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  • Profile photo of Joel.MacdonaldJoel.Macdonald
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    Guys,

    I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective.

    If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party.

    Where is the agent going to be in a 1 year from now and somethings goes wrong with the property?

    Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90’s crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn’t they be investing as well!

    Profile photo of Alex SCAlex SC
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    AREIJoel wrote:
    Guys, I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective. If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party. Where is the agent going to be in a 1 year from now and somethings goes wrong with the property? Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90's crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn't they be investing as well!

    Not sure I agree with that statement at all.  I have a great company here in Charlotte NC my properties and reputation speak for them selves. During the 80S I was just growing up born in 73.  Graduated high school in 92. So spent the next few years in school , and bartending. So to say that we don't and wont know whats going on because we were not involved in real estate in the 80S 90 S come on.

    That

    Profile photo of Alex SCAlex SC
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    When houses are not selling that is great news for investors. When people can not sell retail the investors are buying foreclosures. Which in turn keeps the prices lower for us to be able to buy some great deals.

    Myrtle beach SC picked up a 13 unit apartment building $200k off list price. That is taking in $5500 hundread a month. If any one wants to see the building and info on it . I am easy to find.

    So read the links but think out side the box is all I am saying

    Profile photo of Alex SCAlex SC
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    jayhinrichs wrote:
    couple of commnets and Ideas for those looking for representation in the US. Now full disclosure I am a Real Estate broker in 3 states and have been for 35 years with never a complaint this is public record. so I am partial to dealing with RE professionals. An agent with no complaints Really even our agent who is awesome and been same agent for 5 years runs into head aches from time to time. She is awesome and has that southern charm , so very likeable. Every house we buy comes through her no one else.

     However just B/C they are licensed does not mean they are competent in what your looking for..big difference in agents that handle income property and those that handle houses for owners… Here are a couple of tips. 1. If you have a RE agent your corresponding with…I would ask the following. Full name so I can look them up on the State DRE website on this web site you can see when they got licensed what licenses they hold and if they have ever had any complaints the nature of the complaints and if they have ever been suspended restricted or revoked. I guess I just got lucky over the years to never have a complaint, Not that I did not have my share of disputes with buyers or sellers I just was very good at resolution, This will give you a good first indicator. And you can practice on me if you wish.. at the DRE in California or Oregon or Mississippi… Jay L. Hinrichs…Take you 5 minutes to see my track record or any other agents. Most reseller ( turn Key guys are not agents and most use lic agents. Most of the companies Like Jay or other multi- market resellers use people like me. With me and other resellers I would see if they are actually buying the properties or just flipping. At the same time if just flipping who cares as long as not ridiculous mark up..

     This is critical in all states that require PM's to be RE brokers… Never hire a PM without checking out his license capacity.. I have seen so many unlicened PM's over the years its just crazy and no way of you knowing unless you ask then double check.. Many times they just have a rent a broker's license they run under.. which is legal but maybe not the best. 2. Contact local closing attorneys or title companies and ask them for names of the agents that close the most deals with them… this will give you some indication of who is doing what… Again not always the best indicator but a nice barometer… When I go into a market that I am looking at first time and its one I did not do a lot of loan business in. this would be my first step, I wanted to get to know the PLAYERS not the part timers… 3. Property management sucks and don"t care what people say.It is one of those things either for you or not for you. For me after 3 years I can say it is not for me.

