Selling in a declining market - Posted by Mark (SDCA)
Posted by Mark (SDCA) on May 08, 2006 at 08:45:32:
Well under market properties are starting to pop up. I am confident about my ability to buy them and fix them.
But I am troubled about the exit strategy. Properties don’t seem to be moving well so selling at/near retail could be a problem. Because of the acquisition financing I would not want to keep the property long term or offer owner financing.
Part of me wants to tie up the property and assign the contract but I hate leaving so many dollars on the table.
Re: Selling in a declining market - Posted by David Krulac
Posted by David Krulac on May 08, 2006 at 22:17:51:
Its not leaving money on the table, its making the deal work. There has to be profit for the buyer or you could get stuck with the property.
In 1981 the days on market were over a year, some proerties still sold, but only the ones priced right. your exit strategy has to be price them right and move the inventory off the shelves.
I know EXACTLY how you feel. My husband and I started doing a lot of wholesaling this year for different reasons. We got somewhat burned out after rehabbing for six years.
Anyway, we also hate to leave that money on the table, but it truly gives you more time to do more (and better) deals. We are on target to have a really great year without doing much rehabbing.
Joe Kaiser (thanks Joe) recently posted that you should look at it as 2 separate jobs: making deals and rehabbing. What he says really rings true to me.
Buy low and sell below market. Don’t get greedy leave a little on the table for your end buyer. Remember pigs get fed hogs get slaughtered. Make it up in volume.