504: Marketing Strategies to Sell your Investment Property
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Episode Transcript
Welcome to Episode Four of Season Five of the Growing Empire Show.
Today we're going to talk about marketing tricks that you need to know to be successful at selling your investment property, so stay tuned.
Welcome to Growing Empires - hosted by real estate entrepreneur and trusted investment advisor, Jennifer de Jesus. Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.
00:31
Many people underestimate the power of a great marketing strategy when it comes to the sale of their investment properties. Just throwing an ad up online or putting up a for sale by owner sign out front does not cut it. And you're going to want to make sure that you are really preparing your property for sale using the most qualified and experienced broker or agent in your local area. As I have said before, in previous episodes, selling an investment property is not for the faint of heart, and all things are not created equal when it comes to finding an experienced broker or agent that knows exactly what the marketing tricks are, that are used to be successful at selling multi unit investment properties. It is definitely not the same as selling your personal home, we're not gonna focus on things like staging. And you know, things like that, we're gonna be focused on the numbers. And we're going to be focused on how to get the most amount of people into the property at the quickest amount of time, we want to create buzz in advance, we want to make sure that the property is being projected to the right audience, and people that can actually afford the property. Keep in mind that when you are on the open market, you're going to compete with other listings in the same market, you want to make sure that your stands out. And that's really what the marketing tricks are that you need to know to really be successful in today's world regarding investment properties.
1:56
So let's talk about some of the details. The first thing you're going to want to do is make sure that you have professional photos and videos and drone footage done for the property. And if your agent is not intending to have a professional photographer come out, you need to fire them and hire somebody new — it is so important that the photos are professional. And here's why: most investors are not local. And they are looking at this stuff on the web. And when you take a professional photo, and then you put it on the web, the photo is downsized. So if you're just taking it on your smartphone, or you know a camera that somebody would have for their home, it's not going to have the same quality, you need wide angle lenses, you need different types of lighting sources, you need to really have a professional. There's no agent out here unless they have some kind of marketing degree and photography skills is going to be able to capture the best view point of your property without having truly expensive and professional equipment. So make sure that you're hiring a professional photographer videographer. We even go to the extent of using drone footage. And we create 360 tours and virtual tours and different types of things depending on the property, of course, and you want to make sure that what you're choosing to do makes sense for the property — right, you're not going to want to go to all this extent, if what we're selling is $100,000 investment property. But if we're selling a million dollar investment property, the potential buyer is going to expect a little bit more. So make sure that you're appealing to the buyer, the type of person that is out there and what they're going to want to see. But again, just keep in mind that when you're putting things on the web, the sizes are being changed. So it changes the perception of the photo, and what people actually see on the other side.
3:44
You will want to work with your broker to work on a short description that highlights the benefits of your property. And this is a really important piece of it. Obviously, the financials will speak for themselves, but what would you like the potential buyer to know about the area, the tenants, the property in itself, your maintenance of the property. So work with your broker to prepare, almost like a short descriptive writing or ad copy that will be used in all of the media. You'll want to talk to your broker about where they're going to list the property. Are they going to use social media? Are they going to use paid ads and what sites are they going to be using? If your broker is not willing to do all of this stuff again, you probably have the wrong broker. It is really important that you cast the widest net when listing your property. You need to think about where is the potential investor looking. Some of the hot investment portals are Loopnet, Crexi, 10X — those are really important sites to be on. Of course your local MLS will make sure that any local agents that potentially have buyers for your property have access to it so you never want to discount the use of the local MLS. But you want to make sure that you are listed on commercial sites and the channel with this is that they're very expensive sources. So, unless the brokerage that you're using to sell your investment property has a ton of experience in this marketplace and does this almost every day, they likely are not going to be on the sites where people are really looking to find investment properties. Again, we're looking for things like Loopnet Crexi, 10X and different sites like that. You certainly can use Zillow and other consumer based sites. And again, we want to focus on casting the widest net. So social media plays a really big part of this. But what you put out on social media matters, because if your tenants are also on social media, and they don't have nice things to say about you, that could be detrimental.
5:44
Make sure you know whre your property is going to be listed — whether or not your broker is going to do paid ads, social media ads, where specifically your property is going to be located, what sites are going to be used, never discount the use of the multiple listing service and other consumer based sites, but you're going to want to make sure that your property is truly listed on the sites that attract the most potential investors.
