Over the years many investors have asked me why their property is not selling. They are all concepts rooted in the following two reasons;
- It’s not priced properly.
Said another way, it was not purchased properly. A very long time ago one of my mentors gave me some advice. He said “don’t buy property you know you can’t get out of overnight.” I really took that to heart and it always stuck with me. I put together the system I use where we price the property we buy using the cheapest comparable sales and then divide by half (sometimes more).
Here’s a real example. The least expensive 40 acre property that I can find posted on the internet in Texas right now is about $10K. We make offers daily on that type of property. So we offer less than half of that to come in around $3K. Then we sell the property for about $8K within a few days of purchasing it. We make sure we are priced less than the cheapest property on the internet to insure a quick sale.
It’s all about how you buy it, not so much about how you sell it.
- The right people aren’t being exposed to it.
If a seller has priced their property correctly and it’s not getting offers, it’s usually due to lack of exposure. It’s hard to image this in the internet age, but I see it every day. People are busy with their lives and completing an unnecessary real estate deal is sometimes the last thing on their mind. Most of the time sellers thank us over and over at the end of the deal for “solving their problem,” even when we purchase it well under market value.
As full time real estate investors, sometimes we forget that most people don’t know about a simple tool like Zillow.
The greatest real estate bargains I’ve participated in are simply because, I’m the only person who knows the property is for sale. Very often, the seller does not think about selling the land until we contact them.
Two simple rules to live by in REI: Buy super cheap based on half the price of comparable sales and post the property for sale on every corner of the internet.