It has been quite the busy month of February as you can tell from my lack of posting. I have been trying to negotiate and restructure a deal with a partner in the commercial building that we own (or rather bank owns). He is the tenant and wanted to construct the building since he was tired of paying rent to someone else. It makes sense on paper, but when the economy struggles then having lower fixed costs make the most sense.
Taking Over the Building
Since I had quite a bit invested in the building, I determined it would be better to suck it up and just take it over entirely than to let things languish like they had for the past several months. I would have ultimately born some of the responsibility anyway so it is better to get it under control now, get in the bankers’ good graces and figure out some more solutions down the road if necessary.
But it will hamper the debt payoff plan. You can read more about that at my newest blog, Shredding Debt. Despite that, I still plan on being aggressive and will see what I can accomplish over the next 3 years. I will know more once the building payments are caught up and I can see what my budget and cash flow will look like the rest of the year.
At least the money that is spent will create some real estate losses and lower my tax bill so the ultimate impact may not be as bad as it could be. Plus I will have 100% control of the asset so that when it is paid off, I will be in great shape. It is just the journey that might be tricky.
Looking Forward to Learning
I do look forward to learning more about the commercial real estate business and making new contacts. I think it will be a great experience that can only help me as I continue to become more involved in real estate. Ultimately, I would like to own more property. It will probably be after the consumer debt is paid off and some more of the kids move out of the house. But having something to do with my time after I retire from my full-time employment will be very good.
There are many reasons why you might need to sell a house quickly such as divorce, death of a loved one, or an international move. Maybe you inherited the property and need the funds to help settle the estate so that you can move on with your life and not be tied down to a piece of real estate. If I ever find myself in a situation where I need to sell my house fast, these are the tips I will use.
Price Your House Right
Everyone loves a deal, and there is no better way to sell a house quickly than to price it below market value. You won’t get top dollar for sure, but you will be able to unload the property quickly and have several potential buyers from which to choose.
Sell Your House at Auction
You might be able to get a higher price and sell it fast if you held an auction. At least you would know at the end of the day that it was sold. However, unless your house is in a more popular location where there is great demand, you might end up with a lower price than if you had used more conventional methods. But if the goal is to sell it quickly, an auction might be right for you.
Sell Your House to a Company
There are many companies that will offer to purchase your house from you. They will make an offer less than market price which is how they make their profit. Then they will sell the house or may even keep it and rent it out as an investment property. If you have to move as a result of your job, some employers will include this as part of their relocation package. Check to see if this is a perk that is offered with your company.
Should you choose that you want to try to get the most money out of your house and still sell it quickly, try these tips:
Clean Your House Up
Remember you will be competing against other sellers who have more time, so you really want to stand out from the competition which means the house should be exceptionally clean. No one wants to think about doing more work to get a house ready for habitation. Moving is work enough so most buyers will simply look elsewhere.
Make Necessary Repairs
Nothing says that a home inspection is only needed after a deal has been reached. Have an inspection before listing and make the repairs. That way, they will already be done prior to any offers so the house can close quickly. You can use this information in the negotiations and stay firm on price knowing that there will be no surprises or additional costs.
Stage the House
If you really want to stand out from the crowd, then have your house staged. There is no second chance for a first impression so having a professional who can lay out the furniture in the house and make it look great will go a long way to getting a top offer and getting the house sold fast.
And don’t forget that these tips apply to the outside as well. A fresh coat of paint and nice landscaping is important as well. Curb appeal is a big part of that first impression.
So keep these ideas in mind if you ever need to sell a house fast.
Readers: Any other tips for selling a house quickly?
Since I am having to liquidate my retirement portfolio to pay for some tax debt, I want to have something financial that I can focus on and consider a project. So I am spending the next 3 years really focused on maximizing monthly cash flow and paying off debt. If I can pay off just the debts that I have listed in my spreadsheet, I can cut about 30% out of my monthly budget and free up cash for other purposes. Besides, paying off debt is a great way to improve my net worth without having to pay taxes on the gains.
Refinancing the Rental Property
I met with a banker yesterday to look at doing a refinance on 4 of my rental houses. I have anywhere from 20-29% equity in the properties with 20 years 10 months to 22 years 11 months left on a 30 year fixed rate mortgage. The interest rates range from 6.375% to 7%.
Even though I am unable to get the best deal due to my credit score (I have a lot of debt relative to the credit lines), it does seem worth it and is consistent with my goal of decreasing expenses and improving cash flow in order to pay off as much debt as possible in the next 36 months. This includes rolling some closing costs into the mortgage. Of course, I will have to see the final deal but the initial numbers looked reasonable.
Assuming everything continues as expected, I would only be saving from $60-70 per month, but multiplied across several houses, the savings will add up and allow me to use the money for paying off higher interest rate debt. I will also be able to eliminate PMI on the one property on which I only put 10% down.
Decreasing the Term
The best part of the deal, though, is that I will not only save a bit of money each month, but I will be saving anywhere from 10 months to 2 years and 11 months on the mortgages since they will all be 20 year loans with a fixed interest rate. This will add up to some additional savings on the back end.
When I add it all up, it looks like I will end up saving $132,000 over the next 20 years which works out to be a decent return on about $10,000 in total closing costs. I will report actual numbers after the closing.
This is just one of the steps that will help me pay off a lot of debt over the next 36 months and free up some cash flow that can be put to better use besides lining the pockets of the bankers.
Here are the carnivals that had articles from my blogs in them this past week: