I was watching an old episode of 24 last night (Season 4 for fellow aficionados) and was intrigued by the moves of Habib Marwan, the terrorist leader. In order to distract Jack Bauer and the Counter Terrorist Unit (CTU), he proposes to trade captured CTU agent, Jack Bauer, for the teenage son (Behrooz) of known terrorists, Dina and Navi Araz.
Marwan actually has no use for Bayroos, but CTU doesn’t know
that. The trade’s main purpose is to
distract and slow down CTU from figuring out the next stage of his nefarious
plan (stealing a stealth bomber and blowing up of Air Force One with President
Keeler). He wants them to waste their
time and resources going after the wrong lead trail with the Behrooz-Bauer
exchange. The purposeful misdirection
almost works…
I see this misdirection, though unintended, in home sales sometimes. As a home seller, you don’t want to distract
and slow down potential buyers for your rental home! Like Marwan, you must decide who your real
target is and focus. Marwan never
wavered on his priority on taking down Air Force One. He used misdirection to achieve his main
goal.
However, don’t use misdirection when selling your rental home! To avoid this, the decision must be made on
whether to target owner occupants or investors; going after both (especially
when the facts on your home won’t support a good selling proposition to one of
the parties) is a waste of time and resources.
CTU didn’t have time to track leads to find Marwan AND conduct the
exchange for Jack Bauer. This misaligned
strategy cost President Keeler his life and was a major intelligence failure.
How do you know whether you want to target an investor or an
owner occupant as a buyer for your rental home?
The correct strategy to utilize hinges on the answer.
Here are a few questions to ask to determine the appropriate
strategy to use:
1. What is the ratio of
the monthly rent versus the asking price?
In Charlotte
2. What type of discount
can be offered on the home? If it needs
to sell for full retail, the owner occupant buyer is the way to go. If there is room to discount the home off of
retail price, it may be a good candidate for an investor.
3. How much money can
you afford to put towards fixing the home up?
If it is a lot, then you have the option of fixing up the home nicely
and asking for full retail price. If the
funds are not available, investors are flexible on repairs if the deal on the
home is enticing in terms of cash flow ratio (#1) and discounted off of retail
price (#2).
4. Is there a tenant
currently in the home? If so, this is a
good candidate to sell to an investor and save the holding costs of
vacancy. It costs nothing to have a home
on the market while a tenant is in it, though there are some logistical issues
for showings.
So, the ideal selling conditions per buyer type…
Investor: good cash flow ratio, home discounted, limited
repairs done, tenant in property
Owner-occupant: poor cash flow ratio, full retail price, fix-up
completed, empty house
Once it is determined who the ideal buyer is for your rental
home, the marketing should flow from this decision. So…
Investors: offering your home at local investment clubs, ad
verbiage including “signed lease and expenses log provided” in the listing as
well as other pertinent investment factoids, posting on real estate investment
websites, informing property managers and Realtors who know investors looking
to acquire rentals that your home is available and a good deal
Owner-occupants: MLS and other marketing a typical Realtor
would provide
Having an aligned strategy to your target market will save
money and in Marwan’s case, take American lives! Fortunately for US citizens, Jack Bauer is
good at focusing on his target (Marwan) as well…
Brett Furniss is President
& Owner of BDF Realty (Charlotte Residential Property
Management), the trusted real estate advisor for Charlotte
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