Posted by Mike in WI on July 08, 2001 at 13:58:01:
Mr. Garcia,
Just wanted to let you know in case you didn’t see it…
Your reply to this posting, I believe was intended for a different message. You titled your response to “Robert”, but you posted it as a response to a inquiry by “Chris”.
Just thought I’d let you know so maybe you could repost to Robert.
~~ Mike ~~
Do you guys deal with RE agents? - Posted by Chris(N.FL)
Posted by Chris(N.FL) on July 08, 2001 at 11:32:15:
I see ads in the paper sometimes that look interesting, but I often notice that they are represented by RE agents. Do you guys ever call on such ads? If so, how do you approach the RE agent about doing “creative” financing?
Thanks,
Chris
Re: Do you guys deal with RE agents? - Posted by Ronald * Starr
Posted by Ronald * Starr on July 08, 2001 at 15:05:06:
Chris (N FL)------------
Gee, how could I know what those agents are offering?
How could you find out what they are offering?
Maybe call them up? What are you afraid they are going to do to you? Slide through the phone line, push a pen in your hand and force you to buy a house, sight unseen?
You’ll probably find that a lot of the deals don’t seem very attractive when you know more than what was in the advertisement. Don’t let that stop you. The real good deals are far and few between. You may have to search through a lot of rough rocks to find the gold nuggets. But try to be efficient. Ask questions on the phone which allow you to eliminate the not-good ones fast. Hang up, on to the next one.
As you talk to the agents, you will learn how to talk better. One may ask a couple of questions about your financial situation and then use some phrase which describes it well. You can grab that phrase and use it in future calls. This is something you can learn by doing.
That means you have to do. No DO, no dollars.
Good Investing*******Ron Starr********
Re: Do you guys deal with RE agents? - Posted by Ronald * Starr
Posted by Ronald * Starr on July 08, 2001 at 15:03:50:
Chris (N FL)------------
Gee, how could I know what those agents are offering?
How could you find out what they are offering?
Maybe call them up? What are you afraid they are going to do to you? Slide through the phone line, push a pen in your hand and force you to buy a house, sight unseen?
You’ll probably find that a lot of the deals don’t seem very attractive when you know more than what was in the advertisement. Don’t let that stop you. The real good deals are far and few between. You may have to search through a lot of rough rocks to find the gold nuggets. But try to be efficient. Ask questions on the phone which allow you to eliminate the not-good ones fast. Hang up, on to the next one.
As you talk to the agents, you will learn how to talk better. One may ask a couple of questions about you financial situation and then use some phrase which describes it well. You can grab that phrase and use it in future calls. This is something you can learn by doing.
That means you have to do. No DO, no dollars.
Good Investing*******Ron Starr********
Re: Do you guys deal with RE agents? - Posted by Ed Garcia
Posted by Ed Garcia on July 08, 2001 at 14:59:37:
Chris,
I’m sorry, I posted to your question by mistake. I was trying to answer the question above yours.
Disregard my post.
Ed Garcia
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.
Re:Do you guys deal with RE agents? - Posted by Ed Garcia
Posted by Ed Garcia on July 08, 2001 at 13:14:51:
Robert,
You really haven’t given us enough information. You ask us how you can get this house, but we don’t have any information on the house? If it’s a good buy? What is it worth? What is owed? Will the seller carry paper? Will the seller sell it on a Wrap-around? She may even consider a partnership, if you can convince her that you are going to cover the debt-service.
We also don’t have any information on you?
The fact that you mention that you want to rent it as a section 8, tells me that market rents are LOWER, or you wouldn’t be thinking the way you are. If it won’t be positive CASH FLOW with market rents, then I wouldn’t buy it.
I buy property based on economic sense, which in this case would be market rents. I want to experience cash flow and appreciation, and my concern when purchasing based on section 8 rents is that it could be in a neighborhood that will experience little or no appreciation. That’s important for financing and re-financing. Don’t get me wrong; I have no bone to pick with section 8 rents. It’s just that the proper way to analyze this is based on market rents.
If the seller carries back and you don’t have enough equity for a refi to take her out, then it’s a bad deal for both of you.
Ed Garcia
Re: Did you know - Posted by Ed Garcia
Posted by Ed Garcia on July 08, 2001 at 15:04:20:
Ed,
If my answer was a little off, it’s because I answered the question in error. I meant to answer the post above Chris’s.
But thanks for being supportive anyway, and keep up the good work,
Ed Garcia