Wednesday, July 9, 2008

Agents work for themselves, not us!

There's just something about relying on agents as a professional investor that goes against my grain.

I suppose it's just the fact that the agent has a different objective than I do. They want a "closing". I want a "deal".

Agents "have" to have a closing to pay their bills and overhead.

I don't "have" to have squat.

Frankly, to put our opposing objectives into relief, if I don't insist on only buying "deals", I'll only have "squat" in the end.

Recently I interviewed a professional (full time) real estate agent that I'll call Pedro, that was listing a short sale property. The acreage had a stick built home on it, and at roughly $80k an acre, it seems like a great price --- not wholesale, but a good price for an end-user.

After talking to Pedro for a bit, I realized that even though this agent was open and frank about his feelings regarding the market, I had to pause and remember I was not only talking to Pedro ---- I was talking to a Pedro. Yes and this Pedro was quite persuasive informing me that I shouldn't wait until the market bottomed out before I bought, but should realize that a bargain now, held on for many years, would prove a decent investment --- especially if I had "staying power".

Well yes, this might be true enough, but my objectives are not to rely on my staying power, just so that I can survive until the next rebound. I want only juicy deals that I can profit from today (regardless of my staying power thank you).

So, what's the Pedro thing anyway, one asks. Here's the story...

Once upon a time there was a feisty US Marshall chasing two stage coach Banditos that had robbed the stage of it's gold.

While capturing and handcuffing the robbers, the Marshal realized the thieves spoke no English. The Marshall was helpless to find out where they hid the gold without a translator. So he dragged the scoundrels into town and found a man called Pedro to translate. When Pedro found out why the Marshall needed his help, Pedro smiled and happily obliged.

Meanwhile, the Marshall was waving his six-shooter at the thieves heads demanding to know where they hid the gold, and threatening to blow their heads off if they didn't tell him what he wanted to know.

Pedro translated exactly what the Marshall requested to the two thieves saying, "If you don't tell the Marshall where you hid the gold, the Marshall says he'll shoot both of you in the head!" They looked at the Marshal waving the pistol back and forth just waiting to shoot them. Fearful the Marshal had a trigger-finger they gave in and explained to Pedro that they had buried the chest of gold under the Oak tree at the Three Forks river bend.

Desperate, the Marshall demanded to know what the bandits said. Pedro turned to the Marshall and replied, "They said, 'Go ahead and shoot!'"

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