Rental Property Investor · Orlando, FL · Member since 2008 · 45 posts · 0 votes
Has anyone ever marketed a rehab for potential buyers before the rehab was even complete?
I'm rehabbing a home now, and it's almost done. However, in an effort to get potential buyers interests, the outside was done first (there was little to do). I'm thinking of having these buyers drive by if they need to, but tell them that the home is almost done.
Has anyone done something like this? If so, what do you think are the potential pitfalls? One I can think of is that buyers will want to see the inside, and not being able to see it will turn them away.
It depends on how far along the inside is. If there are no fixtures in the bathroom/kitchen then NO. If there is still missing sheetrock then NO. If you're down to doing everything except SOME of the light fixtures/fans, and have yet to tile/carpet the FLOORS and paint the walls then YES.
The average person cannot visualize the finished product. But they can visualize various (2) colors of paint on the walls, two choices of tile and two choices of carpet. More than 2 choices and you're asking for trouble.
I have thought of doing this too - early marketing. Anything to get an offer in ASAP. But I agree don't show the inside if its not clsoe to done.
What do you guys think of offering incentives to early close - say a granite counter instead of a formica one for example? Or color of tile or paint if offer placed before "X" date?
When we were building houses I would start selling before the slab was poured. I would advertise things like pick your colors, carpet and tile.
I have done that with rehabs. More or less if I was able to sell and collect a large enough deposit I was always ok with it. You just need to see if your potential prospect can see what it will look like. Which is rare.
reiwalf: I don't personally rehab properties so take this for what it's worth. However a buyer of mine that's bought a few rehabs from me actually lists the property right after he buys it from me, I did ask him about this one time just out of curiosity. He told me you can't say the wrong thing to the right person and you can't turn away the right buyer. What he meant by that is if he's rehabbing it and contracts it before it's done, then he already is looking for the next one to do. He says rarely has he sold a property during rehab but it doesn't hurt to have it listed just to have it listed. One last piece of advice he gave as well, he said make sure you don't complete the rehab to their liking b/c if they don't end up buying then you've got blue carpet instead of tan or white :roll:
What do you guys think of offering incentives to early close - say a granite counter instead of a formica one for example? Or color of tile or paint if offer placed before "X" date?
Diane
Incentives do work if they're really interested or even just sitting on the fence. I offered a reduced security deposit or two weeks free rent for my rental in exchange for a 16 month lease and the tenant accepted on the spot. In my photography business I offer an early booking discount as well.
Just my experience, but I would never market a property until after it's staged...
You only get one opportunity to make a first impression, and any buyers that might show up during the rehab and not find the house to their liking, certainly won't come back later.
But those same potential buyers -- had they shown up only after the house is completed and staged -- might really like it.
By showing a potential buyer before the house is completed, 99 out of 100 times you're just losing a potential buyer...
I begin to market mine as soon as I close on them. But also, most of my buyers are out of state and are a couple of weeks away from viewing the product so I normally have hem finished by then.
I used to market mine before they were finished but found that either 1)potential buyers couldn't see past the rubble or 2)if I did get it under contract the buyer then thought that they could come by every day and ask my contractors to "change this" or "fix that", as if I was building them a custom home. It became a nightmare.
Besides, all of my buyers have to go FHA now anyway, and I have to wait 90 days before I can get them under contract. So what's the rush?