Malama Realty | Real Estate Advisors

Posts Tagged ‘MLS’

Why would you buy investment property without seeing it? It’s a numbers game. Whether or not you see the property before you make an offer isn’t nearly as important as making sure the numbers make sense.

A man in California used to just send out offers on a hundred MLS listings at a time, offering 25% less than the asking price on each one. Occasionally a few sellers would accept his offers. He never had to look at the homes beforehand. Including an “inspection and approval” clause in the offer meant he could always back out of the deal later when he saw the house. Meanwhile, he efficiently found the truly motivated sellers.

This true story demonstrates that with a good clause or two in the contract, you don’t have to worry about making an offer before you see a property. It’s true when you buy investment property or your next home. When it isn’t everything the seller says it is, you can reject the deal with little or no loss. So why wouldn’t you want to look at the property?

<b>Buy Investment Property By Numbers</b>

The main reason you might skip looking at a property before making an offer is time. This is certainly true if the property is far away. If you don’t get a price that makes sense, why spend your time traveling to look at real estate investments? A price and terms that make sense – this is what is important. Of course you’ll probably want to look at the actual property eventually, but looking at the numbers is how you invest.

Investors value income property according to current cash flow (or should if they want safe and viable investments), so start by verifying income. Get the actual income figures for the past 12 months. Always consider the potential income if rents are raised, vending machines are added, etc., but base your offer on the current income.

Verify all expenses with investment properties. If any expenses listed by the seller seem unusually low, they most likely are. Just substitute your own best guess in place of any suspicious numbers.

After you determine the net operating income, apply the appropriate capitalization rate to arrive at the value. If you’re not sure how to do this, get help. However, you really should understand the principle of how to figure a cap rate. This is a numbers game you’re playing.
Calculate loan payments (talk to your banker), and see how much cash flow you’ll have. Then you can figure your cash-on-cash return based on how much of your own money you put into the deal. Just divide the cash flow by your investment.

When the numbers work, you can safely make an offer. Inspections will tell you if there are problems that will affect the cash flow. You can always renegotiate if there are such problems (assuming you made your approval of all inspections a contingency of the offer). Of course, you can even go take a look now that you are truly ready to buy that investment property.

Searching for a home is becoming easier every day with more access to web sites across the country Realtor.com is the king of real estate listings. There are real estate company sites such as ColdwellBanker.com and Remax.com where you can access the local affiliates and all their listings in the US, Canada, or International. Or a little back door play is to go to the state board of realtors where they list all the local realtor boards and the local MLS sites.

1.Realtor.com – The number 1 real estate web site bar none. It is comprised of all the local MLS realtor board listings. It has all the visual and virtual tours and more photos than the local MLS systems allow. Local real estate agents will pay to get good positioning on the webpages for advertising when their local area is requested you see them first or at least in the top six. You can also request information about any of the listings on the site and you will normally receive a response within 24 to 48 hours from the better agents. One draw back is that realtor.com is sometimes 3 to 5 days behind the actual listing date.

2.ColdwellBanker.com – The number 2 real estate web site. Has easy access to its real estate listings around the world. The “Personal Retriever” feature allows you to enter in your criteria and will notify you of any updates or new listing you can select to have the emails sent daily or weekly. Coldwell Bankers “Lead Router” system is state of the art in high tech features when you request information on any of their listings your request goes one stop and then directly to the agent’s phone who listed the home. During normal business hours you should get a return call within minutes with all the up to date information directly from the listing agent. No other real estate company or lead source has anything that approaches this system.

3.Remax.com – The number 3 real estate web site behind ColdwellBanker.com. Still has a long way to go your basic site allows you to search listings has local information available from the local franchise sites. Doesn’t approach anything like the “Lead Router” or “Personal Retriever” of ColdwellBanker.com. You can get easy access to their Remax listings.

4.Realtor Pay for Leads Sites –These companies sell you to real estate agents and mortgage brokers. You log on to the web site select the city and the zip code where you want to buy or sell a house and enter all your required personal information. The agents who have paid for you at $200, $400, $600 per month or $40 to $80 per lead decide based on your zip code and price range if they want to work with you in buying or selling a home. The pitch to you is that you pick the agent and there is a little truth to that because you do get to chose between 2 or 3 agents. The fact is that many people filling out all this personal information don’t get to choose an agent at all. The agents don’t take the leads because you are either buying or selling in the wrong price range or zip code. Its one of those little steering or redlining things that slips under the federal and state government’s radar.

5.Realtor Association and MLS – Searching local realtor associations by entering a search by state for realtor association this will bring up the state association and all the local associations within the state. Then you will have access to the public side of the local MLS. Some are now directing you to Realtor.com to see the listings.