6:06
So let's talk about some of the other marketing tricks that you need to know. You should consider whether or not you want to do a sneak peek or a coming soon. This is a common strategy that is used to get people hyped up or excited about potential property coming on the market. And when you are in an active market where things go on and off the market very quickly, you want to make sure that in an effort to cast the widest net and to create a buzzer on your property that you consider certain options like ‘sneak peeks’ or ‘coming soon.’ So both MLS is as well as Zillow offer what they call ‘coming soon’ listings which allow you to pre-advertise prior to actual access to the property. Now, it's important that you're going to have these details in a listing contract with your broker to make sure that everything is very clear. And you're going to have to identify when the property is going to be listed on the ‘coming soon’ or ‘sneak peak’, when it's going to be listed in the multiple list, and when you're going to allow access. And it's really important that whatever you do, you do not step outside of those dates that you actually have identified in your listing contract. A ‘sneak peek’ is also an opportunity for people to view or showcase your property. Sometimes there's some photos available. Maybe not always, a lot of times they are things that are done like a week or two prior to the listing going live. And the sneak peak or the coming soon are relatively the same thing. It just depends on where they're actually located. We do ‘sneak peeks’ through what we call a ‘hot property segment’ that we put out every week. So any investment properties that we are going to potentially list the following week we will put out the week before as a ‘sneak peak’ and a ‘coming soon’ to market piece. And that really starts to create the buzz around the property and allows people to get really excited and when people think that there's going to be a lot of buzz or when people think that there's a lot of activity on the property, they generally will make offers quicker. And the offers tend to be much higher in price because they don't want to get beat out — so — versus if your property is sitting on the market for a period of time, you'll experience likely some offers under asking or lowball offers because people are testing the market when you change your marketing to make it seem as if the property is in high demand because you do things like a ‘sneak peek’ and a ‘coming soon,’ the likelihood of you weeding out those people that would tend to put out those lowball offers is very, very high. So ‘sneak peeks’ are something that I highly recommend for investment properties, especially in hot markets.
08:39
The episode will continue in just a moment. To make the most out of your investment property sale, you will need a team that understands the market fluctuations and how to capitalize on that demand. Knowing the market trends and forecasting economic changes is critical to your success. Having an expert by your side to help you buy low and sell high is the only way to create true wealth. When you need help analyzing your portfolio to maximize your return on investment, there's only one person you need to call — and that's me. I will help you analyze your portfolio and increase your profitability year over year. And that's my guarantee. Schedule a call with me today at GrowingEmpires.com. That's g-r-o-w-i-n-g-e-m-p-i-r-e-s.com and I'll help you create the life that you desire with passive real estate investing.
09:26
Multiple Listing categories — this is something that I can't believe the amount of times that I actually witness people doing things that don't make sense. Okay, for example, the Multiple Listing breaks down properties in categories and every Multiple Listing does this although the categories could be a little different from MLS to MLS, they're relatively the same in terms of what should be listed there. And there is no rule to how many times you can list it and most MLSs — at least not in the ones that we are using and we use like four or five local MLS.
9:59
So, Multiple Listing categories — there's residential, there's multi unit, there's commercial, and sometimes there's additional sites, but those are usually the top ones. So let's say I'm listing a two unit, three unit. Well, I know it's an investment property, I know it's a multifamily, so I'm likely going to list it under the investment category. But think about other potential buyers, a two or three unit, even up to a four unit can be purchased by an owner occupant, and they likely look in the residential category. So if I have a one to four unit that I'm marketing, I'm usually marketing it as an owner occupant purchase, as well as an investment purchase. Because I, again, I want to cast the widest net. So I can use multiple listing categories in the multi list to again, attract the most amount of buyers. If my investment property is, say, five units or bigger, it's also a commercial property. So I may want to consider using the multi unit category as well as the commercial category because you never know where the buyer is looking. But it's really important that you are putting your property out there in as many resources as you possibly can. So let's talk about the words ‘as is.’ This is probably one of the most common misconceptions of when to use this and when not to use this. ‘As is’, means that the way the buyer sees the property is the way that the buyer is going to buy the property. But for a buyer, those words mean something totally different than they may mean to you as a seller. So I would caution you to be very careful how you use these words or when you use these words, but it's very common to see the ‘as is’ statement in most marketing. What ‘as is’ means to a buyer is that your property has problems, and that they're going to need to buy this property with your problems. Not a good first step, not a good way to set the stage for what your property is.