     Call or contact the bigger property management firms and ask them who brings them the most clients… This will also get you leg up,, Property mangers can give you a good second opinion as well… Since all of you OZZIES are putting your eggs in the PM basket this is critical step for you… 4. I like to know that my RE agents live fairly close to what they are selling… Makes it much easier for them to do inspections and such for you. 5. LASTLY I WOULD HAVE THEM SEND YOU A SELLERS DISCLOSURE FORM THAT ALL STATES HAVE THAT IS MANDATORY FOR THE SELLERS TO FILL OUT AND DELIVER TO YOU FOR YOUR REVIEW AND APPROVAL.. I WILL BET YOU THIS IS THE MOST VIOLATED RE LAW GOING ON… NON LICESNED SELLERS WILL BLOW IT OFF OR NOT EVEN KNOW ITS A REQUIREMENT… LICENSED AGENTS SHOULD BE ABLE TO E MAIL YOU THE FORM. get familar with it so you know what to ask during your due diligence…Especially areas like Ft. Myers as was mentioned above… You want to know if its in the areas that have no public water and sewer and are on well and septic ( higher maintenance costs).. If you buying from an lic agent yes if you buying from investment team  no not needed. Clear clean title is my main concern

    These items will be clearly defined in the Sellers disclosure statement.. get one read it and use it as your due diligence guide. Caveot most state exempt banks from filling out the disclosure there is just a excluded box but they still have to give you the disclosure and there will be 50 to 75 items in check list form that you will want to know about. Any of these reselling companies SAY like TRR if they are truly the seller they need to provide a Sellers disclosure.. curious if any TRR clients are getting those or even know who is actually selling them the properties. and this goes for any other Turn Key company not just singling out TRR.  Jay maybe I am wrong but I have never seen this be needed for a cash deal. Actually for any deal that is being sold that we own and sell.

    JLH

    Profile photo of Alex SCAlex SC
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    jayhinrichs wrote:
    Mihovi These guys missed it on the second article that "Las Vegas was ahead of its foreclosures and Florida is behind because of Judicial FCL." I agree with Florida and its one reason I would never lend money there, FL and NY are absolutely the worse places in US for a lender. NV just passed senate bill 248 that brought the foreclosure sales to a halt.. r the issue of the foreclosing party to actually be in possession of the original NOTE…. Since most of these loans were sliced and diced many lenders only received their beneficial interest through an Alonge document…. Thereby precluding their power of sale in the Deed of Trust. So this has all but stopped foreclosures in Vegas… Vegas inventory is down to less than 4 weeks…. 20 offers plus per home are common etc etc… BUT: there are 250k mortgages in Vegas that are 30 days or more delinquent… Can you say Shadow Inventory…. This article is poorly researched and is not accurate… Most of these types of stories are macro and really not Germane to those of us in the trenches. JLH

    South Carolina they are just starting to release more homes. Most of these links I  used to post them from yahoo really are misleading. One can interpret things many different ways.

    Jay did you see where Detroit is going to be cutting back on street lights in certain areas. Now I never knock any markets but man lower income areas are going to be the places affected.  It was on yahoo news this past weekend .

    Profile photo of mihovimihovi
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    Alex SC wrote:
    AREIJoel wrote:
    Guys, I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective. If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party. Where is the agent going to be in a 1 year from now and somethings goes wrong with the property? Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90's crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn't they be investing as well!

    Not sure I agree with that statement at all.  I have a great company here in Charlotte NC my properties and reputation speak for them selves. During the 80S I was just growing up born in 73.  Graduated high school in 92. So spent the next few years in school , and bartending. So to say that we don't and wont know whats going on because we were not involved in real estate in the 80S 90 S come on.

    That

     If I would have started in the 80s, probably I wouldn't need to post on this Forum and Donald Trump would have to thank me for where he is now… LOL

    Profile photo of mihovimihovi
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    Lots of articles online are a little bit too general and misleading.
    And Detroit should shut off the lights on 90% of the streets..

    Profile photo of Alex SCAlex SC
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    mihovi wrote:
    Alex SC wrote:
    AREIJoel wrote:
    Guys, I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective. If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party. Where is the agent going to be in a 1 year from now and somethings goes wrong with the property? Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90's crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn't they be investing as well!

    Not sure I agree with that statement at all.  I have a great company here in Charlotte NC my properties and reputation speak for them selves. During the 80S I was just growing up born in 73.  Graduated high school in 92. So spent the next few years in school , and bartending. So to say that we don't and wont know whats going on because we were not involved in real estate in the 80S 90 S come on.

