When a Flip Doesn’t Sell – Did You Run the Numbers for It?

July 9, 2017

Flipping houses has been a profitable business for many, and it still is. It is a bit more challenging as the inventory of
Dean Graziosi

When a Flip Doesn’t Sell – Did You Run the Numbers for It?

July 7, 2017

Flipping houses has been a profitable business for many, and it still is. It is a bit more challenging as the inventory of
Dean Graziosi

When a Flip Doesn’t Sell – Did You Run the Numbers for It?

July 5, 2017

Flipping houses has been a profitable business for many, and it still is. It is a bit more challenging as the inventory of
Dean Graziosi

Could Your Home Sell to an Investor?

May 15, 2017

First and most important, the home should be one in an area renters want to live. It must also have some or all of the features they want, and they want pretty much the same thing as home buyers.
Dean Graziosi

5 Reasons to Sell Your Home Now

March 28, 2017

Whether it’s the right time for you to sell your home or not is entirely based on your desires and situation. However, if you haven’t considered all of these five factors, do so and you may change your plans.
Dean Graziosi

5 Reasons to Sell Your Home Now

December 4, 2016

Whether it’s the right time for you to sell your home or not is entirely based on your desires and situation. However, if you haven’t considered all of these five factors, do so and you may change your plans.
Dean Graziosi

5 Reasons to Sell Your Home Now

July 15, 2015
2015-07-15-1436924197-8946047-lkjhg-thumb

2015-07-15-1436924197-8946047-lkjhg.jpg

Every day more homeowners exit “underwater” status, owing more on their mortgage than their home is worth. Others have owned long enough to have kept some equity through the crash and partial recovery. However, many are sitting on the sidelines waiting for more market price improvement, or they simply do not want to buy another home, so they stay put.

It’s not hard to understand the “waiting” decision, but perhaps it’s time to at least take a look at some reasons that could change your mind. This isn’t advice to sell now, just the presentation of some factors that may not have entered into your decision process when considering listing your home. If they change your mind or motivate you to list, it should be because you’ve run the numbers and considered all of the options.

1. Inventory is low: Supply and demand is always in control in a marketplace unless there is undue interference by government. Inventories of both new and existing homes for sale are historically low right now. Low supply usually creates upward pressure on prices. Many studies and surveys are also showing that buyers are returning to the market, though more of a stream than a river of demand. However, combine low inventory and increasing demand, and you may get more for your home than you think.

2. Mortgage rates are low: Whether you believe that mortgage rates are going up soon or not, many would-be buyers are concerned that they will lose buying power if they wait too long. It helps sellers when buyers can afford more home due to low mortgage rates. There’s the other side of this coin as well. If you sell now with the plan to buy right away, you’re getting the same low interest rate advantage. The money you take away from your sale, though possibly somewhat lower than if you wait a while, will go farther in financing another home.

3. Some markets scream sell: If you own in an established area with a history of stability and high demand, it makes a difference. Real estate is local, and while national influences bear on prices, the right location can make a major difference in your cash out on a sale. Check the number of sales in your neighborhood versus others in the market area to see if the demand is higher.

4. Real estate brokers are hungry: The downturn in number of sales and homes in the inventory is not just a problem for buyers. Real estate agents are selling fewer homes, and that means they’re taking home less money. They don’t make money in any other way than getting to the closing table. You can probably negotiate a lower commission rate for your listing in the current market climate.

5. Don’t forget holding costs: Every day you keep your home you have costs to stay there. Waiting a year to get a 1 percent or 2 percent bump in selling price can be a mistake if your costs exceed that amount. If there is a real estate property tax increase, that’s extra holding cost. Air conditioning, heating, plumbing and electrical problems can jump up unexpectedly. Consider your normal repair and maintenance costs in relation to an unknown bump in price if you wait a year or more.

Whether it’s the right time for you to sell your home or not is entirely based on your desires and situation. However, if you haven’t considered all of these five factors, do so and you may change your plans.
Dean Graziosi

Could Your Home Sell to an Investor?

January 23, 2015

If you’ve been thinking of selling your home, or if you need to sell, there aren’t many markets out there crawling with buyers. The first time homebuyer market is still in the cellar. The Millennial Generation are still at home with parents for the most part. They’re not buying for multiple reasons, from sketchy graduate employment prospects to high student debt.

Existing home sale prices are improving. The FHFA (Federal Housing Finance Agency) report of home prices for November 2014 shows an increase nationally of 0.8% on a seasonally adjusted basis. However, sellers as a general rule across all markets are not enjoying high demand. The NAR (National Association of Realtors) report of existing home sales for the same period provides these data points:

• November’s sales declined by 6.1% from October, only slightly higher by 2.1% from the previous November.
• All regions tracked showed a decrease in the number of sales, though prices were up slightly.
• It takes approximately 65 days on average for a home to go from listing to contract, slower than the 56 days from the year before.

