What Is Your Experience With Small Towns?
I have the opportunity to buy a 5 home package at a good price. All need minimal rehab. I am concerned since they are all in small towns and I think houses tend to stay on the market longer.
What are your experiences?
Small towns are fickle.
I prefer to have no more than 65% invested in the home after all repairs and holding cost.
Homes are usually inexpensive in these towns and there is usually one reason the homes stay on the market for months at a time. No cash for down payments.
However, if you put the home on the market and sell it for 80% of its FMV you will move it fast. Most people can get financed for no money down or you can choose to carry a second on the remaining 20%.
There are usually a couple of serious investors in these small towns, so you may want to find out what these guys are looking for. You may be able to wholesale them to the existing investors.
I would suggest attending a few meetings for your local REI club. You can make some contacts as well as get advice on what works in your area.
Just curious, why would you want to sell to an investor? If your properties are in good condition and you are not desperate for the money - why would you sell to an investor. Investors are not going to pay you top retail dollar and why would you settle for less?
My experience is that you get top dollar by listing on the MLS. So list your property on the MLS, even with your tenants in place. True an investor - or more likely an investor wanna be - will buy it,. But they are more willing to buy on appreciation and not just income. There is a just a bigger pool of buyers on the MLS. Or, wait until their list is up, get them out, and sell on the MLS. You can try to find a realtor that will list for a discount rate.
It seems like nobody thinks of it.. But if you have nice houses, with nice apartments, and good tenants paying above market rent, why wouldnt the tenant want to own the house? Contact a mortgage broker who can runa few numbers and let one of the tenants in each place buy it, and become their own landlord. People dont want to move, and many tenants are surprised to find out they can actually afford to own the home they are renting.
Moolamatch,
What type of communication did you send to the people in foreclosure? Was it postcards or was there something that the website provided to contact the owners?
Jack Scanlan
Jack:
I sent
1. Postcards
2. Mailers
3. Letters.
Keep it brief.
Moolamatch,
Do you have a service that you recommend for the mailings or did you do it all by hand? Thanks for the advice.
Jack Scanlan