Re: Did you know - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on July 08, 2001 at 14:01:10:
That most of the houses that are advertised in the paper, for sale; are actually for sale. An agent is in the business of selling houses, no sale, no paycheck.
So what is the problem here? There are such things as creative agents, and even creative brokers. Oh, most of us don’t have a flashing sign on our shirt that says “creative”, but perhaps we should. Some of the folks who post here are agents, and even some brokers post. I fall into the last category, if I or my agents do not sell something, then we do not get paid. Simple as that.
Listen to the advice from people like Ed Garcia. He will not steer you wrong. When I take a look at a deal I first look at the numbers, as if I had all cash (even if I do not). Does the deal make sense if I was using real money. If so then I look at financing. Where can I get it? How much will it cost me to get the money that is needed? Then I ask will the transaction “cash flow”? That is will the rent pay all the costs, and give me some kind of a cash return on my investment. If it will not then it is what we call a “negative cash flow”. I then ask is there some reason that I would want to have a negative cash flow in my portfolio? Often there is not and I determine that this is not a good deal. Once in a while there is a reason to deal with a negative cash flow, but it does entail extra risk and could leave you in a situation where you would suffer a loss. That’s no good. Just pencil the deal out. If it makes sense then continue. If not stay home.
Do not hesitate to talk with agents, after all they do have houses to sell.