All Forum Posts by: Mike B.

Hard money is expensive and really only worth it for terms less than a year, ideally 6 months or less, when you don't have the cash available on hand for acquisition and rennovation, to pepare for refinance or retail sale. If you're going to do hard money on a rental it should be just for temporary purpose to bridge the gap. There's lots of options out there so shop around.

Thanks Brandon, I certainly understand where you're coming from, but I need to maximize my profits on this one and the property is a tenant occupied property, so it's not something that I need to do showings for and such. Even if I did, I could just do FSBO with a lockbox and pay the Buyer's Agent their portion of the commission and that agent would handle most everything in order to get their client the property and get their commission anyway. Or I'd use a property manager and pay them a small fee for showings/facilitating things.

But in my situation here, I just need an investor, who otherwise doesn't really care about the house in particular, to purchase it as a buy and hold rental property to add to their portfolio.  No need for showings, inspections, appraisals, etc..  The person who buys may be just like me and be out of state.  They may likely never step foot on the lot. It's just an address that produces cash flow.... 

Has anyone found a good platform for Selling Investment Rental Properties to Other Investors?

Basic Scenario:

I own a single family home in Pennsylvania and I live in California. The property has newly placed tenants starting a 1 yr lease with $700 monthly rent. The property just passed code enforcement inspection and needs no repairs. I decided that I want to sell the property off. The local Realtor's CMA gives the property a $68,000 value and I would like to Net $58,000. The property is a 2 bed, 1 bath, 1232 sq. ft. home with basement and detached garage. New roof and furnace a few yrs ago.

I would think it should be relatively easy to sell as a Turn-Key/Tenant-Occupied Rental Investment Property...... just need the best platform to advertise it.... 

Other than craigslist and connected investors, has anyone used any other effective ways to sell (or buy for that matter) their rental properties?  I'd rather not use a real estate agent and lose profits on commission if I don't have to.  I'm aware that BP has a buying/selling marketplace as well, but just looking for all available and useful options.

Thanks all.

The concept you heard about at REI club is essentially a lease option, which seems to be unacceptable in Texas past 6 months. You could look more into a Lease Purchase or Land Contract instead where you are doing a seller carry scenario of sorts, then you could re-rent the property and ultimately re-sell the property. It will require a bit more research for you there.

If you're not doing any buying/selling as part of the deal, then you're looking more at a Master Lease (subleasing) scenario and on a single family home, you're likely to not have much margins.  The numbers have to make sense to everyone.  People may not be as savvy about real estate as you, but they will watch their money and want it to make sense... 

Really depends on how you structure the deal.  Maybe you find a distressed homeowner in need of a solution, or that property that is paid off, vacant, inherited, and someone just doesn't want to deal with it, and you're able to get them on board and accept your offer.  And then you'll have to do the same with your end renter/buyer.  

Tons of ways to do the  lease option .  But very generally if you use the strategy to  acquire  and then invest in properties it allows you to  gain control  of a property  and make  Profits  few different ways  on the same property.  You would essentially  lease the property  from the owner  with an option to purchase it at a pre-fixed price .  Then you can either assign those agreements to  another  end buyer  and make a profit  similar to or more than  your wholesale contract assignments  or you can  stay in the deal as a sandwich lease option  and basically become a landlord  where are you  rent  the property out to another interested  party  who wants to buy the house  as a rent-to-own.  in doing so  you can collect  an option consideration payment up front  which  locks in the rental and purchase price  for your rent to own buyer  and secures them  that exclusive option  but not obligation to purchase the property during a fixed  period of time.  Then over  the option  term  they would pay monthly rent  and ultimately purchase the property .  Your sales price  to your rent to own buyer would be higher than the purchase price you offered  the seller .  So ultimately you make  the difference in the spread between  your  option purchase price from the seller  and your monthly rent  to the seller and the monthly rent you receive from your buyer  then lastly  the difference between the purchase price you offer the seller and the sales price you get from your end buyer.

