Sell Cheap (by Smokowna [MD]) Nov 17, 2020 3:29 AM|
Sell Cheap (by NE [PA]) Nov 17, 2020 6:25 AM
Sell Cheap (by NE [PA]) Nov 17, 2020 6:28 AM
Sell Cheap (by Ken [NY]) Nov 17, 2020 7:50 AM
Sell Cheap (by PG [SC]) Nov 17, 2020 8:43 AM
Sell Cheap (by Ray-N-Pa [PA]) Nov 17, 2020 9:09 AM
Sell Cheap (by Roy [AL]) Nov 17, 2020 9:10 AM
Sell Cheap (by Deanna [TX]) Nov 17, 2020 9:33 AM
Sell Cheap (by RentsDue [MA]) Nov 17, 2020 10:25 AM
Sell Cheap (by Ray-N-Pa [PA]) Nov 17, 2020 10:45 AM
Sell Cheap (by Smokowna [MD]) Nov 17, 2020 12:40 PM
Sell Cheap (by BRAD 20,000 [IN]) Nov 18, 2020 10:06 AM
Sell Cheap (by Landlord ofthe Flies [TX]) Nov 18, 2020 4:35 PM
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Sell Cheap (by Smokowna [MD]) Posted on: Nov 17, 2020 3:29 AM
I was daydreaming why some folks would sell cheap. Not homeowners themselves, but rather landlords who want to sell.
(this scenario came to me from an old realtor who was trying to talk me into something using a story from her past. I was just thinking "Lady, you are too old - step aside".)
Sorry, went off on a tangent. Lets say you are some landlord and you face repairs, city fines, IRS fines...who else will fine you? Traffic cameras...add those too.
Say you need a new roof and a huge tree taken out.
If all this headache adds up to 10,000,...15,000 etc It could be enough to make you sell out. However if you focus, as Robert in Cali often reminds us. You would be selling cheap ...say a 200,000 shack for 140,000? You just lost 60,000.
You would be better served to continue paying credit card interest.
When I approach a seller, I want them to do well on the sale. Typically this is managed by the seller holding some of the financing or giving them the option to be your bank after the sale. An invitation to invest with you down the road. Surely not by offering pennies on the dollar.
^ Have you read about 1031 exchanges going away? --108.28.xx.xxx
Sell Cheap (by NE [PA]) Posted on: Nov 17, 2020 6:25 AM
I have done exactly as you described. I had a large Victorian house that I got a screaming deal on. It was very difficult to rent. By the time I sold it, it was approaching a lot of repair work. I under cut the list price to sell it quickly, but I still made $60,000 on top of what I had into the project, So it was still home run.
I owned it for maybe four years. By the time I sold that, it needed to be hooked up to the town sewer, because I had a failing septic system. It had a gigantic old 3 story barn that needed to be torn down because it was beyond repair. It needed roof work, it needed a new furnace and the retaining wall that started at one end of the property at about 2 feet high and was about 8 feet high at the other end of the property was starting to fail. It was stacked stone and starting to bulge out. That would've cost me probably $25-$30,000 to fix it.
I said time to go! --70.44.xxx.xx
Sell Cheap (by NE [PA]) Posted on: Nov 17, 2020 6:28 AM
What do you mean when you say that when you approach a seller you want them to do well?
Sell Cheap (by Ken [NY]) Posted on: Nov 17, 2020 7:50 AM
The people i buy from generally would never invest with me because they simply have nothing,i buy there house for cheap and they have no other money.People sell me houses who do not have a profit motive,they just want the house gone for whatever reason,often unpaid property taxes on the house --72.231.xxx.xxx
Sell Cheap (by PG [SC]) Posted on: Nov 17, 2020 8:43 AM
What price to put on an asset requires due diligence - a lot of people just don't want to put in the effort, especially those that inherit something.
Sell and be done with it - that is the attitude.
Also - honest trusting people who receive poor advice.
Sell Cheap (by Ray-N-Pa [PA]) Posted on: Nov 17, 2020 9:09 AM
You are wise to target landlords.......
Just based on the what I see on this site alone, there just might be one or two stressed out Landlords that exist in America.
Just ask them if they have has enough of playing with toilets and tenants in during the time of COVID. They know exactly what you mean.
I like targeting LLs that have owned a place for at least 5 years. There are multiple tools available at that point so that I can assist them. There is typically equity so owner financing is available, subject to is available, cash offers and owner carry back.
I actually find it easier to seek the exit strategy and then work marketing around that. I can't speak for MD, but around here SFH are moving quickly and the MFH, not so much.
