My brother and I have decided to sell 9 of the properties in our portfolio. The purpose is to raise additional working capital to do more local refurb and flip deals. We are making between £30,000 and £60,000 a deal but we can only do one or two a year within our current resources. Therefore, selling some of our lower yielding properties furthest from home seems to make sense.
We have owned all nine properties that we are selling for quite a few years and they all have a good amount of equity in them. They are all nicely decirated and should sell easily to first time buyers. We are in no rush so we certainly don’t plan to sell them as a portfolio or to other investors as they will want a big discount and we want full market value. Our plan was to try to do a deal with one National Estate Agent in order to negotiate the fees right down but having read Trevor’s post last night that’s made us re-think that strategy. Thanks Trevor if you are reading this, some very useful tips there mate!
We don’t want to serve notice on the tenants until the properties are under offer and well on there way to exchange as we need the rental income to pay the mortgages.
Our worries are:-
- We have to tell the tenants what we are doing
- We need the tenants to co-operate on viewings
- What if the tenants are awkward about moving out when we need them to?
- How can we get around serving two months notice on the tenants?
Our plan, at the moment, is to go and visit every tenant and explain the situation. We think it’s better that way as emails or phone calls can be misinterpreted. Face to face allows us to see their reactions to what we are telling them. We are hoping they will see reason and that we can also incentivise them by offering to refund three times their deposit if they help us to sell the property and move out on the agreed date. If the property is sold to another investor who is happy for them to stay we will still refund three times their deposit. Obviously we will assure them that we will give them as much notice as possible but we will explain that it may only be a few weeks.
We are interested whether any readers of Property118 have been in a similar position, what their strategies were and whether they were successful. We are also keen to know whether there are any potential holes in our plan.
Looking forward to reading the responses.
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