REI Marketing Tips

We’re all experiencing it right now:

It’s easy to find good deals and buy properties, but what about selling them? Lots of deals to be found, but you need an exit strategy, correct?

In my business, we sell most of our deals retail. We don’t wholesale that many properties. It’s just our strategy, and there’s nothing right or wrong about it. I can also tell you that the selling of properties isn’t the strongest part of my business. Hey, I’m just being honest here; we’ve always been great at finding properties to buy at a discount, but when it comes to selling them quickly, well, let’s just say it’s a part of my business that I’m working on.

My wife Dreama, as many of you know, is a Keller Williams agent. She has her license there for us to take advantage of the MLS, but is not an active realtor, in the traditional sense. However, when we want to sell properties for full retail value, we leverage her position there, and obviously take a discounted listing.

Well this property wasn’t selling. We weren’t sure what to do, but then, as I have referenced many times in the past couple of months, I implemented a strategy I learned at the Virtual Investing Seminar in New Orleans:

At the seminar, we had a roundtable discussion one day on how to move properties in a slow market. EVERYONE said that you need to sell via auction. This book was recommended:

I immediately went out and purchased it. However, due to our travel schedule and Thanksgiving, we weren’t able to run our auction until this past weekend. If you can believe our luck, it SNOWED on Saturday and Sunday. It rarely snows here in the Pacific Northwest, and when it does, the rain usually comes and washes it away.

Well this past storm, this past weekend, we got a good 3-4 inches of accumulation. Most people here aren’t fond of driving in the snow, and we felt like it might be a disaster. However, we went ahead with the auction nonetheless. While many folks did not make it out, many “real” buyers did. And, just as the book says, we sold the property in 5 days!

I’ll share the numbers with you, so you can see that we did leave some money on the table:

Purchased for $171k
Holding and closing costs, plus cosmetic repairs and staging: $10k
Total cost: $181k

Marketing costs for 5 day auction: $1k
Price SOLD on Sunday night: $213,500

PROFIT: $31k

Now, let me tell you about the downside. I truly feel that the property was worth what we had it listed for; $239k. Take out the buyers commission that we would have had to pay, and we potentially left $15k on the table. I can already hear some of you talking now about how this wasn’t a success, because I left money on the table.

My retort would be that the property is SOLD, and I am moving onto the next deal. We all know that in the current market, holding costs can eat you up. According to my calculations, we sold for 89% of fair market value, with NO commission paid.

Look, I know that this deal isn’t what the GURUs teach you: they would have told me that I should have paid 65% of ARV less the cost of repairs. They would have told me to flip it quickly, and that I never should have closed on it (I used private funds).

But the bottom line is that we made a profit of over $31k in a slower market. Our average profit per deal in our investing business is $43,243.59. We have a TARGET per deal profit of $30k, and we don’t do a deal unless we can make a SLAM DUNK $25k.

I’m sharing all of these numbers with you so that you know I’m not here to play games or make up numbers. 5 day auctions work, and if you’re investing and need to move a property, I whole heartedly endorse this book:

As further proof to my ringing endorsement of this book, my friend Coling Egbert, CEO of RealEstateInvestor.com, is going to interview me about my 5 day auction this Friday. As soon as I get the audio, I’ll post here it here for everyone to listen to.

If you have any questions about the 5 Day auction, feel free to send me an email. Better yet, listen to my audio. I’ll also include some free giveaways that I used in my auction that made it a success.

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