6.All the Other Sites – Miscellaneous sites, sale by owner sites, agent sites, smaller real estate company sites, local company sites all have useful features but can’t give you everything you are looking for.

7.Your Real Estate Agent - When you get down to working with an agent, the internet savvy agent will have all you need. They will set you up on a VIP Buyer or Seller program very similar to Coldwell Banker’s “Personal Retriever” and your access to your agent will be better than “Lead Router” because you will have all of the agents contact numbers.

Searching for your home on the internet can be easy if you take your time and don’t get sucked into any on-line site that sells you and your information to the highest bidder. Remember local Chambers of Commerce, School Districts, and City web sites have great information about the local area. Keep a file in your favorites of all the websites you find useful.

I didn’t undеrstаnd thе concеpt of а rеаl еstаtе tеаm аt first, so I hаd а hаrd timе with rеаl еstаtе invеstmеnt. I tеndеd to bе а “lonе wolf,” trying to do too much mysеlf. I hаvе sincе lеаrnеd thаt in rеаl еstаtе, you nееd а tеаm of pеoplе you cаn trust аnd rеly on. Hеrе аrе somе possiblе tеаm mеmbеrs, аnd whаt thеy nееd to bе on thе tеаm.

1. A mortgаgе brokеr or bаnkеr. A brokеr cаn offеr mаny options, but а bаnkеr cаn mаkе thе loаn dеcision. Thеy еаch hаvе thеir аdvаntаgеs, аnd you could usе both on your tеаm. In еithеr cаsе it’s importаnt thеy undеrstаnd whаt you wаnt (fаst closings, lowеr intеrеst, corporаtе loаns?)

2. An аccountаnt or bookkееpеr. To kееp propеr books for rеаl еstаtе invеstmеnts is gеtting morе complicаtеd with аll thе tаx-lаw chаngеs. Find somеonе thаt undеrstаnds thе lаw, аnd undеrstаnds whаt you wаnt.

3. A rеаl еstаtе аttornеy. Find somеonе fаmiliаr with thе lаws аnd lеgаl customs of your аrеа, аnd thаt hаs еxpеriеncе with thе typе of dеаls you intеnd to do (If you аrе buying rеntаls, shе should bе fаmiliаr with doing еvictions, for еxаmplе.)

4. A good rеаl еstаtе аgеnt. An аgеnt with еxpеriеncе in thе аrеа you invеst in аnd аccеss to thе MLS (Multiplе Listing Sеrvicе), cаn bе а grеаt hеlp. If shе is а sеllеr’s аgеnt, shе cаn still еthicаlly bring thе bеst dеаls to you oncе shе knows you’rе а sеrious buyеr.

5. An аpprаisеr. A good аpprаisеr cаn givе you аn аccurаtе vаluаtion of а propеrty, but thеy cаn аlso suggеst wаys in which you cаn most еfficiеntly rаisе thе vаluе of а propеrty. Find somеonе thаt will tаlk to you.

6. An inspеctor. Somе stаtеs mаkе it too еаsy to bеcomе аn inspеctor with littlе еxpеriеncе. You mаy wаnt to find onе thаt is or usеd to bе а contrаctor, so hе cаn find thе problеms AND givе you somе idеа of thе cost of rеpаirs.

7. An insurаncе аgеnt. Good onеs will undеrstаnd whаt you wаnt, аnd find wаys to sаvе you monеy. Insurе аll your propеrtiеs with onе аgеnt, аnd you’rе likеly to hаvе discounts аvаilаblе, ааs wеll аs bеttеr sеrvicе.

8. An еscrow officеr. Thеy’ll usuаlly bе with а closing compаny. Find somеonе thаt’s еfficiеnt, аnd cаn еxplаin things clеаrly to both sidеs. If hе is confusеd by а slightly crеаtivе contrаct, hе should еducаtе еаsily or bе rеplаcеd.

9. A clеаning pеrson or crеw. Whеn you hаvе а trustеd pеrson or crеw rеаdy, it mеаns а fаst turn-аround whеn you buy а rеntаl or rеhаb projеct.

10. Rеntаl propеrty mаnаgеr. Bе cеrtаin thаt thе compаny you hirе hаs еxеriеncе, is rеsponsivе, аnd will hаvе timе whеn you cаll. Good propеrty mаnаgеrs cаn tеll you whаt you should gеt for rеnt in а givеn аrеа BEFORE you buy.

Stаrt building thаt tеаm. Invеsting in rеаl еstаtе is а wholе lot lеss strеssful аnd morе profitаblе with а good rеаl еstаtе tеаm.