Friday, April 22, 2005
Shmuck or Nice Guy?
Just a little unloading here ... I asked my agent if she would be at the closing, and who I make her check out to. She said that 'yes' she would be at closing, and then thanked me again for considering her financially in this deal when it was her mistake. I then renegged a little on my original offer to her back in early March (just a little). Back then, I said I'de give her half her commission, or $2,525, for the deal. Again, I haven't a clue where I got that figure, but I said it. Now, I told her I'd still pay her half her commission on the deal, based on the list price (and not the lower purchase price). So, 1.5% of $112,000 is $1,680. IOW, I didn't reneg on the commission percentage part (it's still half), but just the end value ($1,680 vs. $2,525). I figure she's still getting a good bonus for not expecting anything from the deal, but I hope the $2,525 - $1,680 = $845 doesn't cause any bad feelings. Besides, I also told her that I'd pay her full comission when it gets sold (instead of the 1% reduction she said she'd offer me before I even had a deal). So, am I a shmuck or a nice guy? :-)
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6 comments:
I wouldn't worry about it. The previous number was based off of a wrong calculation. Your purchase price was 101k, right? I'm sure you got 2525 by thinking she should get 6% minus 1% that you guys had agreed on - making it 5% and then half of that is 2.5% of 101k which is $2525. So don't fret. You told her you'd give her half of what her comission should be and you're giving her more than that anyways. Now, on another note, congrats on your first acquisition. I won't go so far as to say "on your first deal" because you will soon learn this is like barely halfway through. I hope it all works out, if you think your wife is stressing now lets see what shes like in a month or two if you're still sitting on it! Don't get nervous though, I'm sure it will all work out. Now look, I'm gonna go and give you cold feet... Just don't go thinking the hard part is over and start to relax... not just yet!
Thanks for the support, ryan. I got a reply to the email I sent my agent, and she seemed very happy with the $1680, so I'm a bit relieved. I have a l-o-n-g weekend ahead of me with all the projects I have to do on the house. We'll see how that goes. Then, I have to play the waiting game for who knows how long. I just hope the comps I pulled and my RE agent's comps/CMA hold up, and I'm not having to drastically slash my sale price to get this moving. I also hope the house stands up to vandalism if it sits a while. It's had no problems sitting since last October, so I think I may be good. Thanks again!
Oh yeah ... And this isn't much of a rehab at all (more cosmetic than anything), and I still can't believe the work that needs done. In the future - (once I get some reserves) - I'll start contracting out a lot of the stuff to free up my time.
What exactly is your exit strat on this one again? Lease option to a tenant/buyer or just rent? What are you doing now to get it sold/rented/leased?
My exit strategy has morphed from retail flip to L/O back to retail flip over the course of the last 7 weeks. I want to desperately hold onto it for long term, but my wife and I made a deal to unload this first one. I still have the L/O posting in yourleaseoption.com (which I need to delete) when I wanted to do a L/O. Now, I plan to make the majority of repairs this weekend (all but the microwave/vent hood), and have my agent list it for retail. I can still make anywhere from $9k-$15k depending on how long it sits, but I could have made a lot more if I L/O it. Also, this property was more for learning purposes, which I did a lot of. Hindsight being 20/20, I can see where I could have saved a few $$$, but I am happy to have gotten this far regardless.
I know exactly what you mean about your first aquisition being more for learning purposes. I think it's that way for a lot of investors. My first property didn't result in a lot of cash or huge monthly income, but wow, did I learn a lot! With your first deal, you do well if you come out on the right side of $0. So, congratulations on making it this far! Keep your chin up!
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