Found a fantastic deal on a house (for my personal home) priced 55% less by bank than the original purchase price. Now I need to get rid of my current house and/or rent it out before I can get a mortgage (approved based on either scenario).
Here's the 20,000,000 question: What is the most affective way to get this advertised and sold with options of: 1. Seller financed (either wrap or land contract), 2. Lease to own, 3. Rent it out. Would a realtor be best for this and/or doing this myself? My goal is to make some money (just a little) off the existing and make a lateral move in personal home mortgage cost. I will be gaining a huge amount of instant equity for future investment purchases.
The adage comes true the first one is the hardest.
Have you ever heard of a round-robin auction? Basically its the process of creating buyer excitement by offering your house using a silent auction process that gets a lot of traffic to your house.
The concept is that you advertise your house on Craigslist, in the Newspaper, and using some bandit signs (if you can), that you are going to be auctioning your house and the starting bid is lets say 50% of what the value really is.
Then when people come to your open house to look, they can write their offer on a bidding sheet.
The key is that all your bidding instructions explain that they are bidding on their "OFFER" and it is NOT an absolute auction.
Then on the night of the open house you call each bidder and ask them to increase their offer over the current high bidder.
Then if you like the highest bid, you can get them to sign an agreement and see if they can close.
Thats always my first method...
The second method of choice would be a lease with option to buy. This a great way to sell quickly if you cannot get a high enough cash price.
To get this going I usually just advertise on Craigslist... that always works best. In this scenario you can lease it to the tenant buyer, and get them to sign an option agreement to buy. Thats where you get your non-refundable option deposit from.
If you live in Texas, check with a local attorney because I think lease options are considered illegal, however there are ways to set it up so its legal there. Most other states its not a problem.
To get the details of these techniques you can google around and you will be sure to find the exact steps to do either process.
Rental Property Investor · Orlando, FL · Member since 2008 · 45 posts · 0 votes
17y
John,
Is this legal? I was looking into this in MI, where I invest, and from the limited research I've done thus far, it seems that you'd have to get approval from the MI gaming commission. In your explanation, you don't include any information about the need to get approval from your state, so I'm curious as to whether this is legal?
Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
17y
Found a fantastic deal on a house (for my personal home) priced 55% less by bank than the original purchase price.
I wouldn't put the cart before the horse. Are you sure that this property is a great deal?
Prior purchase prices have nothing to do with today's property values. Just because some sucker overpaid before does not mean that you are walking into instant equity.
I'm not saying you haven't found a great deal, I just know that whenever I read a post about someone justifying their deal based on "original loan value", or something similar, they are usually a little off base.
Tucson, AZ · Member since 2008 · 945 posts · 45 votes
17y
You should probably check with your state or your attorney, but there should be NO reason you cannot sell your own house yourself--I am planning that very thing. Do you have for sale by owners in MI?
One part of the 5 day sale is you never use the word auction. It is a marketing strategy. Check your local library for the book by Bill Effros. I bought it from Amazon (about $14) because through the library, I had to use the intra-library system, and it took over a month to get it.
[POST EDITED TO COMPLY WITH FORUM RULES]
In a nutshell, he tells you in the book how and why to do all aspects ot the sale.
I'm tweaking mine a bit, and my questions now have to do with the wording of the ad itself, and the pricing.
Main points of this strategy is to advertise the property at half, or less thatn what you hope to get for it, in order to draw lots of interest.
You do NOT give the address or more than one really good photo, probably of the interior.
When people call to get more info,
you tell them only a little- and that you will email or call them the night before the inspection with the address and driving directions.
The goal is to get LOTS of people to inspect the house Sat and Sun between the hours of your choice. I'm planning my inspection and sale for mid January, and planning to be open only between 12 and 5.
Those people see others there and interested, and it builds some excitement. They place bids before they leave, or call in bids before Sun 5 pm. At 8 pm, you start the round robin call to establish the best offer and go from there.
I'm carrying on a discussion with a few people via email now regarding questions buyers may have, so I as a seller, can have an idea and be prepared.
That's why I came on to BP this morning, to find a place to ask that question. I think I'll post in it off topic, though maybe it belongs in this forum.
Best wishes.
Maybe we can continue with this thread here for 5 day sale info...
Best wishes
i also suggest that you do it on Craigslist. You can do whatever strategies you can to get a higher equity than before but you have to make sure that what you are offering is worth the "price" that you wanna have. it's always a give and take