Arm chair residential real estate investors are not a pretty picture these days. Many of these type of investors would love to have a makeover for their portfolios. Mainly the newbie group that cattle-called weekend millionaire workshops are the ones holding many properties, huge debt and bought in at or near market highs. On top of those problems, the number of buyers sniffing around over-priced markets has dwindled to a trickle. Plus, the few buyers around are the first wave of vultures looking for those desperate to sell. What's a teetering weekend millionaire investor to do? -Make sure your properties are listed with a large national brokerage. You need all the Internet and print exposure you can get, locally, regionally, and nationally. -Don't list with a company that demands you pay a commission, even if you don't sell. It's true, some companies listing agreements state you will pay a commission either way. Read the fine print before you sign. -Don't list your property with a broker for longer than 120 days. Give them a chance to market your property, but for only four months. If they can't do it in 120 days, chances are they can't do it in 180 days. -Demand that your broker does a virtual tour and a minimum of eight still photos on their Internet web site and on Realtor.com. This is not negotiable. The buyer of your property might be out-of-town, state or the country, think global. -Pricing is king in today's market. Throw your spread sheets away and your dreams of huge profits. Look only at sold comparable's from the last six months, that's exactly what the buyer's mortgage lender will use. Price at market, forget wiggle room, you need to sell, act like it. Seven months ago was a different market. Remember you're looking to save your credit rating. -If you have multiple properties, see which ones can be your loss leaders, price them to move fast. Better locations and the most popular models and floor plans should bring your highest returns. Don't treat all properties in your portfolio the same if they're not. -Figure out the absorption rate for your market. This rate will tell you how many months or years of for-sale inventory is in your market. Three months is fine, six months is okay, nine months is troublesome and twelve-plus, will not be pretty. -If you're in a coastal resort market, factor in hurricane season. If it's bad it will impact the market next winter. The good news is, demand will pick up strongly after 2 years of weak activity. The question is can you wait for the rebound? -Don't even think about signing a contract to purchase. It doesn't matter how good the deal is, you need to be selling not buying. -Call your mortgage lender when you know you won't be able to make a payment. They love the heads up. You'll have more problems with your condo association if you can't pay association assessments. |
