Selling a Poor Performing Property
I've been investing out of state for several years now. Most of my properties are great. However, I have one that I bought in a bad area (crime, etc). I've tried to get rid of it, but have not been able to sell it for my life. I've been shouldering the payments for over 2 years now and can no longer afford it. I've been in touch with several wholesalers and it always end with them deciding not to move forward with it.
Any suggestions for getting rid of this property? If I can't sell soon, I'm just going to have to let it foreclose with will really hinder any further investing I do in the future. (FYI I own 11 other properties in the same part of the country). Thanks!
Thats interesting with the market being so hot lately. Are the wholesalers giving you the price or are you negotiating with them? If I had a property that did not perform and that I was losing money on monthly, I'd probably just sell it at a discount and be happy if I broke even on it. Also if you list it with a realtor, that will expose it to a lot of buyers, even with the 6% commission you would likely do better than selling it to a wholesaler.
I'm actually more than happy to sell at a discount. I'm basically willing to sell it for what I owe on it. Like I said, it's not in a great area, but that said I always thought there would be someone willing to buy in these areas. So far, it's been negotiation, but like I said, I'm perfectly happy to take a loss.
Quote from @Danielle Wolter:
I'm actually more than happy to sell at a discount. I'm basically willing to sell it for what I owe on it. Like I said, it's not in a great area, but that said I always thought there would be someone willing to buy in these areas. So far, it's been negotiation, but like I said, I'm perfectly happy to take a loss.
You're not happy enough to take an actual loss beyond your sunk costs, since you're only willing to sell it for what you owe on it. Apparently it's not worth what you owe on it or it would be sold already. So take less than you owe and bring a check to closing. Sometimes that's what happens on a loser property. Forget about the psychology of past actions, because you've already spent that money carrying it and are not getting that back. If it's really that bad of a setup - no one to rent to, no one interested at basic appraised value - then you need to sweeten the pot, which usually means pricing in a discount large enough to create movement.
Think of house sales on a continuum, from let's say $1 to $1 billion dollars. If you offered this house for sale for a dollar, you'd have a line 10 feet deep down the street to buy it. If you offered it for a billion dollars, you'd sit on it for 40 more years. All you need to do is find the sweet spot where there's enough interest to pay for it.
Hi Danielle...I work in the Memphis market and yes - there are some areas that can be a hard sell. I work for a PM company and we manage many doors. I may have some investors that may be interested. I would love to chat and see what we could come up with. Just let me know if I can be of any service. Thanks!
I'd love the connect. It's a commercial property - 3 units in a building.
Quote from @Terez Jones:
Hi Danielle...I work in the Memphis market and yes - there are some areas that can be a hard sell. I work for a PM company and we manage many doors. I may have some investors that may be interested. I would love to chat and see what we could come up with. Just let me know if I can be of any service. Thanks!
I'd love to connect and see if there is interest.
Quote from @JD Martin:
Quote from @Danielle Wolter:
I'm actually more than happy to sell at a discount. I'm basically willing to sell it for what I owe on it. Like I said, it's not in a great area, but that said I always thought there would be someone willing to buy in these areas. So far, it's been negotiation, but like I said, I'm perfectly happy to take a loss.
You're not happy enough to take an actual loss beyond your sunk costs, since you're only willing to sell it for what you owe on it. Apparently it's not worth what you owe on it or it would be sold already. So take less than you owe and bring a check to closing. Sometimes that's what happens on a loser property. Forget about the psychology of past actions, because you've already spent that money carrying it and are not getting that back. If it's really that bad of a setup - no one to rent to, no one interested at basic appraised value - then you need to sweeten the pot, which usually means pricing in a discount large enough to create movement.
Think of house sales on a continuum, from let's say $1 to $1 billion dollars. If you offered this house for sale for a dollar, you'd have a line 10 feet deep down the street to buy it. If you offered it for a billion dollars, you'd sit on it for 40 more years. All you need to do is find the sweet spot where there's enough interest to pay for it.
I'm more than willing to take a loss. I think I'm struggling with getting offers on it at all. Maybe I need to change my approach. Appreciate the insight!
Quote from @Alex Evans:
Hello @Danielle Wolter
I work for an investment firm here in the Memphis Area. I would be more than happy to connect with you and see if the property is something that we would be interested in!
I'd love the connect. It's a commercial property - 3 units in a building.
I'd love the connect. It's a commercial property - 3 units in a building.
before you let it go to a foreclosure, I would try everything else. Maybe explain the situation with the lender and work with them to you get a solution.
I see this a lot, and people don't realize it, but all it takes is one bad deal to bring down a lot of good ones.
Quote from @Terez Jones:
Hi Danielle...I work in the Memphis market and yes - there are some areas that can be a hard sell. I work for a PM company and we manage many doors. I may have some investors that may be interested. I would love to chat and see what we could come up with. Just let me know if I can be of any service. Thanks!
how did these deals turn out??
Quote from @Danielle Wolter:
I've been investing out of state for several years now. Most of my properties are great. However, I have one that I bought in a bad area (crime, etc). I've tried to get rid of it, but have not been able to sell it for my life. I've been shouldering the payments for over 2 years now and can no longer afford it. I've been in touch with several wholesalers and it always end with them deciding not to move forward with it.
Any suggestions for getting rid of this property? If I can't sell soon, I'm just going to have to let it foreclose with will really hinder any further investing I do in the future. (FYI I own 11 other properties in the same part of the country). Thanks!
I'm interested to know what area in Memphis so I know to stay away?
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Sell it owner finance.
Hey Danielle,
What area of Memphis is this property in?
Quote from @Danielle Wolter:
I've been investing out of state for several years now. Most of my properties are great. However, I have one that I bought in a bad area (crime, etc). I've tried to get rid of it, but have not been able to sell it for my life. I've been shouldering the payments for over 2 years now and can no longer afford it. I've been in touch with several wholesalers and it always end with them deciding not to move forward with it.
Any suggestions for getting rid of this property? If I can't sell soon, I'm just going to have to let it foreclose with will really hinder any further investing I do in the future. (FYI I own 11 other properties in the same part of the country). Thanks!
How about renting it through your local public housing authority? I'm a Commissioner on ours, and we are always looking for great landlords who want guaranteed rents. Don't let the words "public housing" prejudice you. Just because people need assistance doesn't mean they are subpar renters. I would reach out locally before throwing in the towel.
Quote from @Eliott Elias:
Sell it owner finance.
OP mentioned he would "let it foreclose", which means he has a mortgage and cannot owner finance.
Quote from @Danielle Wolter:Hi Danielle.
I've been investing out of state for several years now. Most of my properties are great. However, I have one that I bought in a bad area (crime, etc). I've tried to get rid of it, but have not been able to sell it for my life. I've been shouldering the payments for over 2 years now and can no longer afford it. I've been in touch with several wholesalers and it always end with them deciding not to move forward with it.
Any suggestions for getting rid of this property? If I can't sell soon, I'm just going to have to let it foreclose with will really hinder any further investing I do in the future. (FYI I own 11 other properties in the same part of the country). Thanks!
If you are in the position to do so- I recommend you carry the financing for 5 years at low interest (5%?) with a 10-25% down payment. If you do this, require in the carry agreement that the buyer pays a 3rd party, like a title company, to process the monthly payments/collections.
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