Starting out as a real estate agent at a young age can be overwhelming. Being a real estate agent is a very social job that depends on knowing where to look to find new clients. If you’re young and or new to an area, it can seem impossible to be successful. You’ll think to yourself “how am I supposed to do this when I don’t know anyone?” Yet that doesn’t have to be the end of your hopes and dreams. Despite some setbacks that are expected for younger agents, young real estate agents in their twenties can and have enjoyed successful careers in the industry. 

How Young Real Estate Agents find Clients

If you’ve just moved to an area or don’t know many people, it can be hard to find new clients. Older agents with more experience typically are more trusted by prospective buyers. Younger agents thus face a problem of not having enough proven experience and a lack of clientele. 

One way to streamline this process is simply going to as many networking events as possible. Join your local young professionals networking group, go to industry mixers, find anyway possible to get involved in the community. The more you network the larger you pool will get and you’ll be able to find clients more easily. Find different and clever ways to bring up your profession without sounding like an elevator pitch. 

Networking with busier agents in your office is another way to streamline clients. Sometimes seasoned agents who aren’t looking to take on new clients will farm out events such as hosting open houses. 

Don’t Just Go for the Money

In truth, the payment mechanisms in place for real estate agents are not the best. The average age for real estate agents is 57 according to the National Association of Realtors. Pay is largely based on a split commission. The agents work for the brokerage. When the brokerage gets paid their commission, the agents get a cut of that commission. Young agents typically get paid somewhere around 30-40%. As with most things, the more experience you have, the higher your commission is.

It’s important to pick the right broker, however, keep in mind that simply going after the broker that pays the highest commission split is not necessarily the best route. Many young real estate agents want to get paid, but there’s great value in picking a broker that provides the experience necessary to get higher commission splits later on in your career. Many agents fail in the industry because they don’t get the right training. Agents that select brokerages that work hard to train their agents and equip them with the necessary skills to succeed in the business are better off than those who simply go with the higher commission split. Earning a 100% split doesn’t help when you aren’t selling houses. Successful young real estate agents starting their career will seek out the best happy medium between the two.

Overcoming the ‘Age’ Question

Like with most things, age will be a factor only so long as you allow it to be. It’s true that some will be less likely to trust a younger less experienced agent, but the reality is that everyone begins with zero experience. It sounds cliché but age is only an issue if you let it be an issue. Most buyers want an agent who is competent, returns calls, knows what they’re doing, and who communicate well and effectively. If you can demonstrate these things to clients, they will trust you. There may be agents in their 50s who are not as good at those particular things. If you can demonstrate that you are, people will notice and your age will cease to be an issue. 

Ultimately, when people ask things like ‘how old are you’ or ‘how long have you been in the business,’ what they are really trying to find out is, ‘do you know what you’re doing?’ If you are competent and know what you’re doing, then it will not be a problem. People want someone they can trust. Again, this is where finding the right brokerage is key. If anyone questions your experience you can then simply note that you are a part of a well experienced office that you may consult at any time. 

Another angle is that younger agents have more time as opposed to more experienced agents who have long and congested client lists. By having more time you can offer a more personable experience and dedicate more fully to your client.

Advantages a Young Real Estate Agents

While being young in the real estate industry can provide some challenges, there are also many advantages to being young. Most agents are in their 40s and 50s. Many begin their careers later in life. Starting early can be an advantage as you’re still at a phase of your life prime for soaking up information and gaining experience. The more experience you have, the more successful you can be. Starting younger allows you to learn the trade in and out and gain great experience. Some agents who start later in their career are thrown into the industry with little to no experience and have to teach themselves along the way. 

Another huge advantage young people have right now is the ability to adapt to technology. While not necessarily universally true, in general, younger people are more tech savvy and can use technology and social media to market themselves in new ways that didn’t exist in decades past. Things like promotional videos are great ways to market individuals and real estate investor businesses. By using technology to their advantage and marketing themselves, young agents can make up for their lack of experience and use these tools to gain clients. 

A reliable contractor who consistently does good quality work, within the allocated timeline and budget, is a priceless asset for anyone who owns real estate. It is particularly true for investors who constantly need home improvements and repairs done on their properties. Some of them may be necessary to improve the value of the building. Others are required to compensate for the wear and tear, reasonable or not, due to tenant occupancy. 

However, finding a good contractor can seem akin to finding a needle in a hay bale. Every investor certainly has horror stories of individuals never finishing the job, going way over budget, or doing terrible quality work. All those issues could lead to a significant waste of time, money, and even potential long-term consequences like law suites. To avoid such an ordeal, here are some tips to keep in mind to find the best contractor to cover the improvements and repairs on your building.

