Property Investment – Help, My Property Won’t Sell

It is commonly said that you make money when you buy, not when you sell. However, often this lesson is not learned until you try to sell a property. I remember the first property I tried to sell. It was a two-bedroom unit in a small complex of eight. A lovely unit… only four years old in an upmarket growing suburb. I was moving to another state in Australia and wanted the property sold, to enable me to buy another home in Queensland.

The property took over 12 months to sell. Three contracts fell over due to finance issues for the purchaser. That was my first experience in selling a property. The emotional roller-coaster was challenging. Initial excitement when the offer was negotiated and accepted, followed by confidence when the contract was signed, followed by disappointment when finance was not approved for the purchaser. The final emotion was frustration when the contract fell over. This happened three times.

Prior to this experience I believed properties took on average three months to sell, depending on the current market conditions. A few years later, we decided to sell one of our properties. This time it took close to two years to sell.

The property was a 2000 square metre property in a beautiful coastal holiday town. The property had zoning that allowed for the development of eight two and three-bedroom townhouses. The property was ideally located on the main road, a couple of hundred metres from the shopping precinct and beach, had two street access and was very close to community amenities such as a child-care centre, school and bus stop.

One month after we purchased the property we were offered $70,000 more than what we had paid for it. We had no intentions of selling the property at the time. Later, on realisation that we did not have the experience, contacts or time to develop the property, we decided to sell it. The first two offers we received were from developers. The offered a 12-month settlement contract. They would pay an upfront amount, with the balance paid in 12 months. This contract suited them. They got to hold the property with little money down. Negotiations could not get the terms of the contract suitable to both parties, and both contracts stalled.

In hindsight we should have accepted the contracts. These were the first two offers we received. We expected more offers to come in that didn’t have a 12-month settlement term. The market turned, developers pulled out of the market, residential construction slowed down and our property took an additional 18 months to sell. Holding a property for an additional 12 months to two years is not good from a cash-flow perspective.

It is important to consider the type of investor you are, before you risk buying a property that is wrong for your investment strategy. Don’t assume you can just sell a property if you need to. When selling, the market is in control. The market determines when it wants to buy, what it wants to buy and for how much. This experience provided one of our biggest lessons in property investing… know what type of investor you are, and be that type of investor only.

You’ve Been Lied to About Real Estate Investing

Wholesaling real estate is by far the fastest path to real estate investing wealth. You’ve seen the investors on TV buying, fixing and selling property because it looks good. It looks fast, crazy, risky and exciting – all the reasons why it’s been on TV. What everyone fails to tell you is that it’s very risky, it’s time consuming and it’s not the most profitable residential real estate strategy you can do.

Don’t get me wrong, buying, fixing and flipping real estate is extremely profitable it’s just not for me and it’s most likely not for you. Here’s why you should not look into flipping a house.

Shocking? I know!

Everyone wants to flip a house because they see it on TV but what you don’t see on TV is what you need to be doing. You need to wholesale houses because you can get started today, right now with little to no risk, money and investing experience.

Wholesaling real estate doesn’t make for the best TV so this is why flipping houses has been all the buzz. We love the drama and we love watching to see if the house flippers will flip the house with a profit or will someone go wrong!

Everyone has enough drama in their life that we need to skip and focus on making the money. Focus on businesses that will yield the highest profit without being too risky.

And That Business Is Real Estate Wholesaling

As a wholesaler you’re in the business of connecting someone who is selling a house with someone who is buying a house and you get paid a ridiculous fee for doing so.

Now you’re not a Realtor and you’re not listing houses for sale. That’s not the cash producing strategy of wholesaling real estate.

You want to find distressed properties who are owned by someone who needs to sell the property immediately. The property is a burden and the worse it looks the better the deal you can negotiate.

Evaluate the property and agree to buy the house with the seller. Find a house flipper – someone who we love to watch on TV buy, fix and sell real estate.

Tell them you have a great deal for them. You have a distressed property with a motivated seller and they’re make tens of thousands on the deal when they can flip it, you just want you’re wholesale fee.

The house flipper will gladly pay you a wholesale fee if they’re going to make tens of thousands and the person selling the house gets their house sold. Everyone wins!

You introduce the house flipper as an associate of yours the seller when they actually buy and close on the property.

Everyone Wins

The house is sold – the seller wins!

The flipper gets a solid deal – the house flipper wins!

You brought the two together and made a nice profit – you win!

Wholesaling real estate is easy to do. It’s all about finding deal after deal. Wholesaling house day in and day out. There’s no risk and you can wholesale an extreme amount of houses whereas a house flipper can only flip so many houses and they’re taking on all of the risk.

Rethink your strategy and save the drama for someone else. You know better – become a real estate wholesaler today!

Make Investing Right for You With Your Rules

Everyone says to start investing when you are young. Just about everyone would agree with that. If you start working towards retirement at 20, you are in better shape than the person that starts at 55. When you start at either age, how do you begin?

At either age, you have to take it one step at a time. Initially, you need to think through what your goals are for retirement. They don’t have to have 100% of the details. You do want to have an idea of what age you want to retire at, and how much money you want to have at retirement. For example, if I am comfortable living with $6k a month after taxes, then this is what I want at retirement. It can be less. It can be more. If the $6k a month pays a mortgage that may be paid at retirement, $4k a month might be okay. Each retirement amount will depend on the person and their needs. My age for retirement may be 65.

I have determined my goals, what’s next? Now, you need to find yourself some good, honest financial help. Many people use the internet to search for a financial advisor from the major financial companies. There is nothing wrong with this. You can set up a meeting with an advisor. If it is a fit, go forward. If it is not, go to your next person. If there are any yellow or red flags at any meeting, you do not want that advisor. If the internet route is not working well, ask your friends and family for recommendations. I would insure that these recommendations are doing good work for the folks that are saying they are good. Not everyone pays attention to their portfolios as they should.

We have our goals and we have picked an advisor, what do we do now? After our advisor gets our goals, he will sit down with us and get additional facts to determine the best way to reach our plan. Information required is normally income, expenses, major purchases upcoming, current life insurance, risk profile for investments, and other areas that will determine best way to meet goal. After advisor has information, they will get with their team and work up solutions for you.

The next presentation will be solutions to you. This should be a step by step plan to meet your objectives. It should illustrate your goals and show what you are going to get at retirement after taxes. It normally includes some sort of life insurance policy to protect your assets, emergency fund build up, and budget recommendations. The explanation should include any fees that you may have to pay. Any funds to invest in should have a prospectus for you. In 2015, you are able to track all elements of your retirement plan either monthly or quarterly.

If you have questions or changes, get them answered along with any revisions that need to be made. Be 100% comfortable with the plan that you go forward with. Once everything is set, sign the paperwork and get started towards your retirement. Your monthly payout should be very comfortable for you as they are additional funds.