Listened to another realtor pitch today.I still scratch my head on why do a buy and sell.Sell 1.6mil in property to purchase 20% down on new property.RE fee for sell 6% or $96k. Other fees too.Then purchase $7.5mil property. RE fee 4% = $300k.propery return after debt service is $210k.Why not invest in tax free munis or something.It just rubs me that the deal maker gets two years of my income.Then I wonder if this guy is doing so good at selling, why isn't he buying this stuff himself.
Why not invest in tax free munis or something.Presumably on your sale you have a big capital gain. Do a 1031 exchange to avoid the tax. Alternatively, give a chunk to Uncle, then buy the tax free munis.It just rubs me that the deal maker gets two years of my income.No deal is complete until you get into the Realtor's shorts and make them ante up some of that fee.Then I wonder if this guy is doing so good at selling, why isn't he buying this stuff himself. He makes it off of you. Realtors actually do work for their money, and the best ones do quite well.
Then I wonder if this guy is doing so good at selling, why isn't he buying this stuff himself. Look at it this way: Q: Why does the bank loan Boeing money to build airplanes with instead of using the money to build airplanes themselves? A: That's not how they make their living.
I've spoken with an honest realtor. Here's a reply:Generally when you leverage your money you want to have as much mortgaged as possible to spread your money to as many assets as possible. However, if you don't keep an investment for several years you do end up paying as much in commissions as you make on it. Some solutions can include, getting an agent who will negotiate commissions with you. Commissions are always negotiable, RICO laws. Another solution could be, have you or spouse geta Real Estate License? Many investors do this for the very reason you are questioning. It could be a way of putting the commission money back into your own pocket. You also might look into trades. Sometimes you can work good deals that way. Also ask a good CPA or Attorney that does them about 1031K investments. If we can work on referrals through your agent we could also recoup some of your commission money for you.
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