A bit ago I told you about how we evicted the tenant and were getting the house ready for rent again. Well, we did exactly that, got rid of all the trash the tenant left, cleaned the carpets, painted and did a major clean of the house which apparently the tenant was allergic to doing.
Anyway, we put the house on the rental market and the phone has not stopped ringing. My sole method of advertising was the sign in front of the house and Craigslist.
Because I was getting good feedback and from hearing comments from other investors about what the current market is doing, I decided to put the house up for sale. This is very easy for us because my business partner is a real estate agent so it takes all of 15 minutes to list a house in the Multiple Listing Service (MLS) where it goes out to every real estate agent in Atlanta.
We listed the house last Wednesday afternoon... There were about 10 showings on Thursday with 4 offers by Thursday afternoon!
Another 3 offers came in on Friday morning and get this...
Half of the offers were cash offers and some of them were at or above listing price!!
Over this past weekend we had about 25 showings and another 2 offers yesterday!
One of the things we are doing is that we were selling the house with owner financing. This meant that we would be willing to finance the purchase by giving the buyer a "loan" based on a purchase price that was $5,000 higher than the list price, then their payment would be based on a 20 year amortization schedule at an 7.5% interest rate. We also required a down payment of at least 3% of the purchase price.
What this does for them is allow someone that for some reason cannot qualify for a bank loan now but has enough cash to make the down payment and monthly payments and allows them to own the house now.
What this does for us is allow us to make the same cash flow that we would if we were renting the house but because we technically sold the house we are not responsible for maintenance or repairs. Our only function is to act like a mortgage company and collect monthly payments.
Like everything there is always the downside potential that they don't make the payments and then we have to foreclose and get the house back. But the down payment and monthly cash flow protects us in case we had to do that.
So the take away from the whole story is that demand for housing in Atlanta is very high and I think it at least has to do with low supply levels.
So here we are, a year ago we were having a hard time selling House #8 and now it seems that in the span of about a year we have drastically gone from a buyers market to a sellers market.
Unbelievable...this is why I love real estate!