Fixing the house selling Machine

My student, Carl Majeski gets credit for this. He recommended the topic "Fixing my selling houses machine" so here we go...

I was buying 5 to 7 houses a month and my market for selling got soft. I started to pile up empty houses so I needed to take steps to fix the selling machine and here is what I did...

Fixing my house selling machine: My exit strategy is rent-to-own so when I talk about 'selling' I am talking about getting a tenant/buyer in the property.

1. Fired the sales person.
   I changed the compensation plan. I had a sales person that was getting a higher amount if she cashed out on a house and a lower amount when we put someone in on a rent-to-own basis. Well it took me a few months to figure out that she was turning down rent-to-own folks and holding on to houses waiting for the cash buyer. 85% of my homes go rent-to-own and then I get cashed out in 12 months. She was holding houses after they were newly rehabbed waiting for the perfect buyer. It was a dumb move. It cost her the job and cost me a lot of money on holding cost.

2. Hired two new sales folks then fired one of them. There is a rule to hire slow fire fast. I am getting better on the fire fast part. Don't want to seem harsh here but the bottom line is you can't let anyone slow you down and potentially steal your dreams...

3. Shut down buying machine. Ouch! Didn't want to do this but the selling market was soft and so I put my house buyer on selling houses too.

4. Started monthly off-site, meetings with my staff. We looked at past years numbers (sold houses) to determine what worked and what didn't. This was very enlightening and so we then took that information and did the following:

B) Adjust the "model" we were using to purchase houses. What comes in needs to go out and what was coming in wasn't selling. The results of the revised model were that I needed to buy higher price houses to rehab and not rehab the low-end properties, just wholesale them to someone that wants a rental.

C) Stop over-fixing houses in low-end areas. These are properties that we still had in inventory and would get them back after an eviction. The biggest changes was, rather than putting vinyl in the kitchen and bath and have good carpet in the whole house, I switched to putting nice carpet with a nice pad downstairs but glue down carpet in kitchen, bath and upstairs bedrooms to cut cost. We found that many of these homes would come back to us one or two times before they finally sold and this change would not hurt us selling these houses in the low-end area and be cheaper in the long run.

5. Stage the houses. Make the rehabbed home look nice but at a very low cost. We put up a cheap table with fake flowers and a tablecloth in the living room. We put potholders in the kitchen and hand towels in the bathroom and hung a shower curtain. I also installed mini blind (very inexpensive ones) in some, if not all, the windows. I even have guidelines on how I want the mini blinds to look once they are up. Keep them closed for the nice look BUT pull them up a foot so people can look in the house. By the way, it seems like the bath towels always come up missing by the time the house sells.

6. Fine tune the advertising we were using. Test over and over until we hit on the ones that work. You know what I found? Yard signs work best. Do not run newspaper ads early in the month. The phone starts ringing after the 15th.

7. Listed some homes. I sold two this way. I have it set up with my realtor that if I find a buyer; he will cancel the listing at no charge.

8. Wholesale more. I did three wholesales.

9. Do sweat equity deals. I did four of these. I love these. No rehab work for Alan.

10. Get the house selling website in shape. Made sure all the house pictures were up-to-date after rehab and all the info was current.

11. Get our 1-800 number home information up-to-date. We use calling service to give info on each of the houses we have for sale.

12. Hired a new person to handle much the clerical work above. One person is responsible for the rental management for all the houses we own. The new person handles the buying and selling clerical work such as advertising, land trust creation and dealing with private lender paperwork.

13. Got more signs in the yards, 5 in every yard plus one in the window.

14. Get pointer signs out. 4 per house

15. We use Kris Kirschners autopilot selling techniques too.
    All my house sellers have a cell phone on them, etc.

The above was an aggressive approach I took to solve our house selling issues. It worked, and we are now cranking up the buying machine once again.