    That

     If I would have started in the 80s, probably I wouldn't need to post on this Forum and Donald Trump would have to thank me for where he is now… LOL

    80S were not a good time for me I was the Tall skinny kid who was in chess club , and smart kid. So man but 20 years forward life is good. LOL

    Where are you located at  if you dont mind me asking .

    Profile photo of mihovimihovi
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    Alex SC wrote:
    80S were not a good time for me I was the Tall skinny kid who was in chess club , and smart kid. So man but 20 years forward life is good. LOL

    Where are you located at  if you dont mind me asking .

    Right now I'm in Vancouver as I have a Chinese client for one property, but I might have to go to Detroit; some previous customers want to buy more in the area.

    Profile photo of TZTZ
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    AREIJoel wrote:
    Guys,

    I truly believe that going through an agent who relies on commissions is the wrong way to go about it from a foreign investor perspective.

    If you are going to be managing a property from so far away, then you need to align yourself with a company who is not in it for the short quick profits. Sure everyone needs to get paid, but there is a difference between going with a quick sale agent compared with a larger turnkey provider who is not only interested in the long term success of your investment but values your business relationship. It is a win win for each party.

    Where is the agent going to be in a 1 year from now and somethings goes wrong with the property?

    Research the companies that have considerable experience – Companies and experienced real estate guys who have not only seen the last boom and bust but have also gone through the 90’s crash, and if possible the 80s crash. Also, check if these same professionals are investing along side you and have skin in the game. If it such a good opportunity why wouldn’t they be investing as well!

    I don’t get the “skin in the game” point you are making – with the AREI business model it appears the investor buys AREIA’s skin in the game, would you mind clarifying? An agent’s skin in the game is their reputation and their license, should regulatory audits find that they have compromised the fiduciary obligations they owe their client by law. How do you find the turnkey provider one year from now if they are not licensed, and how do you know they are a larger, established firm with a track record? Does AREI fall into that category?

    Profile photo of Alex SCAlex SC
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    mihovi wrote:
    Lots of articles online are a little bit too general and misleading.
    And Detroit should shut off the lights on 90% of the streets..

    Scary thought about the city going to turn off the lights

    Profile photo of mihovimihovi
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    Alex SC wrote:
    mihovi wrote:
    Lots of articles online are a little bit too general and misleading.
    And Detroit should shut off the lights on 90% of the streets..

    Scary thought about the city going to turn off the lights

       Anyways, they've "turned off the lights" long time ago, and not only on the streets…

    Profile photo of Alex SCAlex SC
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    mihovi wrote:
    Alex SC wrote:
    mihovi wrote:
    Lots of articles online are a little bit too general and misleading.
    And Detroit should shut off the lights on 90% of the streets..

    Scary thought about the city going to turn off the lights

       Anyways, they've "turned off the lights" long time ago, and not only on the streets…

    So true

    Profile photo of jayhinrichsjayhinrichs
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    streamlineinvesting wrote:
    This was one of the biggest concerns we had with our agent in Florida when we got our first house. We had never met her, even though we had been dealing with her for over a year before we finally got to finalise on our first property. Towards the end there were plenty of questions between my business partner and I about can we really trust this person, how do we know this all has not been some elaborate scam? We did our best to look her up on the internet and see if there was any sort of bad news about her, we talked to people who had dealt with her before, unfortunately none of them had secured a property with her despite using other services that she offers. The biggest thing for me that let me know she was legit, was how when we had asked her about potential investment properties, she had rejected probably 90% or so of what we suggested saying they were not good investments. Not only this, but she also put her own money forward as a deposit for us on a couple properties. I guess by doing things like this, we were able to build up enough trust in her, and now it has turned into a very great business relationship.

    Could not have described myself any better than this post…. I am, we are,  all of the above with the Caveot that I was selling and buying real Estate in the late 70's to early 80's  15 to 20% interest environment.

