always have to pay a premium for loans under 50-80k depending on the lender, and not all lenders want them. From their point of view they are doing about the same work as they do on a 200k loan for 1.4 the money. Thats why the set fee amounts. Those fees are probably the same for a 200k loan as well. So it makes small loans have really high % closing costs. Also the extra fees in title are because OK is an abstract state which basically means the lawyers in the state have been able to protect their cash cow so you have to pay a couple hundred extra in fees on every sale there. Maybe get a quote from a big bank and compare it? Or use it to negotiate down some fees.

I underlined your paying in advance for things fees. These are things that you normally would pay spread out over the first year, but they want them pay upfront. Thats section 4 and 5.


As an aside:
Wow about ~5 pts in fees in section 1, and a 7% return. I should figure out how to lend out my 401k to properties like these...... Thats like 8% over the first 5 years secured by a house.

Roll some of your 401K into a self directed IRA and you can loan on these all day. Hopefully there will be a hard money lending thread coming up soon.

What a tease.

I went to another bank and they gave me a 3.2k in closing costs (almost 45% cheaper). thanks guys.

What do you guys think about his Mobile Home Deal?

Here is the ads:
$3000 2 BEDROOM & 2 BATH TRALIER 14X70
A FRIEND OF MINE LOST HER HUSBAND
AND SHE WOULD LIKE TO SELL THERE MOBLIE HOME
ITS A 2 BEDROOM AND 2 BATH 14X70
ALREADY SET UP IN PARK WITH DOUBLE LOT
IT IS MOVE IN READY OWN THING IT NEEDS IT CARPET
IT HAS A SHED FOR STORAGE THE DOUBLE LOT IS ONLY 140.00 A MONTH

I actually drove by it today but no one was there. Looks like it's in decent/livable shape from the outside.

140/mo is good for lot rent.

Carpet is expensive. Get 'lightly used' carpet off Craigslist and get a carpet layer (also from Craigslist) to do the whole thing for $75. Don't put padding underneath the carpet. Alternately, make friends with some of the carpet layers from a carpet place. They might want extra work on the weekends, and you can cut out their boss.

2/2's don't sell as fast, or for as much, as 3/2's. Get a feel for the market (how fast do 2/2's sell in your area at differing price ranges?) before you do anything. There is no such thing as a once in a lifetime deal.

In my area, for instance, there are a good number of 2/2's listed between $2500 and $4k. That said, 3k would never work for me in this area/market.

GL and keep us posted.

spex -

I haven't finished the thread yet so I'm sorry if this has been covered.

My question is simply what are some good ways of finding commerical properties that are up for sale?