Now, if your property has significant deferred maintenance, if it really if you're in a financial crisis, and you cannot afford to do any repairs, or you're underwater in your mortgage, then maybe the ‘as is’ makes sense. But if you're not in a financial position where this property is a burden to you, you're going to really want to caution yourself and using the terms ‘as is.’ Because here's what I will tell — you even if you use the words, you don't take away the buyers ability or rights under the terms of the contract. So for example, I can write in the contract all day that the buyer is buying this as is. But if we did not cross out the actual contingency period, if they have the right to inspect the property, they also have the right to walk away. So whether I say ‘as is’ or not, although I may be setting the stage to tell them what my expectations are as the seller, you're sending a very negative message to the buyer before you really even get into the opportunity to negotiate.
13:00
Common in commercial sales are things like ‘prices not disclosed’, a ‘call for offers’ — different things like that — where instead of pricing the property, you are asking people to make their best offer. It's a unique trick. And it's something that you've got to consider whether or not it's right for you. If you don't disclose the price that you're going for, you may not ever get the price offered to you that you're looking for. But one of the ways to do a price not disclosed is to put a longer bidding process out there and potentially say, you know, I'm going to market this property for 60 days. And, you know, on the 65th day, we're going to do a call for offers, and the price is not disclosed, make your best offer. That's one way to go about things. The challenge with putting a price on a property is the sense that you've kind of created the ceiling, right, so the only way you can go from there really is down in theory. However, if you price your property correctly, and this is also part of a marketing trick is to know what your property's strengths are, know what people are going after. And price your property really competitively so that you can get multiple bids at the same time. We're going to talk a little bit more about pricing your property in the next upcoming episode. And we'll go into a little bit more detail but the short answer is make sure that you're pricing your property so that it's super competitive in the market so that you can create the most amount of buzz and activity on the property and encourage people to place multiple offers. When you have multiple offers you are in a position where you can get over asking price if you've priced the property and you're also in a position where you can get the best terms of a deal because you have buyers competing against buyers. So do you want to do a price not disclosed? Do you want to price your property? Do you want to do a ‘call for offers’? Do you want to set that tone ahead of time? All of these are different tricks that people use for marketing to create buzz and to create excitement about a property, but keep in mind that everything that you do can also have a negative impact. Let's say that we do a, you know, a two week marketing time. And then we do a ‘call for offers’ on the third week, well, what happens if you don't get any offers? And now you've got to go back and do it again. Now, the messages that you've sent to the buyer is, nobody wanted my property, and that will impact your price. So you've got to really think long and hard about this — if you're not really sure what the price should be on something you might want to go for that ‘price not disclosed’ and see what kind of offers you're getting to test the market. You might want to consider a ‘call for offers’ if you're certain that the property is going to have a lot of buzz and a lot of activity and you're going to get multiple offers on the property. Because you've priced it super competitively, then you're going to want to have a ‘call for offers’ date to give everybody the opportunity to get in there and give you their highest and best price. But if you're not so certain that that's going to happen, then I would suggest you leave out the ‘call for offers’, put the property on the market and see what happens. And when you start to get offers in, then you can do a ‘call for offers’. But I would first wait to make sure that you're going to have potential buyers, before you make that call.
16:08
Another thing that we do, which is really helpful to us in creating buzz is we deal with a broker to broker ‘sneak peek’ as well, where we tell other brokers that we currently network with and that are usually involved in the other side of the transaction with us, we kind of give them a heads up on listings that are going to be coming on the market before it hits the open market. The brokers that are being exposed to the properties prior to them hitting the market are also going to work a little bit harder. So the unique thing about that and why that's so beneficial and a great marketing trick for you, as a seller, is because I'm now almost like employing multiple brokers to go to work for me to sell your property without you having to pay for it. So it's a real win-win for the seller. And it really gives us the ability to create quite the buzz for the property and capitalize on getting top dollar.
16:57
Make sure that the marketing of your property is inclusive of all the property strengths; we want to showcase the strengths. We don't necessarily want to hide any of the weaknesses but we don't want people to focus on anything that might be a negative of a property. So:
Showcase the property strengths
Make sure that you're using professional photos and videos
Make sure that you know where your property is listed
Whether you're going to use social media or not
Make sure that you're listed on the sites that really do attract the best potential buyers for your property
Consider whether or not you want to do a ‘sneak peek’ or a ‘coming soon’ as a way to entice potential buyers to get excited about this property
Have a good understanding of what Multiple Listing categories your property is going to be listed in and don't be afraid to use multiple categories.
Determine whether or not you want to use a technique like ‘price not disclosed’ or a ‘call for offers’ and if that's right for your property.
And last but not least, be careful and using the terms as is as it typically will send a very negative message to your potential buyer.
I hope that you've enjoyed our marketing tips and tricks. Until next time, take care.
18:04
For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio visit GrowingEmpires.com