The late, great Mitch Hedberg had a wonderful analogy for being a comedian in Hollywood. People were always asking him if he could act, could write a sitcom, could do things that were related to comedy, but not comedy. He said it was like “being a cook, and working really hard to be a great cook. And when you are done, they say ‘You are a great cook. Now, can you farm?’” If you are a residential rehabber, you might feel that way about getting your house on the market. You’re great at what you do, and have used your hard money loan from Socotra Capital to make excellent residential rehabs, but you’re not in sales.
However, there are ways to make sure that your house gets off the market quickly and at a good price that reflects the work you put into it. Using a realtor is never a bad idea, although it cuts down on your profit margin, but there are other steps you can take to make sure your residential rehab is presented in the best possible light.
Walk Through With The Eye of A Buyer
You obviously take great pride in your work, but we sometimes see things strictly from our own point of view. That’s pretty normal. You may love something, or recognize that your work has a certain sense of functional grace, but looking at it with different eyes might make you realize it is an aesthetic nightmare. Walk through it as if you were going to buy it for your family, or as someone who doesn’t know why your fixes were great. Enlist a friend if you need to. Getting a second set of eyes is necessary. Make sure you check smaller things that might have escaped your notice. Curb appeal rarely falls under the domain of rehab, but is vital to sales. Small issues matter. These include making sure:
Triple Check the Work of Your Contractors
If there is any work you had to outsource to subs, make sure it lives up to your standards. This is obviously good practice at any time, but walk through their work in the same way that the home inspector of your potential buyer is going to walk through. Nothing can make a sale go south faster than sloppy work by a contractor, and nothing is more frustrating.
Connect With Your Audience
There’s sometimes a disconnect between the mindsets of selling the house and buying it. When you are selling a residential rehab, you are selling something you worked hard at, and which is now an asset. The buyer is looking at a home, maybe somewhere to raise a family. It isn’t an asset; it’s their life. You might be very focused on dry technical details, which makes it harder to connect with your “audience”- because that’s what buyers are, an audience for your presentation. There are apps and programs to help you with technical sales through audience motivation, context, and story-telling. Once you find a way to connect, the sale will happen much easier.
Make Sure The Price Is Right
You know what you did, and the work you put in. But maybe you don’t understand the market as well as you should. What price can it bear? After all, if selling for $200,000 can earn you a profit, but the market prices are $250,000, you should go for the higher asking price. Conversely, putting it on too high will ensure that it sits gathering dust on the “listed” page for months. Of course, you want to understand the market before you start, so you know how much capital to put in, but things change during the course of work. Use tools like Zillow to compare similar houses in the neighborhood.
Flipping a house is equal parts art and business. You’ve created a new house out of an old one, and a brand new space for a lucky buyer. But you also have to make sure that the hard work you do with the help of Socotra Capital, California’s premier hard-money lender, doesn’t go for naught. Learning how to sell, or at least how not to get in the way of sales, is nearly as important as learning to wire. You may not have to learn how to farm, but you should at least learn where plants come from.