That’s kind of a mixed bag, and as far as DOM (Days on Market) an average number includes all of those “hot” markets with buyers competing and writing contracts in hours to a few days. There are a whole lot of sellers out there sitting on listed homes far longer than the average. Some markets are always slower, with DOM figures approaching six months or longer. So, if you need to sell your home, or want to and aren’t getting the job done, is it a candidate for a rental property investor?

No Discount — No Purchase

Don’t even think about it unless you can sell at a price at least 10% or more below its true market value. If you owe too much on it to do that, or you just don’t want to settle that low, then keep working the retail market. Savvy investors want to lock in some profit at the closing table.

The good news is that if you can do this, you could be selling very quickly. Investors are constantly monitoring their markets and looking for deals. Many of them pay others to deliver good deals. If the numbers work, they can often offer cash and a closing within 30 days. But, the numbers have to work.

The Numbers

Let’s do an overview of the things rental investors want in a property:
Rental demand — First and most important, the home should be one in an area renters want to live. It must also have some or all of the features they want, and they want pretty much the same thing as home buyers. So, if your home has a non-functional floor plan or antiquated appliances and other features, it’s a tough sell.
Cash flow — Most rental property investors use leverage. They will be using a mortgage, and they must be able to rent the home out for a positive profitable cash flow over their mortgage and expenses. Here is where you need to do some research. Check out the rentals in your market with similar features. Call like a renter, get real rent numbers. Then use a mortgage calculator at current rates and the discounted price at which you’ll sell to see if, taxes and insurance included (20% down), the home can rent out for at least a double-digit positive cash flow to cover other expenses with a profit.
Appreciation potential — Like any other homebuyer, a rental investor wants the asset to grow in value over time. Of course, you can’t predict the future, but you can see how your neighborhood has performed over time. If the area at least keeps up with the national average appreciation or exceeds it, you need to verify that with data.

None of these three research items require much time or effort. You can get data for recent property sales from a real estate agent to determine if you can sell at a discount to value. If your home meets the criteria, you could be a target for an investor. But, they need to know you’re out there. First, pull together your research so you can present it. No sales pitch is necessary, just reliable data they can verify.

Go to Market

This can be as simple as going on Craigslist and placing a free for sale ad targeting investor buyers. It’s different than a regular for sale ad. You want to put your research into a concise ad that will attract their attention with keywords like ‘rental home for sale, great cash flow property, discounted rental property, cash flow home at a discount,” etc.

Then just summarize your data, something like: “Great cash flow rental home for sale in high demand neighborhood with great value appreciation history. Buy at double-digit discount to value, with rental income potential that will generate approx. 20% return.”

The 20% number came from an example home that would rent out for a monthly payment around 24% higher than the mortgage, taxes and insurance, allowing for other expenses. If the numbers work, look for a call within hours to days, as investors or their birddogs are out there looking.
Dean Graziosi

Weekly Video Blog #141 – Why the Heck Does Dean Go and Have to Sell Things?!

January 16, 2015
mqdefault2

Weekly Video Blog #141 - Why the Heck Does Dean Go and Have to Sell Things?!

Visit https://www.facebook.com/deangraziosipage Welcome to Dean’s Weekly Video Blog as we talk about how to make profits in today’s real estate market… Bet…

http://www.youtube.com/watch?v=JP6i77IKzZk

Need to Sell but Can’t? Turn Your Home Into an Investment Property

September 1, 2014

The real estate and mortgage crash did a lot more than just throw millions of homeowners into foreclosure or bankruptcy. It also threw many into underwater positions in their mortgages. They owe more than their homes are worth. Even if they’re not in a negative hole, many are not sitting on enough equity to sell without bringing cash to closing. The closing costs and real estate commissions can be as much as 7 percent of the selling price.

Articles have surfaced recently about “reluctant landlords.” These are homeowners who need to move for a job or other reasons and they aren’t able to sell their homes. They end up renting out the home with the goal of selling it as soon as they build enough equity to get out from under the mortgage. Some are lucky enough to rent for more than their mortgage payment, but many are taking on negative cash flow. Their mortgage payment is higher than the rent, and they’re paying to rent or buy another home when they move. This doesn’t have to be the case for many, because thinking of the situation as a business opportunity could bring better financial results.

If you’re in a need-to-move situation and can’t sell your home, you may be in better shape than you think. Throw off the negative thoughts and the “sell when I can” attitude and think like an investor. A few investor tools and tips can help you to rent out your home with better cash flow and some nice tax breaks as well.

Don’t think like a victim if you need to move and can’t sell your home. Think like an investor and business person and do your due diligence. You just may have been forced into a really great business decision!


Dean Graziosi