Creative Strategies on Selling Properties in a Down Market (Q&A)

 

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Question: Cameron thank you so much for this (Q&A) segment of your blog. You have some really good advice in which is why I'm coming to you with this question... I live in West Hartford now but I have two houses in Puerto Rico that I can't think of no exit for the next 5 to 10 years. One I own free and clear but it is located in a non desired area. On top of this, the way it is constructed makes it hard to get conventional financing so it can only be sold to a cash buyer. I have rented it in the past but it has been vacant for the last 5 months.
The other is a condo that it is located near a medical and law school. It's currently rented and I don't owe much more on it. I would love to find a creative way to get rid of both of this properties. What makes the exit hard, is the current economic situation of Puerto Rico, Government Bonds were classified as Junk bonds and most of the people in the Puerto Rico are employed by the Government. The current trend is a sharp decrease in population and unemployment well above the double digits. There are hundreds of vacant homes and rents are at all time low. I have offered seller financing, made attempts to swap my house for a house, land or even an RV in the US but no luck. I can not even take the equity out by re financing since no bank in the US will make the loan. I have offered Agents $5,000 bonus on top of the commission for the sale, attempt to rent it as a vacation home, etc..  My current strategy is to buy more houses to make up for the negative ROI but it really sucks to have two properties making you no money.
I need a brilliant idea to turn this around since I have run out of them.

Answer: Wow Luis that really is a crazy situation. I think that you've been pretty innovative in trying to come up with different solutions but here are a few more that you can try out. First is to check the price. I don't know what your asking price is but often times if you just bring it down a few thousand, you might be able to pull in a buyer, even if it's just on the property that you own free & clear. Then you can use the proceeds to pay off or pay down the condo and then sell it at a discounted rate as well. Another option is to do an Absolute Auction on the free & clear property. Again, use the proceeds to pay off or pay down the condo. You could also find other landlords in the neighborhood by searching public records. Contact them to see if they are interested in purchasing both condos as a package deal. Another option for the condo is to market it to students and their parents at the college. Stress how close it is and how it makes sense for a student/parent and can even have roommates help pay the mortgage. The college might have a housing office or a campus newspaper to advertise the condo. I hope this helps. If I think about any other options I'll email/call you.  

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This is not legal advice. Please contact an attorney for professional legal advice.