We “listed” three houses for sale last week: The Retail House, The Divorce House and The Power House. When I say “listed,” we actually just mailed a flyer to a bunch of agents we know who represent large-scale cash investors and hedge funds who buy in Atlanta. Over the next couple days, we received a couple dozen offers across all three properties. Not a single offer came from a buyer who actually saw any of the properties… 🙂
Ultimately, we accepted all-cash offers The Retail House and The Divorce House from the same buyer, who agreed to just a single day of due diligence and closing in 7 days. He completed his due diligence yesterday, and we’re moving forward to closing on those two properties.
The reason we had considered selling The Power House is that we haven’t rented it yet (haven’t tried too hard) and wanted to see if we could get a buyer at a price that would make it worth our while to sell it instead of hold it as a long-term rental. We didn’t receive any offers that intrigued us enough to sell it (yet), so for now we’re going to continue to hold it. We may list it on the MLS just to see if we can get any additional interest. Though I’m happy to hold it if we don’t.
We close on The Retail House and The Divorce House at the end of this week, and we’re also scheduled to close on The Rent-Back House at the end of the week as well…I’ll post final analysis numbers when the houses are sold…
Hi J. Glad to hear about the pending deals. Besides cleaning them out, what did you do to the houses? Are they ready-to-go for as rental holds? Or are they mini-rehabs for the buy and hold investors?
Hey Kristine,
The Retail House went through a mini-rehab — some siding repair, exterior/interior paint, replace carpet in bedrooms, replace vinyl flooring in kitchen and deep cleaning. It still needs the garage doors repaired/replaced, some appliances, and probably some ventilation (the previous owners were smokers), and it should be in rental shape.
The Divorce House I never even looked at. My wife did. Apparently, it just needs some new cabinet faces (or maybe new cabinets), a good cleaning and maybe a few minor repairs (the utilities weren’t on so the mechanicals/plumbing/electrical haven’t been tested).
All-in-all, they should each be less than $3K in rehab at this point and no more than a few days work.
Why do I get the feeling that you are not too thrilled about being a landlord 🙂
Cant’s say I blame you…
Luis,
You hit the nail on the head… 🙂
In Raleigh, NC we have been informed that the owner of Public Storage is buying up a bunch of properties. We have a rehab we are working on that would be a good deal for a hedge fund or large cash investor. How did you find out which agents are working with these buyers?
Hi Stephanie,
These agents originally found us when we listed other properties on the MLS a few months back. The agents called asking about the listed property, and when they mentioned that they had large investor clients, we offered to put them on our list of agents we would send deals directly to. They were thrilled to be on the list, as good deals are hard to come by these days.
I promise that if you put good deals on the MLS, the cash buyers will find you…just make sure you capture their info so you can market to them directly in the future.
I’m in the Raleigh area (hi Stephanie!) and have just started – I recently purchased a duplex for rental income and am now looking at a foreclosure to flip. I was going through the spreadsheets you provided for a rental analysis and just have one quick question: what is the variable cost PM and fixed cost PM? Specifically, what variable costs would be tied to income generated from a rental? Thanks!
Hi Scott,
Some property managers will charge a percentage of the gross rents in fees (10% is pretty standard). Other property managers will charge a fixed monthly fee for their services. The two lines are to differentiate based on how your particular PM charges.
Hi Scott in Raleigh 🙂
I also have rentals in Wake and Durham County it is typical for a PM to charge an upfront fee for finding and placing a tenant, usually 1 months rent up front and then 10% per month.
Stephanie,
Do you find it useful to use a PM to find tenants? I used to own a couple of rentals in NJ and never used a PM and never had problems finding tenants.
Do you flip at all in Wake/Durham? Any tips that are more useful in this area? Thanks!
Hi Scott,
In this area, Craigslist is a great resource for finding tenants. I have never had any issues finding anyone. I am an agent and can also list on MLS but never do because I can find someone on Craigstlist so easily. The main benefits of a PM would be if you need to evict someone and do not feel comfortable doing that.
I flip in Wake and Durham and there is nothing specific to this area that sticks out. I follow a lot of the same techniques that J Scott uses. This site is a terrific resource!!