Focus on Buying First
People are always asking “why don’t you talk about selling properties?” The reason is you have to acquire properties before you can sell anything. Let’s not get ahead of ourselves. If you don’t own anything, how are you going to make a profit?
Once you become good at buying, that’s when selling strategies become important. Being a profitable seller is also a collection of strategies and techniques and that’s the topic today. Your plans for a property are the most important because the numbers calculate differently depending on your goal.
When you buy a property, you have to think about what the highest and best use is going to be. If you don’t know that, how are you going to know how much to pay for it? You’re not in business to lose money, you’re in the business to make money. The repair costs matter, the appraisal matters, holding costs matter, they all impact your calculations and ultimately your profit margin.
Your selling strategy is very important. Are you going to sell for cash? Financing terms? Are you going to hold the property and rent it instead? Each selling strategy has to be assessed differently because they change the numbers involved in the deal. You should also know your exit strategy before you’re going to buy.
When you know your selling strategy and make those calculations, you won’t be buying as many properties but the ones you do will actually make you money. Be realistic with your sale price and make sure your buyer doesn’t go out and buy a new car before closing the deal. If you’re going to sell your properties, you must get to know your buyers and make an offer that gets them as much of what they want as you can.
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