We now have a formula for selling a house. You locate comparable properties in your area, find out at what price houses sell and what price they do not sell. You set your price at or below what is selling and it is soon done with. I presume that if you do not price to sell then you are in for a long torturous wait. I abhor waiting.
I have also had a taste of using real estate as a means of helping people. With the last sale I was able to take a family losing their home and kept their household intact while actually making money for myself. Can you get a guaranteed 4% on your money right now?
Let’s do it again.
Cathy and I were living in a condo. My mother was living in a premium old folks home and I didn’t like what I was seeing. When going over to visit, having my own key, I knocked on my mother’s door and I heard her call out, “Come in!” just as normal as could be. When I entered it took a minute to find her because she had fallen backward into a box and couldn’t get out, rather like a turtle turned over on its back. This and other related things lead me to decide to take her in.
The condo we were living in was not well suited for my mother. It was a small place with kitchen, dining room, and living room on the ground floor and upstairs were two bedrooms and a lone bathroom. Stairs. No good. We decided to sell our condo and rent a double-wide mobile home (manufactured home for the sensitive) which had a nice open floor plan: three bedrooms all on one floor, and two bathrooms. Perfect.
We had purchased the condo for about 30K and put a little money into it replacing carpeting and linoleum throughout and had the walls painted. I told my old college buddy Laurie about the place offhandedly and had in the past told her I thought the $1400 rent she was paying on one of the two houses she lived at was outrageously high. She has two music stores and she spends half the week in one city and then drives 150 miles to the other store for the other half of the week, teaching at each one.
I seemed to have no immediate takers so I enlisted a real estate agent to sell the place for 30K. It was a fair price and we were prepared to lower the price if it didn’t sell within a month. As soon as we got the agent we rented the mobile home and put the lease exclusively in my mother’s name. (If she were to die the lease would be instantly breakable. One sets up dominoes as one goes through life, you might as well set them up to fall in your favor.) Mom was going to pay the rent, my wife is a retired nurse, and there are services available for bathing and other care that mom was already getting.
Then Laurie approached me and asked if she could get a deal like I did with the house I recently sold. Really!?! I had just told her about it and could have sold it to her through a lawyer like the last one without all the mess of a real estate company and all their paperwork and fees. Long story short, I told Laurie she could have the same deal as I did with my mother’s house at 25K and 4% on a promissory note. I even paid all the other extraneous fees. Here’s why:
When Laurie first got her first music store she was working there and her uncle owned the place. When he retired she took the store from him, I don’t know the details. As an inexperienced business owner she got ripped off in various ways and also screwed up her taxes in a rather unfortunate way (for eight consecutive years). The business was doing OK, but she was up to her neck in debt. I set it up so that, in her words after the fact, she was saving a thousand dollars a month. We agreed that whatever she benefited she would use to aggressively pay off Uncle Sam and whatever else she owed and get her slate clean. Then she could pay me off early and get debt free and start building up a cushion of savings in the bank.
The funny thing is on two separate occasions within a few months I had taken two separate households that were each paying $1400 per month on mortgages and shifted each into paying me $253.11. A remarkable coincidence.
Next time I will describe how we ended up where we are now and why. That will be Part 5, and this should conclude with Parts 6 and 7 as I help out in two other instances later this month and that should be the end of it. I will discuss the last two after they happen.