What is a fair reward to someone who brings a suitable +ve cashflow property to us ?
I saw somewhere (cannot find the post) that someone paid $ 1,000.
I am not working an introducer but I know one thing for certain and that is that I certainly couldn’t survive on a fee of $ 1,000 considering the amount of work involved.
Let us take a look at a typical example (sorry, ‘borrowed’ from D/D’s information as best as I could obtain).
Rental Occ:100%
Purchase:$100k
Rent:$303.33 pw
Total Purchase Costs:$24127.50
Capitalised Costs:$927.50
Total funded Costs:$23200
Annual Int Only Loan:$4753.26 on LVR 80% @5.99%
Total Annual Expenses:$3050.50
=total Annual Cashflow:$7969.40
=COCR:34.35%The quoted interest rate is of course out of date and therefore the deal isn’t really the same if based on today’s interest rates.
In any event it looks pretty good to me except that I don’t have a clue which town it is, nor what the population is in the town nor do I know what the employment situation is.
It looks as if this $ 100 K property will, after paying interest on the loan, have a surplus of around $ 7,500 p.a. which looks damn good to me.
My question is what would you consider a fair remuneration for having such a deal brought to you ?
Now please. do not tell me $ 1,000 as, in my opinion, that just doesn’t make it worthwhile for the introducer.
Pisces
Pisces. a buyers agent would probably charge a fee of around 2% to 3% of purchase price, but would often reduce this as they would probably receive half of the selling agents commission.
Also, be careful that your ‘spotter’ is legally entitled to receive a commission, in the state they are in, for a real estate related transaction.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
>>Also, be careful that your ‘spotter’ is legally entitled to receive a commission, in the state they are in, for a real estate related transaction.<<
Depending on how the agreement is worded, I doubt that a (real estate agent’s) licence would be required.
Cheers,
Pisces
Pisces,
I think it’s depending on where spotter found the deal if the deal is very close to there place then it’s probably cheaper than the one that found far away.
Just a thought.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedoom]If a spotter did it for a living then I doubt he/she could survive on $ 1,000.
Just going to a town and hanging around in the area, what would that cost ? Then add the wages that person could have earned in a normal job and what have we got ?
Most people couldn’t find a good buy in one week so what does a spotter deserve for bringing a good deal to you Chan ?
Hey, come to think of it, this would be a good sticker to put on the back of one’s car : Spotters do it for a living ! [
]Pisces
Pisces,
If the spotter is a property investors then it is ok for $1000 spotter’s fees because one go around looking for best deals on the market. If one found a lot of them then one will buy the best one and past on the second, third…best for a spotter’s fees instead of through it away.
Where as if the spotter do it for a living then I will agreed with you that $1000 for spotter’s fees is a bit too less. May be spotter should charge by percentage of purchase price say 2-3%. I think it’s fair.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]What is fair remuneration isn’t necessarily the same as what you Chan wants to pay.
I guess the market will eventually determine what is an acceptable level.
Pisces
Originally posted by Pisces:What is fair remuneration isn’t necessarily the same as what you Chan wants to pay.????????
I guess the market will eventually determine what is an acceptable level. Agreed
Pisces
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]
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