Tonight I want to talk about how to sell your house fast; selling your investment property and what you need to do and how to get rid of it.
The first thing we want to talk about is the type of investment you have and what that house is to you right now.
So really when you talk about Real Estate Investing from an ownership perspective you have 3 types of ownership: Rental Property, Fix and Flip or Rent To Own Property. Each one of those will vary when it comes time to selling.
Usually a Rental Property it’s called Buy, Rent and Hold because you are buying it with an opportunity to rent it out and you want to hold it out over a long period of time. The time can vary anywhere from 5 year to 10 years or even 20 years. A rental property is usually held longer.
When it comes time to sell a rental the renters need to know that you are trying to sell it with the expectation that somebody else, another investor, is going to buy it. Now if it's a single family home they may get nervous that it’s being sold and that the new purchaser may want to get it vacant to move into it, or even raise the rent
Sometimes, people are greedy and they are always trying to get top dollar for their property. They say they have owned this property for many years and put in all this work so they want to get all that money out of it.
What I would recommend, is you look at the prices in the neighborhood. Let's say you have a property in the neighborhood where comparable prices are around $350,000.00. What I would do is put it up for sale at 5-10% below market value. Don’t be greedy.
So total cost of selling that house with a Realtor fee can be 10-15%. That means your $350,000.00 home that you are selling will only bring you about $300,000.00 to $315,000.00. You made your money for years as a rental so just sell it and get rid of it and not worry about carrying it anymore. Assuming you want to sell fast.
The thing about Rent To Own properties is that you DON’T have to worry about selling it because you already have a seller in place. The renter is actually a tenant buyer and hopes to buy your property in your 3 to 5 years depending on the agreement.
Selling a Rent to Own investment is pretty easy because you do not have to market it at all. That being said, if the tenant buyer decides to move out, then you are in a different situation. So Rent To Own is easy to sell because you already have the seller. It’s also a private sale so you don’t have to worry about paying for a Realtor.
Fix and Flip is all about you buying a property and flipping it as quickly as possible. A lot of people think that they are going to put this amazing renovations project in place and that everyone is going to want to buy their property.
So let's say it's going to be a 3 months renovations. We do the 3 months renovations and put it on the market and sell it in one month. This hardly never happens!!! Usually properties can take 1-3 months to sell. I always recommend that when you do a budget that you always allow for 2 or 3 times more than you think it will take to sell the property.
When you list your fix and flip don't try to be too greedy. Look at the market always go 5-10% below fair market value. You always want to have a fire sale price.
So when people are looking around for prices and they see your house and as long as it's comparable to another house in the neighborhood and that house is 10% higher, why wouldn't they buy your house. You have to make it financially attractive.
Make sure you go to market with that expectation that you are going to get a lot less than what you thought you were going to get or at least be prepared to something less.