Hi Monkeys,
Does anyone have a recommendation for a brokerage firm that could help with buying one's first fixer upper home in Washington DC, especially in NW neighborhoods? Looking to do a 1031 exchange after 5 years of using it as a primary residence. Also, someone who might be familiar with first-time homebuyer assistance.
Thanks. All leads are appreciated.
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Hey there!
Based on the most helpful WSO content, it seems like you're on the right track with your plan to invest in real estate in Washington DC. It's a vibrant city with a lot of potential for property development.
As for a brokerage firm, I don't have specific names to share from the WSO Dataset. However, I can tell you that it's crucial to find a firm that not only knows the local market but also understands your specific goals and needs.
When it comes to first-time homebuyer assistance, there are numerous programs available, both at the federal and local level. It's worth doing some research to see which ones you might qualify for.
Remember, investing in real estate is not just about buying a property. It's about understanding the market, knowing when to buy and sell, and making informed decisions based on reliable data.
And don't forget, timing is everything in real estate. As one of the WSO threads mentioned, you don't want to get caught with your money in the market at the wrong time.
Hope this helps! Keep swinging through those trees and you'll find the perfect property in no time.
Sources: First Real Estate Investments: Benefits of Forming an LLC or Direct Ownership, From Real Estate Finance to Founder of Development Company - Q&A, Investment Sales or REPE?
Going to have a hard time. NW is either far outside the loan limits on structured FTHB programs and the other areas are being gentrified so you’d be competing with developers that are established in the area that are cash heavy. You might have some luck as many of the mid market and smaller contractors that have been in the industry for a long time, they haven’t been able to offload houses as quick and turning to renting them. Have you done this before, it’s a great way to build equity in your property but not a quick way to make cash.
Most people on here will know about CRE brokerages which wouldn’t touch a loan this size. So can’t help you there. Talk to a local CDFI or MDI credit union that will have good suggestions and programs through ECIP. ECip through the treasury department will give you a list of these CUs
Finally pretty sure it’s almost impossible to do a 1031 on a primary residence. I’d talk to a CPA about that
My advice is to not use a broker. I know buying a property in the hundreds of thousands to maybe even millions of dollars is daunting and a broker may provide you with more confidence/peace of mind, but that is basically the only value they will provide you. The broker is not going to guarantee the value of your property, they are not going to know any construction issues, etc...There is no real value the broker adds other than giving you the illusion of confidence. There is nothing the broker can do that you can't. You can research markets on your own and subscribe to redfin/zillow alerts. You might make the argument that the broker saves you time, but is that time really worth saving? Even if the broker does all the market research for you, you should still do it yourself because it is your money after all, not the broker's. The only "time" the broker might save you is calling the listing agent to schedule a showing, but thats literally a 2min phone call/text.
Now that we've established that a buyer's broker provides little to no value, let's talk about the downside of using an agent: Splitting commissions. The listing agent is incentivized to sell directly to a buyer without a broker so that they keep the full commission. If you come in with a buyer's broker and the listing agent need to split 50% of the commission with them, they re disincentivized to sell to you and trust me, the listing agent has a lot of sway over the seller. The listing agent will prioritize direct buyers even if your offer is higher. For example, if you offer $1.1mm for a property, but have a buyer's broker and there is another offer directly from a buyer at $1mm, the commission on your $1.1mm offer is higher ($55k vs $50k), but the listing agent will need to split 50% of it, so they would rather sell to the $1mm offer. Legally broker's must present every offer to the owner...but what if they dont? Who's there to catch them?
To provide a real life example, I recently bought a property that was very hot. The agent received tons of interest, but the owner told him that he would not be reviewing offers until the following monday, so there was no way for me to snag the property before the offer deadline. However, the broker knew that I was a direct buyer. He literally calls me the sunday before offers are due and tells me "i want you to be the buyer so that I get the full commission." I knew right then and there that no matter how high the property bid to, I would be the buyer. The next day, the broker drafts my offer and we meet in person for me to sign. He shows me all the phone calls and texts he's been receiving from other interested buyer, but he just doesn't pick up nor respond to their text. Technically he did not break any rules because there were no other offers to present...because he didnt let anyone else put in an offer. So anyways...don't use a broker
What first time home buyer assistance are you looking for? Like putting less than 20% down? Just call your local bank and they will have programs for that
I live in NW and have have owned property here since '07. I mean this with all due respect, but it is apparent you have zero clue what you are doing, are asking all the wrong questions and candidly in the wrong forum. Whatever you are trying to do (I genuinely cannot tell, maybe a gut reno coupled with some attempted tax play?) do yourself a favor and stop. Now that I've gotten this idea out of your head I want you to drive over to legacy on 14th st, buy some gummies, then pick up a 6 pack of ipa and go home and dream up another money making idea. No need to thank me.
ps. go buy a 4 unit multi deal in Richmond w/ 5% down via fannie.
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