1. Get several bids

Always require bids from several renovators before reaching a decision. Three bids will give you a good idea of what to expect in terms of cost and timeline without being too overwhelming. Word of mouth is often the best way to identify who would be a potential asset for your business and who you should avoid at all cost. Ask friends, family members, and other real estate professionals for recommendations.

• Ask questions

Besides bids, an interview, either on the phone or in person, is the best way to judge the quality of a contractor. Here are some of the questions you should ask your potential hire:

• How long have you been in the business?
• What are your qualifications?
• Do you have a license?
• What is your insurance policy? What about your employees?
• Do you supervise your job sites personally? How often do you check on your projects?
• Have you worked on projects similar to mine before? When?
• Do you have references I can contact?
• Do you belong to a trade association?

• Stay in touch

Communication is critical when it comes to hiring a contractor for repairs and home improvements. As an investor, you don’t necessarily have the time or the possibility to inspect each property personally on a regular basis. Therefore, you should be able to rely on the person you hire to supervise the work. They will also need to keep you informed on the progress of each project, and of any impediments and delays, you will need to relay to fellow investors. How fast they get back to you when sending a bid is often a good indicator of what to expect for the rest of the relationship.

• Do your homework

It is not enough to ask for references. You should also check with them. Don’t hesitate to drive-by the properties your contractor has previously worked on or visit the projects if you have the ascent of the homeowners. Besides, make sure that you are aware of the rules and regulations regarding contractors in the state where you will be operating. You will also need to ensure that the contract you will be signing covers any issues you may encounter during the project.

• Don’t make a complete payment until the work is complete

Never pay a contractor in full until the work you needed to be done is finished. You certainly don’t want them to leave before you are entirely satisfied with the project. Therefore, don’t release the last payment until the final walk-through and always demand a detailed itemized bill to avoid any bad surprises.

Finding a loan that’s right for you can be difficult, add the fact you want to flip a house with the loan and things might seem overwhelming. Don’t worry, though because we got your house flipping back! Understanding terminology that sounds complicated but isn’t will support you in making decisions that are right for you.  

What Are The Costs of Flipping Homes

Flipping a house might sound like a profitable business, but like any successful business, it’s work. It takes much more money to flip a house than it does to buy a home in which you want to live. 

Short-term capital gains tax rates of 10% to 37%, depending on your federal income tax bracket. This will cut into any earnings you make on investments you flip within one year. 

Unfortunately, this isn’t 2005 when anyone could get a mortgage with nothing down. Even if you qualify for a loan with a down payment, you’ll pay more because lenders see flipping as a riskier proposition.

Also, many lenders are reluctant to work with amateur flippers. Lenders will want to see that you have a strong track record of selling at homes for a profit. Even if you have just one that’s a great start. If you do find a lender who doesn’t care so much about a strong track record, then they’re likely to charge you higher fees on a loan. 

Hard money lenders aren’t usually bothered by borrower requirements such as debt-to-income ratios and credit scores. They may want to see an applicant’s documents such as tax returns, bank statements, and credit reports. Nor do they care if down payment funds are borrowed from other sources.

Where to Barrow?

Friends & Family

Many people invest in real estate to get above-market returns and might be interested in your project. And since family and friends have a personal connection with you, they’re likely to charge the lowest interest rates.

Finance Partner

House flippers can find themselves in an uncomfortable position: They have the market experience to know what it takes to capitalize an excellent flipping opportunity but lack the money to finish. This is where bringing on a partner can help. Partners can:

1. Find the flipping opportunity
2. Plan and manage the renovation
3. Supply/support in the financing

Home Equity Loan or Line of Credit

This works the best for flippers who are homeowners and have at least 20% equity in their primary residence.

To qualify for a home equity loan or line of credit, you should have at least 20% equity in your home, ideally more depending on how much you want to borrow. You should also have sufficient credit and enough monthly income to afford your mortgage payments and pay off the HEL (Home equity loan) or HELOC( Home equity line of credit).

401(k) Financing

Yet another option on how to finance and do flip is to take a loan or withdraw funds from your 401(k) account. 401 (k) Financing isn’t an excellent choice for someone nearing retirement age. If you’re a young house flipper then taking a loan from your 401(k) might be worth it if the rewards outweigh the risks.

Personal Loans

To qualify for a personal loan, you’ll need a credit score above 650. Rates on private loans can be as low as 5%, and you pay the loan back in monthly installments over a three- to a seven-year term. The catch is that the loan amounts are relatively small, capped at $50,000. So, you may have to combine a personal loan with other loan options to finance your fix and flip.

