Month: June 2008

Another way Kathy Kennebrook suggests to sell properties, especially properties that need repairs is by implementing a Work For Equity Plan. This is a good way for you to get a higher dollar amount for properties that need some work instead of simply wholesaling them. This is another way to drive potential buyers to your properties no matter what your current market is doing.

So what does Kathy Kennebrook mean by Work For Equity? Simply, it means that you have a property that needs some repairs that you want to sell. Instead of wholesaling it, you will sell it to an end user or homeowner who will do the repairs in exchange for some of the equity in the home. You can either sell your properties this way or lease/option your properties using this method. Kathy Kennebrook has done both successfully.

For example, say you have a home that all fixed up would be worth $150,000 and it needs around 20,000 in repairs, perhaps paint, carpet, appliances, or bathroom rehab. You should have purchased this home for around 82,000 or less if you structured your purchase correctly. You could then lease/option or sell this home on a Work For Equity program for around 115,000-120,000. This gives your buyer an opportunity to gain some sweat equity in the property by doing some of the work themselves and allows you a big paycheck at the end without having to do any of the repairs yourself. Kathy Kennebrook likes using this technique to sell properties since it gives a potential buyer the opportunity to purchase a home when they might not have been able to do so otherwise.

You have to be very specific about the terms when selling or lease/optioning a property this way as to what repairs are going to be done and in what time period. Kathy Kennebrook provides a list to the buyer of repairs that need to be done and she goes over it in detail with them. Kathy Kennebrook then has them sign an agreement stating that these repairs will be completed within a specific timeframe which might be 12-24 months, depending on what you and your buyer agree on. Kathy also keeps tabs as to what repairs have been completed. While the repairs are being done to the property, Kathy Kennebrook also has her mortgage broker working with her buyers in order to get them qualified for a mortgage once repairs are completed. She will allow the buyers to live in the property while repairs are being completed as long as the repairs are not something that is going to create a dangerous situation for the buyers.

This is a really good way to sell homes that need work and make more money on them than you would if you had just wholesaled the property. Selling homes on a Work for Equity program will bring you buyers that would otherwise not be able to purchase a home so it creates a win-win solution for all involved, and brings you buyers you would not have had before. In a sluggish market, this is a really good way for you to sell properties that need rehab and make really good profits on your deals.

For more information on buying and selling houses quickly in any market, visit Kathy Kennebrook’s website at marketingmagiclady.com.

The other way Kathy Kennebrook offers owner financing to a buyer is by holding a small second mortgage for them for part of her profit on the deal. This is personally one of her favorite ways to sell properties. Often having this opportunity available makes it easier for your buyer to obtain their first mortgage and gives you monthly cash flow for part of your profit. You actually end up making more on the deal this way since most of the buyer’s monthly payment to you on the second mortgage is interest.

Kathy Kennebrook will typically hold a second mortgage for her buyer’s with a three year balloon. At the end of the three year period, they still end up owing her most of the principle of the original loan. This can become a nice stream of income for you both on a monthly basis and long-term. You end up getting a big check when your property is sold, then smaller monthly payments for a period of time, then another big paycheck at the end of the buyer’s balloon.

The other method Kathy Kennebrook suggests using to sell properties is to owner finance the sale of your property for your buyer, and then sell the note to someone else at the closing table. If you structure your deal correctly, you usually end up being paid between 90-93% of the total amount in cash when the closing takes place. In this instance, if Kathy Kennebrook knows she is going to sell the note at the closing and take a lump sum cash payment, she makes sure she has sold the property for its full retail value or a little more. This way Kathy still gets a big paycheck and most of the value of her property’s sale.

These are just a couple of other methods you can use to sell houses that will drive buyers to you even in a sluggish market because you are offering your buyers assistance that most other sellers are not.

For more information on selling homes on a Work For Equity Plan, check out part three of this article. In the meantime, visit Kathy Kennebrook’s website at Marketingmagiclady.com for even more information on buying and selling homes quickly in any market.

Using a work for equity plan to sell houses or owner financing to sell properties is a good plan for getting homes sold quickly in any market especially if they need rehab. So let’s first talk about owner financing properties.

Kathy Kennebrook believes that owner financing is another good way for you to sell your properties. Many sellers do not offer owner financing so this is another good way for you to drive potential buyers to your properties even in a down market. Kathy Kennebrook suggests simply advertising that you are offering financing assistance for your buyer. Many times you will have a buyer who has a significant down payment; they just can’t qualify for a loan for whatever reason.

Usually if Kathy Kennebrook owner finances a property, she at least wants her buyer to have halfway decent credit or at least workable credit that can be cleaned up over a period of time. You can sell your properties using owner financing one of two ways. If you sell a property that has an underlying mortgage, you could do a wraparound mortgage with your buyer.

A wrap around mortgage is simply a mortgage that wraps around the underlying note. Kathy Kennebrook would absolutely suggest using an attorney to put these deals together for you so it is done correctly and in a way that allows you to foreclose out the note if your buyer stops paying.

So how does a wrap around mortgage work? What this means is that your buyer pays you a mortgage payment each month on your property and you pay your underlying mortgage. The difference between these two payments is yours to keep as monthly cash flow as long as taxes and insurance are handled. If you have used an attorney to do the wrap around mortgage for you, your buyer is going to be responsible for the taxes and insurance on the property and will provide you with proof that these have been paid.

For more information on owner financing properties and wrap around mortgages, read part two of this article next week. In the meantime, visit Kathy Kennebrook’s website at Marketingmagiclady.com for even more information on buying and selling properties quickly in any market.