    Profile photo of jayhinrichsjayhinrichs
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    I second Videosinspectors post,,, a good home inspector can be a key element in your decision process.

    Again not all are as good as others and you can contact…THe BB and other orginzations to check on their bonafides

    Just make sure they have insurance,,, There is a fiduciary and legal liability in the home inspection game….

    However Video,,, not only is the inspections an issue for these buyers but its really the neighborhoods that they get talked into buying in… You can have a great little brick house in Detroit but you could be in the wrong part of town which is a pretty big area. and your just going to have fits with it from a management stand point.

    And the thought that  people pay their rent just like they do in OZ is a real issue once these investor make a deal.

    The other issue with home inspectors is some just go way over board and will kill deal after deal,,, and of course not sure what you charge but here in Oregon its 350 to 500 plus per house….. And with a vacant house there can be a laundry list.

    Here is how we takle it..

    If its a big fix.. we get a home inspection for ourselves… We use this as a guideline for the Rehab crew. We have the home inspector come back in and see if any of our subs missed anything,, Its a cheap barrameter for us.

    I would think for Video to have value you need to have more than just a cut and dry report and video there needs to be clear definition of what is standard care every year and not a big deal even though you need to not it on your report to be legal..And then have that conversation with your client… But if its a lemon its a lemon and you will definatly save people from making a huge boo boo. 

    My last point and this would be good if you could touch on it….. Is what I see advertised by turn key sellers as on going maintenance costs are just so rediculously understated… It would be nice to get a fact sheet from someone like yourself. For your market , not sure where you are,, but each market is different just like weather is different in each area and their are annual things you need to do to keep your house in shape.

    Alot of these companies make the claim that because its got a fresh rehab your not going to have any maintenance cost that amount to anything in the next 2 to 5 years. And those of us that have experince here in the states know what a misleading statement that is… I mean tenants alone will do 500 a year or better in just touch up type damage, that is if your going to keep your asset in top shape…

    Your commnets on the above would be interesting I think to the group,,,, some basic maintenance items yearly and so on would be good to share.

    Profile photo of mihovimihovi
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    I second Jay on his qualified thoughts about the inspection
    All the sellers should have VIDEO inspections (HD if possible) and use qualified personnel for the property inspection.
    The inspection should include the heigbourhood, if possible, if not at least the block surrounding the property. Also, the result of the final inspection should be totally disclosed to the potential buyers. (send a copy ). There are 2 types of inspections: one  done by the city, as required by the closing procedure and the REAL one (which can be a lot tougher and more realistic) done at the buyer's request and using a different LICENSED company. Each state and city has different requirements; for example in Detroit it is mandatory the "paint lead " inspection, which costs around $385 and is done by licensed companies only for this task.
    The maintenance is another problem. Personally, I recommend  for a full renovation the replacement of the old Water Heater Tank and the furnace with brand new ones, even if they are less than 5 years old. On a property I sold this week I replaced the furnace with a brand new one, the house was empty for almost 2 month and when the new tenant moved in the flame sensor had to be replaced because it malfunctioned. No more maintenance costs for a full year after that. The rest of the issues which can appear are usually because of the quality of the reno. If the electrical, mechanical and water systems are new , there is no reason to be afraid of future high maintenance costs for 2-4 years. That's my opinion. Somebody else?

    Profile photo of jayhinrichsjayhinrichs
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    Mihovi,

    since TWH owns all its properties that is our SOP's ,,, new plumbing electrial roof,, hvac, condenser unit. all major componants new upon the first rehab… Even with that we spend an average of 1k per house per year minimum.. then add in vacancy which we all have a little of that,,, Of course with our volume its much less acute… But you take someone with one or 2 homes and if they have a vacency thay are 100% vacant or 50%.

    Got to love Detroit,,,, with their inspectoins.. they nail you on the water too.

