We buy US rental stock.. you own property you want to sell for cash today

Jay
Haven’t posted for a while… this is a GREAT idea… with the caveat of …. if you aren’t going for the jugular on price… one of my investors approached me – he has had a fabulous run so not needing to firesell but I sent to him and would send to anyone interested in this…

QUOTE

I literally don’t blame you (currency play)– obviously we did the currency play on the commercial property and I am about to avail of it again on a personal level. In my very very humble opinion, holding costs in ATL outweigh any benefits in the main stream and prices are fairly plateau’d as a much larger market than Vegas.

As you know, I really like Jay – met him, eyeballed him and would be incredibly okay with anyone selling to him – SO LONG AS HE IS NOT TRYING TO LOWBALL TOO SIGNIFICANTLY. In fact, I have missed that thread but would send to the collective if if if….(NOTE – “found!”)

Jay will most likely be looking to lowball as he is a cash buyer and will take the property “as/is, where is”.

There is a significant value to that and I don’t dispute it… it is tough to sell to the top of the market that are FHA home buyers with a tenant in situ.

Here are the points/steps that I would consider very very carefully in your shoes.

WHY CONSIDER A LOWBALL OFFER FOR CASH BUYER?

Get and arm yourself with 3 solid good sold comps within the last 6 months for your property within a 1/4 mile to 1/2 mile radius (I can take a look if you like) – be brutal with the condition of your property – BRUTAL… i.e. Do not assume that yours can compare to the “completely rehabbed” property – but also ignore any short sales on the market.… BE CONSCIOUS of your justification of sales price.. The truth is that if you were asking me to sell your property for you, we would probably evict the tenant, then have to put a good 3–4k into it (not to mention a month down time with loss of rent and holding costs) to bring it up to the lesser of the 3 properties… everyone but everyone (unless a short sale) is rehabbing prior to sale so factor that in…
Assume that ANY other agent would sell your property for 5% so deduct that as seller would have to pay that
SO.. Now we are deducting 5-6k for rehabbing and loss of rent and deducting 5% for the commissions you would otherwise have to pay.

SUMMARY OF DEDUCTIONS FROM BEST AND CLOSEST COMP SOLD PRICE:

2 months loss of rent during sale (6 weeks in general to actually sell but you have holding costs of taxes/ins)
5-6k for rehab for sale (padded for limited lender required repairs)
5% for agent commissions (generally 2% to the seller’s agent which is “your side” and 3% to the buyer’s agent)
Whatever you value the expediency of a certain sale to be = ?? $2-3k – it would take a month’s notice to evict your tenant and what will the AUD do in that time frame? If FEDS here don’t raise rates you could see AUD bounce back up type thing…or it could drop – this is the crystal ball concept I hate but it is a factor if you believe the AUD may recover… or that you could put the $$ to a better currency play regardless. Opportunity cost to getting your $$.

Don’t be greedy but also be firm. The above deductions would get you to your net sales price.

THAT is the price that you are looking for from Jay, and that is the price when I am buying and arguing a lowball sale, I argue. It is FAIR and frankly any buyer or seller should think the same.

Thus there is a VERY VERY real dollar value that you can work on for this….and DON’T forget the time involved with a regular sale – you are looking at 6 weeks from offer to closing but can’t list until the house is READY to list and generally evicted tenants (assuming that you even CAN evict and aren’t mid term on a 1 year lease), don’t leave properties in the best of conditions – especially longer term tenants ; )

This would make Jay’s rather clever idea to offer to buy great properties a VERY good idea for you as well. There is nothing better than a cash buyer IF he isn’t trying to rip you off or ask for more of a discount – which I seriously doubt he would. He just knows he is in for a good house in a good condition.

UNQUOTE

I have applied this strategy in my own investing life and I can’t be a stronger proponent. I will never buy again in ATL but that is because I truly HATE the costs of triple taxes, triple holding costs – and that is on very smooth sailing properties…

Me.

• This reply was modified 8 years, 7 months ago by  emma171. Reason: Typo's
• This reply was modified 8 years, 7 months ago by  emma171.
• This reply was modified 8 years, 7 months ago by  emma171.

I have applied this strategy in my own investing life and I can’t be a stronger proponent. I will never buy again in ATL but that is because I truly HATE the costs of triple taxes, triple holding costs – and that is on very smooth sailing properties…

Hi Emma

What are you referring to when you say triple taxes and triple holding costs?

Cheers

Sorry – Jay – just got – went to spam. In Bahamas this week working on my rehab down here.. not back Vegas until mid October!

Yes – very aware that ATL taxes are deemed vaguely “norm” but I don’t subscribe to that. Why I like cities where alcohol, gambling and tobacco taxes support the essential services paid for by property taxes in other places.

No, I wouldn’t buy in Toledo for all the tea in China either mind you. I like the odds stacked far higher in my favor.

Ziz – widget for widget Vegas property taxes are 1/3 the level of taxes I pay on the same square footage house in Vegas. Literally. In terms of repairs – if I spent over $500 a year on one of my properties in Vegas on repair/maintenance I would topple over backwards and it would be an a/c most likely broken. In ATL blasted gutter cleaning and repair alone can crank the $$…again – if you have your chance, buy anywhere that it doesn’t snow, rain,has grass, has trees… oh, yes a bunker in the desert works well :)

• This reply was modified 8 years, 7 months ago by  emma171.