I have a property that I owe $122,000 on; I am moving away for work in 4 months after my training is complete (moving to corporate offices for promotion). I need to sell this property because managing it from far away seems like it will be a hassle I don’t want to deal with esp since I have very little landlord experience.
The property is not in the best shape but I have fixed alot of cosmetic items (repainted, new curtains, new landscaping, fixed walls, refinished hardwood floors). The property is 105 years old and in a historic district; comparables are in the $125,000-155,000 range. My appraisal shows my property valued at $130,000 (this was in November 2005 and I have added repairs since then such as window restoration, front door restoration, electric updating, etc).
My biggest fear is that in 4 months when I am gone I have no way of monitoring the property, I have already been screwed by a management company and just flat out don’t trust a property I can’t manage myself. The property is downtown so I am sure I will get alot of traffic assuming I stick a sign in the front yard.
I want to sell this property fast, what are some creative methods I can use other than newspaper ads and such? I am open to selling 10% below purchased price ($111600 sale price) which is what I am willing to lose since part of my relocation package will help offset some of the costs. Are my chances at finding an investor good at a sale price such as this or could I potentially lose more money here? I have the property vacant right now and don’t really want to fill it up before selling it.
Should I try and sell or continue to rent it out in hopes I can manage it remotely? I am not confident in the latter…
Unless the rents are GREAT, I would sell the property. I seriously doubt that you can sell the property to an experienced investor with the discount that you’re offering. However, there is an entire industry of selling things (property, courses, semnars, etc) to newbies. Many newbies (especially California investors) jump in with very little knowledge and you could probably sell the property to one of these newbie investors. New investors like the “motivated seller” buzzword that they’ve heard in the courses, so you might try advertising your property in the local newspaper with an ad like this:
Motivated Landlord. Must Sell Rental Property. Big Discount. Excellent Income. Your Financial Freedom Could Start Today! Call NOW! XXX-XXXX.
Bump up the price to the higest you can get the appraised value say $135,000.00 and carry 10-20% and advertise to people with not so great credit. I sell mine in less the 10 days.
Wellington bank will do a 85% Stated allowing a 15% owner carry with a 514 score.
This is an interesting strategy… I am not very educated on owner carry loans; would this mean that if I advertised 25% owner carry at $135,000 I would be essentially selling the house for $101,250 with the owner paying me installments for the 25%? How would that work if I have an existing loan? Would I refinance myself?
What if they don’t pay the first Mortgage? Isn’t he in risk of not getting paid back by being in second place in case of foreclosure? I’m not sure how that works.
First look at his deal He has comps in the range up to 155k so if he can push that appraised value to $155,000.00 and wants to sell it for 122k bumps the price to $155k he would carry 31k at 20% leaving him walking with $124,000.00 so as a seller I would be happy. Now if they don’t pay. He can either
A. Write it off on his taxes
B. Buy the house back and resell it again
or even
C. Sell the note for as low as $0.50 cents on the dollar and walk with an extra $15,000.00 more then his fast sell price.
The other thing that I do is pre-warn the new buyers that I foreclose faster then the bank so I pretty much always get paid.
Hey,
Good advice from a practiced investor from Robb. The most replies and action I got was from an ad I ran - “1901 Any street. Make offer. Call xxxxxxxx.”
Built up my buyers list as well.
Peace,
Richard