    Also since I bought my own hardware distributor company we put all new hardware plumbing sets light fans everything is new.
    Our houses are pretty dialed in for a cost no one else in the industry can do it. for…. We buy virtually everything manufactor direct.
    one of the best companies I have bought in the last few years… very exciting seeing all our products getting shipped all over the world…

    I was in bermuda last week and we are going to start suppling contractors there.

    JLH

    Profile photo of Alex SCAlex SC
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    jayhinrichs wrote:
    I second Videosinspectors post,,, a good home inspector can be a key element in your decision process.

    Again not all are as good as others and you can contact…THe BB and other orginzations to check on their bonafides

    Just make sure they have insurance,,, There is a fiduciary and legal liability in the home inspection game….

    However Video,,, not only is the inspections an issue for these buyers but its really the neighborhoods that they get talked into buying in… You can have a great little brick house in Detroit but you could be in the wrong part of town which is a pretty big area. and your just going to have fits with it from a management stand point. This is why flying to an area is so important.I can go some where and do a video at 1pm and make thins look great. Then same area could be a war zone..

    And the thought that  people pay their rent just like they do in OZ is a real issue once these investor make a deal.

    The other issue with home inspectors is some just go way over board and will kill deal after deal,,, and of course not sure what you charge but here in Oregon its 350 to 500 plus per house….. And with a vacant house there can be a laundry list. We pay $450 inspections as you said Jay good tool for us to get out their and judge rehab.

    Here is how we takle it..

    If its a big fix.. we get a home inspection for ourselves ( he does the work if small job for us and minimal charge good guy we use … We use this as a guideline for the Rehab crew. We have the home inspector come back in and see if any of our subs missed anything,, Its a cheap barrameter for us. We do  a before and after inspection this usually knocks out all questions and show repairs that were needed and completed.

    I would think for Video to have value you need to have more than just a cut and dry report and video there needs to be clear definition of what is standard care every year and not a big deal even though you need to not it on your report to be legal..And then have that conversation with your client… But if its a lemon its a lemon and you will definatly save people from making a huge boo boo.   Lemons or lemons can't argue there…

    My last point and this would be good if you could touch on it….. Is what I see advertised by turn key sellers as on going maintenance costs are just so rediculously understated… It would be nice to get a fact sheet from someone like yourself. For your market , not sure where you are,, but each market is different just like weather is different in each area and their are annual things you need to do to keep your house in shape. Renters just do not take care of properties I don't care what every one is saying .So repairs are going to be higher then what most are saying.

    Alot of these companies make the claim that because its got a fresh rehab your not going to have any maintenance cost that amount to anything in the next 2 to 5 years. And those of us that have experince here in the states know what a misleading statement that is… I mean tenants alone will do 500 a year or better in just touch up type damage, that is if your going to keep your asset in top shape… or Jay we could be like most companies up the price by $15k and offer GUARENTEED RENT FOR @ YEARS) what happens after 2 years and what happens when you over pay some thing to think about .

    Your commnets on the above would be interesting I think to the group,,,, some basic maintenance items yearly and so on would be good to share. Jay my own personal properties cost me an arm and leg but I choose to keep them looking a certain standard. This is my own personal decision, but renters ( mind set is what no one is discussing here) they do not think like home owners or very few do.

    Profile photo of Alex SCAlex SC
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    Could not have described myself any better than this post…. I am, we are,  all of the above with the Caveot that I was selling and buying real Estate in the late 70's to early 80's  15 to 20% interest environment.[/quote

    ]Jay not fair in 1980 I was 7 years old.  I was selling lemonade and painted rocks.  Had a stand out side my parents yard, underneath the  big tree. That was my first business ,real estate was not on my mind at the time.( just yet ) LOL

    Hope people sense I do have a humorous side not just business all the time.

    Profile photo of mattstamattsta
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    I agree with everyone else who has posted. Be extremely cautious when purchasing on the internet. I would suggest finding and contacting a US real estate agency for its validity. Or if you have any friends in the US (or friends with friends in the US), you could get them to do this for you.

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