By Frank Pulley and William Bronchick
So, you have just finished your rehab and are getting ready to sell it. Time is money, right? The quicker you sell and hopefully collect a nice profit, the sooner you can reinvest that money into other, possibly bigger deals. If you have a hard money loan, you can get that paid off before you incur more interest and possible penalties. If there is enough profit left, maybe you can do something nice for your family.
To sell your property quickly, you must have a plan and put all your ducks in a row. That takes time, effort, and knowledge.
Here are 8 Tips to make sure you sell as quickly as possible and still make a profit.
- Look at the Numbers Before you Make Your Offer. Success in your deal starts early when you calculate the numbers for your deal. Making sure you have accurate fix-up numbers (allowing a little extra 10-15% for “surprises”), holding costs, and closing costs. Determine a fair selling price so that you know what to offer. The old saying, “you make your money when you buy” is so true! If you cannot make an offer that works for you, then walk away. There will be others.
- Fix Up to the Level of Your Neighborhood. Investors either tend to “cheap it” by cutting corners on quality or over-fixing and thus spending too much. By visiting some open houses in your surrounding area in advance, you will have a good idea of what you need to do to compete but not overspend. Add a few little niceties such as handles on the kitchen cabinets and/or nicer light fixtures. These do not cost a lot extra yet add selling appeal, separating you from your competition.
- Determine a Fair Price. Work your numbers so that you can sell just a bit lower than your competition, if possible. It does not have to be a lot; $1000- $1500 may just do it. Nothing is worse than having a property sit on the market for a long time and then having to reduce the price. It opens the door to a lot of lowball offers.
- Maximize Curb Appeal. If you can impress your potential buyers the minute they pull up in front of the property, you will be miles ahead. Make sure that the house has been painted a conservative color with a complementing trim color. Make sure you have a nice quality and good-looking front door. Front and back yard landscaping needs to be flattering to the overall looks of the property too.
- Do Quality Work. It is vitally important to make sure the work done on your rehab is quality work and that it is done right. Nothing will turn a buyer off more than finding shabby work tucked away in a nice-looking property. Vette the contractor and or subcontractors before starting the project and make sure to inspect the work as it progresses. Most of your hard money lenders will do this for you as work progresses and before they pay your workmen but just remember the buck stops with you. Do what you can to keep everyone on schedule but plan on a bit of extra time in calculating your costs.
- Stage the Interior. You do not have to spend thousands to stage a property; something is better than nothing at all. Generating “Points of Emotion” is important throughout the property. An example of this might be an Italian cookbook with a pkg. of pasta and a pan on the stove with some potholders. In the living room possibly a single chair with a reading lamp and a book lying in the chair. These items help connect the buyers emotionally to the property. People try to justify a purchase with logic, but the emotion is a huge factor in a buyer’s decision to purchase. Obviously on high-end properties, staging needs to be a lot more elaborate.
- Spread the Word. It is a known fact that people like to have their loved ones living near them. What better way to spread the word than letting the neighbors know about the property and possibly offer a reward of some sort if they find you a buyer? If we have an open house scheduled, we normally offer a private open house for the neighbors a couple of hours before the scheduled open house. We just put out flyers on the neighbors’ house up and down the block a day or so beforehand.
- Use a Real Estate Broker. Did you know that 95% of all properties sell through the MLS? There is a reason. A good, investor-savvy, real estate broker is worth their weight in gold. A good broker knows how to properly price and promote your property. They may even hold a “Broker Only”, open house so that your rehab is getting promoted to your potential buyers early and help to peak interest.
Sounds easy right? It is not easy, but the effort you put into the project beforehand in setting yourself and the property up for success is well worth the effort and will differentiate you from the average investor.
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