There’s a few apartment buildings in my area that are for sale and in the add it states that “owner is retiring”.
Question: In your experience, when a seller makes it a point to state he/she is retiring, does this generally mean that the seller is somewhat motivated sell?
Well, if they’re retiring, I’d suppose they’re motivated
in one way or another.
– older feller that wants to spend the rest of his
days fishing, rather than collecting $ and managing property
– health reasons
– rental property “wasn’t his thing”…he wants to go back to
cabinet making/mowing grass/his old job…
The key is finding out why they’re “retiring” and make sure they’re not
trying to dump any property that has some major
issues that would make anyone motivated to sell should those
problems come to surface.
Doesn’t really matter IMO. Analyze the exact same way you would any other property, make the exact same offer, and if hes motivated he might take it…if not oh well. Retiring doesn’t mean squat, he might want to retire NOW or he might think the property is worth much more than it is and put it up for sale 40% over market for the next 2 decades until inflation finally catches him and he can retire.
You can try calling his realtor and trying to feel it out, see if she has any indication how motivated he is.
If the seller is retiring then to me that does mean something. If they are old enough to retire then that means there is a greater chance they have some or a lot of equity to work with. This means there is at least a chance at getting a big discount.
For example I had a deal on a 34 unit apartment that was bringing in $8,000 a month in rent in great condition, selling for $179,900. I put a bid down on a Friday, but another investor put a bid in on Thursday. I made my bid $185,000 and told them that if this other bid falls through I will be ready. But of course the financing went through so I missed out by one day. They owned it for over 30 years and had it paid off the last 28 years. I would have had it bringing in over $12,000 a month within 6-months.
Being retired means there is a greater chance of equity. Equity is what you need. You will want to pursue retired individuals.
OR…the words “owner retiring” could be placed in the ad to grab attention and generate more leads. Everyone selling something is motivated in one way or another. Figure out which price point makes you money and negotiate.
Unfortunitely negotiating with even motivated sellers does not mean a lot today. There are thousands of motivated sellers in my area that would be happy to negociate. But their properties are over priced because they owe more than it is worth. It doesn’t matter how motivated a seller is if there is zero equity in the property. At least if the person is older there is a greater chance of some equity.
You want the equity that the seller worked hard for. If the seller has no equity then what’s the point. I guess you can try and do a short sale, but even that is can be over priced. You always need to run the numbers and only offer what you can, but retiring individuals have a greater chance of having equity you need to make the property cash flow. I would give a little extra attention to properties that are paid off or have the potential to be paid off.
…but remember, you don’t need to be 70 to “retire”. I can put a home up for sale at the age of 30 (which I just bought two months ago) and say I’m retiring.
“Owner Retiring” is like “Free” in other type ads…it’s not always the best deal.
I agree… you have to find out the seller’s TRUE motivation by actually SPEAKING to the guy.
gasp
Yes… I know a lot of people these days rely SOLELY on email, fax, and brokers, so this may seem like a foreign concept.
This is true…I do love email.
Especially since I can copy paste the same generic response to most of my emails it saves me tons of time. Plus at work I can email all day but don’t have the ability to sit on the phone. It allows me to keep up with the world without having to p**s my boss off. Hopefully my boss is gone soon and I will be my own boss.