Is It Time To Unload Your Rental Properties in Baltimore, MD?

by | May 22, 2021 | Blog

To everything in life, there is a season; the same can be said for real estate investing, of any type. Understanding and manipulating those seasons to your advantage is one of the most difficult tasks in investing. It involves being able to look at economic trends and forecast the upcoming market deviations. If the market is down you may want to hold onto your investments and rent the property for the monthly income flow. When the market is up, you may want to sell off your investments for the highest possible net gain. Forecasting the upcoming seasons can also lead to unpredictability because life, unlike the real estate market, is not always so predictable.

While timing is critical it’s not everything, and may not be the only factor to determine the success of your rentals. As a landlord, you need to consider the state of your properties, taxes and projected repair estimates. As a person, you need to consider your life situation and needs vs wants as well as personal and financial factors. Below is one story of an amazing landlord here in Baltimore that had multiple factors to consider and when all said and done, decided to bulk sell her properties to Akin Developers.

The Story Of Suzie

Suzie Pendergraf was a bright, bubbly, middle-aged landlord who called us one morning with sunshine in her voice. She explained to Aissa Cisse-Sires, who answered the call, that she had obtained seven rental properties throughout Baltimore in her fifteen-year career as a real estate investor. She also told us how the investments were starting with the purpose of sending her children to college. She had a husband and twin 17-year-old sons. Both kids are getting ready to start college and Suzie has decided she needed to get rid of some of her more difficult rentals both to give her liquidity to send the boys to school and also to free up her time for a small “retirement”. These properties all required some degree of repair and Suzie did not want to put the additional funds into them to sell them on the open market. This is where we began to develop a plan that would get her exactly what she needed and be profitable for Akin Developers.

The Planning Stage

Planning needed to be organized and strategic. With seven properties to consider Aissa knew she had to divide and conquer. She took each property separately and performed a full property analysis including accounting for possible rent, potential ARV’s, and all foreseeable rehabbing costs. She then ran them through Akin Developers’ deal analyzer and approximated all of the potential benefits and costs of the deal proceeding such as costs for renovations, repairs, taxes, and fees for each property, and then evaluated the potential return on each for Akin & Suzie. Aissa wanted to ensure she made the best possible offer on the proper set of properties to maximize the benefit to both ladies. She cared about what Suzie needed, listened to her throughout the entire process, asked smart questions to reveal her monetary needs and, remembered the intent behind her decision the entire time. She knew, that if Suzie’s needs were not met she had to reason to accept Aissa’s offer.

The Offer

After only four days Aissa was ready with a proposal and called Suzie, who was very excited to hear from her. She offered Suzie an individualized proposal on 5 of her 7 properties and suggested that Suzie maintain the last two, which were in not such bad shape, as rentals to continue to support her income flow. On each property, Suzie would walk away with a minimum of $30,000.00 cash after eliminating her existing mortgage. The total net would be $150k which is the exact amount Suzie needed to be satisfied. Akin planned to wholesale 1 unit, flip 3, and add 2 more to their Ready-To-Rent Program. The initial wholesale coupled with the flips would completely pay off the mortgage on their Ready-To-Rent units bringing them the full monthly payment.

Suzie needed to think and speak it over with her husband. She was so excited about the offer and knew it was what she needed to make her dream goals come true. However she didn’t want her excitement to cloud her judgment so, she told Aissa that they would speak over dinner and she would call her back with a response the next morning. She got home and babbled everything to Frank, her husband. He agreed it was a good deal but, he had a few timing stipulations that he would document and send to Suzie and Aissa for their review.

The Deal

Frank knew that the boys’ first-semester tuition would be due in only eight short weeks, and wanted to address that as a main point of contention immediately. He amended the offer and countered with the same original offer adding an addendum where 15% of the combined properties value was needed in cash at closing, which would be six weeks away. Giving the funds time to clear and the kid’s school to be paid on time.

Aissa received this request with a welcomed armed because she had cash on hand to pay for all of the units outright and would have no problem delivering the funds by the necessary date. She immediately began to coordinate the five transactions as to not delay the process by even a day for Suzie and Frank. She began the paperwork and they moved forward at an exceptional rate. Through her connections, Aissa was additionally able to move the closing date to only four weeks away which greatly reduced Franks’s stress level.

The Outcome

Four weeks passed by quickly and everyone sat down at the closing table, with five properties to close one everyone is expecting a long, exhausting day. However, much to their surprise, the paperwork was all prepared properly by Akin Developer’s amazing team and the entire five-property closing took about an hour. The wire transfer went through that afternoon because Aissa had scheduled the closing for 8:00 am knowing that the Pendergraf’s needed the funds. Suzie and Frank were elated. They were able to consolidate their bills, pay off all of their existing five mortgages, and pay the boys’ tuition with their smart-money moves! The tiny idea they started fifteen years ago had paid off as it was supposed to and more. They even kept two properties that were low maintenance for future earnings. The Pendergraf’s said that if they had to do it all over again they would choose no other path. Akin Developers went above and beyond to ensure that this was the perfect strategy for the Pendergraf’s and their current season in life.

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