Sell Cheap (by Roy [AL]) Posted on: Nov 17, 2020 9:10 AM
Last summer I sold a house for $20,000 less than my asking price. It had been a great rental house for 12 years, however, the house was going to need some major plumbing work ($10K) in the near future and I decided I did not want to be the one who wrote the check for it. I still made some money on the sale just not as much as I would prefer.
Sell Cheap (by Deanna [TX]) Posted on: Nov 17, 2020 9:33 AM
I've bought cheap and I've sold cheap. In general, there's another problem in the works, unrelated to the house, which can be solved by money. Solving the problem is more important than getting the full value of the house. In the case of random individuals, they're usually either heirs (I don't need this house but I'd love some money), heirs (I wanted this house, but I'm sick of taking care of it for the 5-10 years it will take me to actually move into it), people who are moving a good distance away and want an instant down payment, or people who are going to jail/being institutionalized and want to first cash out some assets to keep them away from their relatives.
Landlord-wise, we've bought twice from burned-out landlords.
One was the kind of guy who would rent a <500 sf 1/1 to mom, four kids, druggy boyfriend, and then be surprised that it got trashed and/or they didn't pay. Rinse and repeat enough times-- "I'm 83 years old and I'm tired of dealing with tenants. I just want out." (You could smell that house from the street.)
Another was a woman whose husband had been the landlord. He died, leaving her with all the houses. She tried-- but again, she didn't have a clue about screening. Or maintenance. She did her best, but got discouraged that formerly-cute places were getting more and more trashed. After dealing with bankruptcy (don't know enough about bankruptcy to know how she held on to the rentals through bankruptcy) and health issues, and her new husband's health issues-- the City Code officers started going through all her properties and condemning them one by one. She just wanted to be out. (Oh, those were a doozy... we bought them as a lot for what worked out to be $500 each, but put in about $40k each into two, one has been kept for storage, one is a garage apartment we probably put less than $8k into but will need new windows and a new roof, and one still keeps getting bumped down our project queue.)
The one we sold-- at the time, it was our second-best house. Purchase + renovation were probably about $25k. It worked for a little more than a year. Then I lost control. Tenant knocked over candles during a midnight move-out... needless to say, he only got the one load moved out. We could have repaired the damage for another $60k, but we weren't in the mood. We sold it for the price of the lot to a retired handyman.
Sell Cheap (by RentsDue [MA]) Posted on: Nov 17, 2020 10:25 AM
Sell Cheap (by Ray-N-Pa [PA]) Posted on: Nov 17, 2020 10:45 AM
As investors we are trained to sniff out bargains and try to get a place as cheap as possible. There is a fault on relying on only ratios like
Offer price= ARV * 65% - RC
There are many times I can give the seller exactly what they want for a price on an investment property, if they allow me to simply take over payments. So instead of trying to haggle down the price to the cheapest level possible - if someone is willing to give you equity and the headaches of managing the property........who am I not offer them some aspirin to help them feel better. They just might have another property giving them another headache.
As I look into my crystal ball: I see multifamily properties and the folks who are BRRRRing it having some headaches up ahead. I am not sure how to track down the second group yet --24.101.xxx.xx
Sell Cheap (by Smokowna [MD]) Posted on: Nov 17, 2020 12:40 PM
Thank you for all the replies. Very interesting reading.
Some examples from the past. One lady sold me her home and carried the note for 18 months. I was able to take over the house and get it on its feet and get a loan at about 14 months.
The interest which the lady received helped and of course she had no further dealings with the town or teni during that time.
Most other cases, the selling landlord held the note for a bit. Again, when interest was added to the sale price they did well. Also their tax situation was better during this type of sale.
What I never did was bad mouth the house. Had a guy text me and say that the home will fall into disrepair. I suppose, but I guess he can't see all the improvements I've done from the outside. That was a fairly stupid thing to tell me as I've closed the door to his texts. Imagine if the person had just said "can I help?" "Can you find me a house?"
My approach when talking to sellers. "Yes, it may need repairs, but I enjoy roofing". How many of us would say..." enjoy sewer back-ups? Painting over and over? Not me". I won't insult a house.
you need to have a good bedside manner when speaking with landlords.
Sell Cheap (by BRAD 20,000 [IN]) Posted on: Nov 18, 2020 10:06 AM
Marketing 101: not every buyer or seller is price centered. Many other factors come into play - location, condition, style, sentiment, timing...
If price were the sole decision maker no one would buy chocolate!
Sell Cheap (by Landlord ofthe Flies [TX]) Posted on: Nov 18, 2020 4:35 PM
I can see a bunch of landlords wanting to sell cheap if they're sitting on a rental with a non-paying tenant that they know they can't throw out for 6 months. Why lose the house when you can sell it? --108.69.xxx.xxx
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