Approached by realtor to sell investment property - help!

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Approached by realtor to sell investment property - help!

Tyler Beeson
Member since 2021 · 1 post · 0 votes

Hi there - my wife and I bought a home in South Philly in July 2019 where we lived until we moved to the suburbs September 2021. We decided at that point to become first-time landlords and rent our South Philly home. Much to our delight, we ended up with a bidding war, and we accepted a rent offer $300 over ask and locked in a 24-month lease (expires September 2023). Prior to signing, we created an addendum allowing us to sell the property as long as we give 60 days notice to the tenants. 

Fast forward to this week, we received a letter in the mail from a Philly realtor asking if we would be interested in selling our home to his clients. They had looked for a home in our neighborhood that met our specs last year but shut down their search due to crazy market conditions and are now trying to find off-market properties - even if it means paying a premium. The realtor said there is a possibility they would look to purchase our home for more than what we believe is market rate, which would be ideal for us, but not necessarily for our tenants.

Our tenants have been great. We have had a fantastic experience thus far with few issues and decent monthly cash flow. However, we were planning on selling the property after the lease is up in September 2023 anyway to avoid capital gains (having lived in the property for 2 years and selling within 5). Bottom line is my wife and I want to do right by our tenants, but we also made a decision to treat this like a business as we set out towards creating financial freedom.

I would love to hear what anyone else would do in this situation (should an attractive offer actually pan out). Has anyone else been in a similar situation? Our thoughts are, in no particular order: 1) explore the option of the buyers taking over the lease; 2) longer close until the Fall of this year, or; 3) closing sooner and notifying our tenants that they must find a new place. 

A longer close makes us nervous in case the deal falls through over the next 6-9 months and our tenants find a new place to live, leaving us with a vacant property, but curious if that is a valid concern. Any thoughts/advice/insight on the situation as a whole are appreciated! Thank you!!

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Mackenzie Grate
Interior Decorator · Ulster County, NY · Member since 2020 · 204 posts · 177 votes
4y

Congrats on the offer! Seems like a great thing. Here's a couple of initial thoughts just after a quick read.

1) What is the exact number? How do you know the offer is really above market rate? Make sure you do your research. Sometimes people can say it is, but it's not really true...

2) Do you have to sell it tenant-free? Could it be worked into the deal where they inherit the tenant and finish their leases. I know the rules are different but here in NY, the buyer would have to inherit the tenants. 

3) I'd be hesitant to do a long term close. I'd rather just hold off until the fall to see where the prices are. If you are locked up in a sale and a better offer comes along, you are just that...tied up. Who knows, the market could be even stronger then. I would keep their contact information and just reopen the conversation then.

4) If it's an issue of the tenants having to leave, is there any way you can have them help relocate the tenants as part of the deal?

Bottom line, take your time and don't rush into any decisions. Do your research. I'm sure there is a win/win available for everyone. If not, hold on to it and wait until there is.

Congrats again! That's exciting to get a great offer when you aren't necessarily expecting it! :)

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  • Mackenzie Grate
    Interior Decorator · Ulster County, NY · Member since 2020 · 204 posts · 177 votes
    4y

    Congrats on the offer! Seems like a great thing. Here's a couple of initial thoughts just after a quick read.

    1) What is the exact number? How do you know the offer is really above market rate? Make sure you do your research. Sometimes people can say it is, but it's not really true...

    2) Do you have to sell it tenant-free? Could it be worked into the deal where they inherit the tenant and finish their leases. I know the rules are different but here in NY, the buyer would have to inherit the tenants. 

    3) I'd be hesitant to do a long term close. I'd rather just hold off until the fall to see where the prices are. If you are locked up in a sale and a better offer comes along, you are just that...tied up. Who knows, the market could be even stronger then. I would keep their contact information and just reopen the conversation then.

    4) If it's an issue of the tenants having to leave, is there any way you can have them help relocate the tenants as part of the deal?

    Bottom line, take your time and don't rush into any decisions. Do your research. I'm sure there is a win/win available for everyone. If not, hold on to it and wait until there is.

    Congrats again! That's exciting to get a great offer when you aren't necessarily expecting it! :)

    3Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    4y

    We are in a hot market like lots of places; I get letters and phone calls regularly from realtors and investors. That's what they are........letters and phone calls. You need to decide what you want and proceed down that path. Ignore the noise.

    2Reply
  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    This is just a flier they sent to everyone on your street as part of a mass mailing.  It is a hot market right now and everyone is paying a premium for homes.  If you do decide to sell it doesn’t hurt to check to see what they would offer but if they offer it off market they would offer the same or more if they were bidding against others in the open market.  

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    This is far from an offer as some have suggested.  It is simply a marketing flyer that you and probably 100+ other owners got.  We get them all the time.  Like, weekly we get at least 1 or 2 of these.  From realtors or wholesalers looking to buy homes.  

    There is zero harm in you pursuing this and seeing if this is real.  We have done this from time to time over the decades and have had zero luck.  I have talked to quite a few people who have gotten these and also have had zero luck.  The worst, in my opinion are from wholesalers who are just looking to get your house on assignment then mark it up and sell it.  They have been 100% timewasters.  

    If this person is a realtor you may have better luck but even then we have found when we reach out they are non responsive.

    My point isn't to be negative but to help manage expectations.  No harm in reaching out as selling is something you are considering, maybe not now but in the near future so maybe this is kismet.  

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