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- Los Angeles, CA
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What I learned fro selling a property
I own a few rentals. They are all single family homes. Last year, I decided to transition to multifamily investing last year. I have been reaching out to operators to see if they would be interested in selling in selling their properties.
One of my questions when I first started reaching out to owners and was wondering why I wasn't getting counter offers. Over time I learned that if you don't get counters or cooperation from the seller it is because they are not motivated.
The best example of this is myself. I had multiple properties. Most of my properties are doing well and cash flowing. When I get calls, texts, and direct mail I don't respond. When I do talk to a buyer I won't budge on my ridiculous price and I am not compliant when a buyer asks for any financial information. My attitude is if your really want to buy this property you have to buy it above market and with a lack of information. The lack of compliance is due to my lack of motivation.
However, I had one property with a problem tenant who is behind in rent and had work orders every month. It was driving me crazy. There was a definite motivation from my end. Therefore, I was more open to the seller requests. I lowered my price. I forwarded requested financial information to the buyer in a timely manner. Additionally, I was open to giving credit to the buyer for the back rent. This is because I valued solving the pain point as quickly as possible over maximizing profits.
Luckily, I was able to sell a little bit over the amount of money I was all in.
What I took away from this lesson was that on the acquisition side we should focus 80% of my effort to the 20% of the leads that are actually motivated. 80% or more of our leads will be unmotivated to sell or want to sell for a ridiculous price. Time is the most precious thing we have. So we should invest 80% of more of our resources to the 20% or less of motivated leads who have a problem to solve and are willing to sell at a good price that maximizes the ROI.
- Jason Malabute
