When you purchase real estate using our Unlimited Funding strategy, you’ll want to sell the investments quickly for various reasons. The biggest reason is that the money you’ll make from the investment is tied up until you sell the property – meaning you can’t spend it if you don’t have it.
You’ll want to sell the home fast, so your cash flow and profits are secure, as they simply won’t be if the house sits on the market.
Also, the day that you actually buy that property is the day that your profit potential is at its highest. This is another reason why you’ll want to have it sold quickly because as each day passes, the profit decreases accordingly.
Let me show you an example:
Let’s say you purchase a home and your numbers indicate that you’ll make $50,000 profit on the deal. Let’s also say the monthly holding costs are around $1,500. Now, let’s look at how your profit is affected over time:
- After 1 month, the profit is $48,500
- After 2 months, the profit is $47,000
- After 3 months, the profit is $45,500
- After 4 months, the profit is $44,000
- After 5 months, the profit is $42,500
- After 6 months, the profit is $41,000
As you may know, it does take some time to sell just about any home. If you underprice the home and it sells too quickly, you lose out on profit too. Learning how to price the home at the most profitable price is something you’ll definitely want to do. No worries though, because as you continue to get deals and sell them, you’ll become a master of the art of pricing homes.
I’m not sure what your goals are on how many deals you’re closed after each year, but let’s say your goal is five homes. When you look at the example we’ve used, you can see how pricing homes accurately are essential. If we use just the numbers above and say the lag time for each house was around 6 months, you’d lose out on $9,000 per home, which at five properties per year is $45,000. That’s 45K that you could have had in your pocket or used to purchase more properties.
Master the balance
Essentially, you’ll want to educate yourself when it comes to pricing homes to sell quickly, but not too quickly. Take the time to study on the topic and keep up to date on things like market conditions for your local area, comps, and so on. The more you put into mastering the art of pricing homes to sell quickly, the better your results will be.