I'm getting closer to wanting to sell my properties in Brew City. They've been great investments and every single one has a GREAT, long-term tenant. As in, "I'll pay for the fence" and "I'm going to pay early this month" and "I got my uncle to swap out the kitchen faucet" and "Don't worry, it's not a big deal and you can fix it next time you're in town" kind of tenants. I'm getting tired of the eight-hour trip to manage the properties, though.

My challenge is that I fixed them up as clean, safe, functional homes. They're very well maintained, but they're not HGTV homes. Vintage maple cabinets, colorful bathtubs, ugly siding.

Option #1: terminate leases one by one, rehab to a high standard, and sell for top dollar to homeowners. This is Cimba's approach.

Option #2: sell as is, with great tenants in place, to investors.

For those of you who've explored these options, what have you found is the best approach?

Are you a pro rehabber? If not, sell "as is". You won't be able to do the work fast or cost-effectively. Do what my REALTOR advises: "knock the stink off them" (i.e. clean up inside and outside), throw on a coat of paint inside, manicure the lawn to "mowed and not overgrown" status. Scrub 'em down inside and outside. Install air fresheners... and liquidate.

Then do what Ray says and 1031 exchange. With value run ups recently, you may be surprised at how much profit you have left over to invest. Don't let Uncle Sam get his hands on it! Maybe a self-storage facility or some small automotive shops (my "big metal boxes with concrete floors).

Interest rates for new loans are high, which drives the price down, esp for investor buyers.

If you want to sell one at a time, offer them to the tenants on a wrap around mortgage at the high price.They will get the lower rate on the existing loan and you get a higher rate on the rest. (I've been getting 10 percent). Put a balloon date on it so, say in 6 month intervals and maybe allow them to extend the terms 6 months at a time until rates drop again and then they must refi. You delay cap gains taxes and collect interest at 8 or 10 percent until the refi..

I probably would not sell to investors because they will want lower prices due to higher interest.

A lot depends on how hot the RE market is in the area. There are areas that are still hot and others that are in the doldrums. It also depends on how much time you want to spend and if you want the risk and cost of upgrades to get top dollar.

If it's hot and you desire to minimize your time investment then bundle them with tenants in place as Ray suggests. If you don't do a 1031 then carry the note for another investor so you can spread out the capital gains over the life of the loan (and 8% return on the money is good too).

Since you're hours away I'd avoid any substantial improvements. Even if you already had a great GC in hand.

About a year ago, one of my properties became vacant. Instead of rehabbing for renting, I rehabbed to sell it. I do not want multiple properties on the market at once, so I put only that one property on the market.

When that one property closed, I waited for the next vacancy, rehabbed it and put that next vacant unit on the market.

I do NOT want to wholesale; I want retail buyers willing to pay top price.

Robin,

My first reaction is to sell vacant because investors will lowball...

BUT I am seeing newbie investors paying full price. They have grown up (grown into) a different mindset than we started with.

I like Ken's idea to connect the better credit resident to a mortgage broker.

Me: I HATE paying taxes on my blood sweat and tears so I only do 1031exhanges. Simple and saves me 37% taxes. I can justify paying full price for a nicey nice turnkey replacement property because I am buying with a 37% "discount".

Last year I sold 5 vary rough projects to 3 different investors and 1031'd them into one really nice 5 bed, 2.5 bath executive home. A keeper.

Method if you have cash available...I sold 3 of those homes with seller financing for MUCH more than I could get as a cash price, at 10% interest, 12 month balloon. I loaned the buyer the money to BUY my houses.

I used the money I got from him at closing (actually MY money that I loaned him) to buy the 1031 replacement property.

He just paid his loans. I figure I made about 30% more by doing that rather than a straight sale

Contact www.APIexchange.com . Flat fee for 1031. Add a little for each property in a group sale.

BRAD

Another vote for Sid’s suggestion. Don’t tear into anything that may cause the scope of job to increase.

Clean, clean, clean, and paint. I will say that new shingles are expected by homeowners, so MAYBE anew shingles.

Oh I will agree on the shingles.

A new roof will add value and curb appeal.

When you fill out the paperwork and put 0 years as to roof age they all like that.

I know I would. But only if I could hire it out.

Great topic, and I faced this on a couple of mine. Here's what I did.

On one, I was having health issues and couldn't work on it...so I sold it "as is" to an investor...I didn't have to touch anything after the tenant moved out.

On the others, I got with a realtor and asked her...

"How much would you recommend as an asking price if I just clean it up, do some minor painting, and sell it basically as is?"

After she answered, I said "Ok, and how much would you recommend listing if I put all new kitchen cabinets in it, new shower, took out the wood paneling and installed drywall on those two walls, put vinyl soffit on where all the wood eaves were rotted, and fixed all the chipped ceramic tiles in the kitchen floor?"

She gave me another number. Subtract one from the other and see if you can do the work for less than the difference.

It might be worthwhile getting an appraisal and talking to the appraiser while they are there just to ask how doing certain things would affect the appraised value.

In my cases, the best approach was to do all the "clean up" and "minor repair" things but not totally gut anything like a kitchen or bath...as new homeowners often want to pick their own cabinets, shower style, tile, etc...and if you've already remodeled it...they lose that ability.

I say sell them to me at a fair price... I will rehab them and sell at a high price... I prefer to buy the homes vacant although Ill take out the trash if need be...

Send me a list of what you want to sell and prices your thinking of... Maybe I can help shrink your portfolio...

I am not renting any more sfhs... If tennys tick me off or give me grief, we throw them out rehab them and list at a really nice price...

I don't know how to sell ho-hum places... Wouldn't have a clue... I fix them up brand new with kitchens baths etc. and unload...

You can retail them one at a time and get top dollar or wholesale them off and make less but (have less work to do)...

We are swamped BUT if you want ol' cimba to get you top dollar for some of these just open your checkbook and lets do it... As you know we won't do and 1/2 ass quick dirty jobs... If you want a nice product to sell give me a call...

We are getting crazy money for all our cribs today... We pay SLEEPY JOE and are investing the rest (cashing out)...

Peace out,

Cimba Gone