Search for lease options and Brian Gibbons to get a better understanding.

Drive for dollars. You can get a few hundred business cards printed up for $20 or less, with your contact info and even some brief bullet points of what you do, then leave a few at bus stops, laundry mats, barber shops, hand them out when networking, leave them at the door or mailbox of the houses you've noted when driving for dollars, etc... same with postcards. You can write/type ayour own letterr and include a photo of the house with your message and send that to the property. Respond to FSBO owner ads on various websites. Make your own bandit signs from posterboard at the dollar store. Ask a realtor for expired MLS listings. Then send them a letter/business card. You can buy a car magnet that serves as a mobile bandit sign. Ask the county for a list of condemned properties. Network and tell people what you do asking them for referrals. Ask a title company for a list of properties that received a notice of default.

Get creative. You just have to find ways to locate properties and get your message to them. Hopefully its the right time, or over time, they will have a Need to sell and will except a discounted price or terms. 

In bigger cities the markets will be harder and you have a ton of competition, many that have the budget to continually get their message out in large volumes.  It seems the average response rate for direct marketing is only like 2-4% and that does not guarantee that the deal will close. 

If you can work up to it, the internet is a good way to go these days, with a website, squeeze page, drip emails, youtube videos, etc... 

Hi Brian, I have a rental property in your area you may be interested in.  Send me a message and we can chat more. 

if by Wholesale lease option you mean that you acquire a property under a lease option and then assign your contract to another investor then you should be released of all liability for your assignment contract. The new investor who buys the contract from you is buying whatever agreement you had in place with the seller and the tenant buyers. The new investor is simply stepping into your shoes and therefore they assume your role, liabilities, and benefits.

If you are staying in the deal throughout the option term, then you are referring to a sandwich lease option, and in that case yes you have something to worry about for both of those issues.

It really just depends on your strategy and how you have your contracts written up.

Hi Cade, to find the motivated sellers, you have to market to them. This could be newspaper ads, bandit signs, direct mail, networking, websites, e-mail blasts, social media posts, etc., etc.... There are a myriad of ways to get your message out. To find potential motivated sellers to market to, there are also tons of methods, that include FSBO ads and Rental ads by owner on craigslist, newspaper, zillow, and other websites. You can buy lists of property owners with high equity, little equity, absentee ownership, probate and trust sales, etc. as well. You can drive for dollars around neighborhoods and look for distressed and vacant properties. You can look for expired MLS listings and network with real estate agents for them to bring property deals to you when they're not selling well. Lease options will be a great choice for properties with motivated sellers that don't want to sell for 50-60 cents on the dollar and/or that have little equity and/or are already planning to rent the property.

Some marketing topics for lease option sellers to try-- sell the house and get 3 paydays ( just lower than the investors of course), sell the house with little to no equity, stop being a landlord, sell your house with no commissions, have your monthly house payments covered for you and cash it out on a sell, hassle-free way to rent your home, etc...

Also I think you'll find that there are currently more investor pros cautioning against classic subject-to deals these days, and instead creating the transaction another way.  I'm sure if you do some research here on BP about subject-to and read forums after Jan. 1 204 or 2015, you'll find more updated advice on that strategy. 

You've received a variety of sound advice here John.  Looks like most investors agree.... Not your responsibility to "have to" upgrade it since tenants moved in and accepted the property"as-is" along with accepting the clause to maintain the landscaping.  The tenants, with your prior written approval, may upgrade/improve the property at their own expense, and all improvements and value therein become and remain part of the property (If this is noted in your lease agreement).  If you want to update the place you could do it at your own expense (considering the good advice from other investors above) and give notice to the tenants of a future rent increase in accordance with your lease agreement and applicable law where the property is located; pay now and charge higher rents on your next lease; allow tenants to pay and deduct the expense from the rent as a reduction in rent payments for the next 4 months or whatever you decide, etc... etc... several ways to structure it. 

Good luck.