It’s not uncommon for people to buy houses that need repairs far below the regular market value. Many people base their home purchases and investments off of buying these inexpensive houses. Unfortunately, when you buy a home that requires repairs to achieve livability, some lenders will not lend you money. Necessary repairs can cause a deal to fall apart. The good thing is, there are a few ways to finance a property that needs repairs. 

Fannie Mae’s Homestyle Loan

This loan allows borrowers to buy a home that needs repairs, as well as refinance the home that they currently live in so that they can pay for improvements. There are a few qualifications for this loan. 

• If it is a primary residence, you have to have a credit score that is at least 620. Check your credit score here to see if you qualify.
• You have to make a 5% down payment in the least when you buy the home
• You must have a certified contractor submit an estimate for the cost, as well as details of the repairs

FHA 203(k) Loan

The FHA has 203(k) loans that they offer with a fairly low credit score requirement. The minimum down payment is 3.5% too, making it a bit easier for lower-income families to utilize. You can pick from either a limited loan or a standard loan.

Limited loans have a $35,000 cap that is perfect for things such as paint jobs or kitchen remodeling. Standard loans are better for extensive repairs and remodeling, though you must hire a 203(k) consultant to oversee the work. 

You can get an FHA 203(k) loan if your home is over a year old and the cost of your repairs must be at least $5,000. The mortgage limit varies by state and county. 

Home Equity Loan/HELOC

Home equity loans are also known as second mortgages. These one-time loans fluctuate in terms of interest rate, though the monthly payments will stay the same over the period of the loan. HELOC is a home equity line of credit that is best for someone who has a bigger home improvement or more expensive home repairs. 

To make use of these loans, you must pledge your house as “collateral”. This means that if you don’t end up being able to make payments on time, the lender will take over your home.

Conclusion

Choosing the best loan for your home renovations and repairs comes down to what kind of credit you have and what your eligibility is. For example, an FHA 203(k) is great for someone with okay credit and a smaller down payment ability.

One major piece of advice would be to work with a lender that knows the details of the specific loan program inside and out.

Have you ever had to buy and finance a fixer-upper? What was your experience like? Make sure to let us know in the comments! 

Selling a multifamily property such as an apartment building or a duplex requires considerable preparation.  Price your multifamily property properly, keep your records organized, get the property in tip-top shape and it will be that much easier to pinpoint qualified buyers.  It really is possible to fetch much more money than originally anticipated for a multifamily property regardless of whether buyers are difficult to find your local area, current market conditions and other factors.

 

Prepare the Property for Sale

Perform your due diligence before putting the multifamily property on the market.  Interested parties will request evidence of annual expenses and income.  Make sure you have supporting information ranging from utility bills to tenant leases.  Fail to have these documents organized and interested parties might shift their attention to other properties.

 

Get the Property in Tip-top Shape Before Putting It up for Sale

If there are any blatantly obvious issues with your multifamily property, have them tended to right away.  Though most of those in the market for a multifamily property will not expect these spaces to be in the same pristine condition as single-family homes, if there are clear problems, it indicates the building has even more hidden issues that will take time and money to remedy.  Repair the property before listing it and you just might trigger a highly competitive bidding war that pushes the price higher and higher.

 

Get rid of Those Problem Tenants

No one wants to purchase a multifamily property with loud, messy or otherwise-annoying tenants.  If you allow problem tenants to stay, they will likely send interested bidders scurrying away to properties with more mature tenants.  If your best tenants give word they are looking for a new place to live, consider slightly reducing their rent before putting the property up for sale.  Do everything in your power to keep these rock-solid tenants, evict problem tenants and it will be that much easier to attract a buyer.

 

Marketing a Multifamily Property

Reach out to those who own similar investment properties in your community.  Some such owners are likely interested in owning several properties in the same area.  Aside from the fact that these investors have plenty of money to spend, they are also likely to be interested as they can extend their maintenance team to newly-acquired buildings in a seamless manner.  Even if those in the community who own similar investment properties are uninterested, they might know someone who is in the market for a multifamily building.  This no-cost word-of-mouth marketing has the potential to identify interested bidders willing to pay fair value for your multifamily building.

 

Hire a Real Estate Agent Experienced in Selling Multifamily Properties

The assistance of a real estate agent experienced selling multifamily properties will facilitate the sale of your building.  Ask for examples of previous multifamily properties sold by the agent in question before making a commitment.  The real estate agent you select should understand the nuances of the local market for multifamily properties as well as marketing strategies to fast-track the property’s sale.  It is no longer enough to use traditional outbound advertising methods such as newspaper ads.  The real estate agent should have inbound marketing strategies such as social media mastered as well.  Otherwise, it will be difficult for the real estate agent to maximize the pool of prospective buyers.