How to market a property that is owned to investors?

Question

Hello Everyone,

After two years of waiting and educating, I finally have a property to sell, that I own through Hard Money and need to offload. I have tried to list it on BiggerPockets marketplace, but nobody seems to be on there, or at the least, I have no bites. I have gone to Facebook to post the details on a couple Investor offmarket groups and will continue doing so. I have also called "local" We Buy Houses companies (I am a competitor with my 'We Buy Houses In Central Texas' company). My next strategy is to list it on the MLS in two weeks if I do not get offers on the property. Does anyone have suggestions on better ways to market, something I may have missed? I do not have a buyer list and was wondering if it is unethical to comb email addresses from the Facebook groups and generating a list to email. But, I am uneducated about the morality or legality of such operations, especially since I do not have an opt-out option due to the uneducated aspect.

All suggestions, critiques welcome. Thanks everyone in advance.

Charlie MacPherson · Answer

@Kyle W. A universal truth is that you'll get the best offer be exposing your property to the most possible people.  Think of the universe of buyers out there.  The "We Buy Houses" wholesalers probably have a list of a few hundred of "buyers", most of whom aren't anything more than dreamers.  Out of those, they might have 5 who will actually buy a property.  They'll try to market your property to the few hundred, many of who (maybe even most) will add a markup to your price and try to wholesale it, even though that's unlicensed real estate brokering and illegal in most jurisdictions.

Compare that to working with a licensed real estate agent.  They have access to the one source that still sells the most houses - and most by many orders of magnitude.  That's the MLS.

A good listing, properly priced, well written and with good photography will expose your property not to the 5 wholesaler customers who might buy it (and then only at a deep discount), but to many hundreds of thousands of buyers - most of whom will expect to pay a full retail price.

But, many complain, "I'll have to pay a commission!"  Yes.  Yes, you will - and it will be worth every penny because you'll get a higher price for your house.  If your agent is sharp, you'll only deal with pre-qualified buyers, not tire kickers.But, many will complain, "The house won't pass a VA/FHA/USDA inspection!"  Right, but I promise you that it will qualify for an FHA 203K construction loan and if that's the shape it's in, this is how you should market it:  "Handyman Special - Perfect for FHA 203K loans!"

You'll be eyeballs-deep in buyers who will pay full retail price.  Not a bunch of wannabe "investors" who want to pay you 70% of ARV, minus repair costs.

With so many retail buyers looking for homes, why sell to investors and leave a pile of money on the table?

Good luck!

Theresa Harris · Answer

How much is your hard money loan costing you?  I'd list it on MLS or at least have a couple of realtors come by and give you estimates.  The market is usually quieter around the holidays.

Nick C. · Answer

I think you're doing this the hardest way and exposing the property to the smallest amount of investors possible. Just list it on the MLS asap, you'll expose it to the most buyers and get the highest price with little to no effort on your part.

Tim Delaney · Answer

@Kyle W. What kind of feedback have you gotten from the Facebook groups? If no one is interested do you think you priced it too high?

If you don’t have a buyers list I would suggest trying to find at least one or two very active investors and learn what their criteria is for buying, then in the future focus on that criteria so you know you’ll have a buyer. Get to as many meetups as you can to try to find these people.

Joshua Janus · Answer

I would advise finding an investor friendly realtor. You really want someone that invests in their market themselves and understands the numbers. They should be able to determine the COC, annualized return, estimated ARV if a BRRRR, accurate rent comps and more. The valuation and market value of a multi family property differs from a single family and you want someone that understands the distinctions. If they just represent first time single family home buyers and aren’t constantly finding off market properties and reviewing deals, you’ll find a better investment through someone else.

Wale Lawal · Answer

Craigslist is also a great way to market deals.

A Real Estate Agent can also help as they have many marketing strategies and tools they use.

How to market a property that is owned to investors?

Most Popular Reply