In the world of real estate, you really have to do your homework and math prior to any offers or bidding. But sometimes even after you do everything you suppose to do, but there are situations you can never anticipate and you might find your self in a situation where your deal has gone south. So what you do if you need to get rid of a difficult property.
Sometimes you might lock in a marginal deal and have a difficult finding a buyer to pay a higher price… Even though you are looking to make a quick flip, there are other ways to sell and make a profit. One way is seller financing… This may give you the room you need to make a profit. Basically you become the bank. You take a Promissory Note from a buyer, for part [as a down-payment. Just make sure the down-payment is the amount you used to purchase the property] or the entire purchase price. This note will be secured against the property and will contain interest payments, basically the same method banks use.
If it is a very hard sell, then maybe even tell the buyer, you will accept a note for the entire amount, with no payments due until 1-3 months?.
Another scenario could be you purchase a property, where your construction budget is not enough… So you are not able to Fix & Flip and stock with a property needing repairs. A good way to resolve this would be with a partnership. Find a local contractor or one you already use… and establish a partnership. Basically you will be fixing and flipping, but with a partner instead of your self. Offer the property as your share of the partnership while your partner offers the materials and repair costs. When you sell the property, you split the profits accordingly.
Sell at a cost
Sometimes you just have a bad deal. A property you cannot sell for a reasonable profit. This can happen due to paying too much, bad market, unforeseen repairs, or just bad luck… It happens! In this instance, sometimes is better to just sell the property at a cost, and cut your loses. Sometimes you have to move on and stop financial bleeding. Remember if you are fix & flipping your interest is to move the properties fast. So cutting your lost, so you can get back on track in making a profit on a different deal.
Things to remember
– If you are fixing and flipping, you want to get rid of the property fast.
– Establish a list of investor buyers and retailer buyers.
– Use a Realtor to get your properties in the MLS and also assist with the sale of the property. Remember you want to sell fast.
– Always cut your loses.