First rental closed. The appraisal nearly ate the whole thing.

The concession is the bit I want to understand. Was there a cap on how much of the buyer side fee your lender would let the seller pay, or did nobody raise it? I've read that some loan products limit total seller paid costs and I've never seen the actual number.

@arbor there are limits on seller paid closing costs and they vary by loan type and by occupancy, and how a lender treats buyer agent compensation inside that bucket has been moving since the settlement changes took effect in August 2024. So I won't quote a percentage as if it's fixed. Ask your lender to put in writing, before you write the offer, what they will count as an interested party contribution and what the cap is for your specific product. @ember on your appraisal, the lender lending off $142k when the contract says $143k is normal. The gap is always cash from the buyer. Your $1,000 was cheap. I've watched a $14k gap end a deal in one phone call.

Numbers like this don't reach my markets. Where I look the houses are $55k to $75k. 2.5% is $1,500 and no agent who knows what they're doing is going to shop, drive, and write three offers for that. What I get instead is the listing agent on the other side and my own spreadsheet. Ember, would you still pay percentage on a $60k house, or would you go flat and expect less?

Strip out the warm feeling for a second. What did she do that you couldn't have done with a title company, a lender, and a home inspector? I'm asking honestly because the two killed deals are the only concrete thing in the post and one of those was a comp pull, which is a task, not a skill.

@sable the comp pull matters more than you're giving it credit for if the alternative is a beginner anchoring on list price. Ember, I want the two dead houses in detail. What did she say about the foundation crack, and what did the comps show on the second one versus what you had in your head? The size of the mistake she prevented is the actual value number here, and right now it's a blank.

$1,250 rent, signed and occupied three weeks after close, is the strongest line in the post and you buried it. On my first few the gap between the number in the listing and the number a real tenant signed was $150 to $200 every time. Did she quote you $1,250 before you offered, or did you find that out after?

Also $250 a month with nothing set aside is not $250. One water heater is fourteen months of that.

How did you find her? That's my whole problem. Every agent site says investor friendly and then the first call is about school districts.

I'd want the rest of that agreement before I called this a template. Was it exclusive, and for how long? Was there a protection period after it ended, and did it name a minimum fee, meaning a floor she gets regardless of price? And what did it say about properties you find yourself, including auction and anything a wholesaler sends you.

You renegotiated her fee down by phone when the price dropped, which suggests the document didn't cover it. That worked out because she was reasonable. It's not something to rely on twice.

Sixty days on market and a seller who wouldn't move the last thousand. Patience was doing most of the work on your side of that table.

Fair result. The thing to watch is what happens on house four. My agent was worth every cent on the first two, and by the third I was pulling my own comps at midnight and calling her mostly to write and submit. That's when the percentage started to feel like a tax on my own work. If you keep buying in that same neighborhood, at some point you'll know the street better than she does and you'll have to decide whether you're paying for judgment or for access to the MLS and a signature.

You didn't say a word about the mechanical side. 1970s brick, one bath, what's the sewer line made of and did anyone scope it? Cast iron and clay both fail and both cost more than your first year of cash flow. Roof age, panel type, and whether the supply lines are copper or something older would tell me whether $143k was a good number or a fast one. Your agent spotted a foundation crack from a neighbor's flip, which is a good sign about her eyes, but a crack you can see is not the expensive kind.

Slow down for me on the concession. The seller agreed to pay $2,860 toward your agent, and you agreed to a higher price than you otherwise would have, so you borrowed the money and paid it back over thirty years instead of writing a check. Is that what happened, or am I inventing that?

@vellum that's basically it, and it's why the appraiser gets a vote. A concession baked into price only works if the value supports the price. Ember's came in $4k light and that's exactly where deals die on me. Ember, run the alternate version. Appraisal at $135k instead of $142k. Seller holds at $146k. Does your agent still get $3,575 for a deal that doesn't close, does she cut it again, or do you both walk and she's worked six weeks for nothing? Whatever the answer is, that's the conversation you should have had in writing before the offer.

The $250 is what I keep circling. You said self managing for now. Put a manager on it at 8% or so plus a leasing fee and that number goes near zero. I want income that doesn't come with a second job, and this deal only produces income because you are the second job.

Did anyone check that the use is legal? A 1970s single family in a working class area is usually fine, but I've seen a converted second unit in the basement that the county never knew about, and that's the kind of thing that shows up when a permit gets pulled later. Zoning and nonconforming use rules are set locally and differ a lot, so it's a call to the planning desk rather than something an agent guesses at.

How many offers before this one, and over how long? I ask because the post reads like three months and one house, and I'd like to know if that's real. If she wrote you eight offers for $3,575 that changes how I think about the fee entirely.

So you literally wrote a personal check for $715 at the closing table? Was it on the settlement statement as a line item, or separate? I want to know what the paperwork looks like when the buyer pays part of their own agent, because everyone talks about it and nobody describes it.

Two things missing from your carrying costs. Insurance on a 1970s brick rental with an older roof can be quoted twice, once cheap and once real, depending on what the carrier does with roof age and whether it's replacement cost or actual cash value. And in a lot of counties the assessed value resets off the sale, so your $160 a month tax figure may be last owner's number rather than yours. Check how your county handles reassessment on transfer, because that varies by state and by county within a state. If both move against you, the $250 is gone before the water heater gets a turn.

I've had a spreadsheet open for seven months and no offers written. Reading a $715 check as the price of getting an actual closing is more persuasive than anything else I've read this month.