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Rising Lumber Costs and Real Estate Investment Strategy: Why YOU Should Motivate Sellers To Skip Repairs and Sell AS-IS

by | Sep 2, 2020

Blog Post: Why Sellers Should Sell Now, Even as Lumber costs are making repairs more costly.

 

What Does A Changing Lumber Market Mean for Real Estate?

I saw this visualization this morning and keep thinking of ways lumber costs + current events = bigger-than-you-think impacts on the real estate market.

From Christopher Schwarz. View original post on LinkedIn.

First, I thought about Jim Forsythe discussing a deal he’s working on during a Probate Training Call last month.  Jim is helping one of his probate leads sell timberland they inherited.  Because Jim understands the importance of finding the right buyers, he sought out sawmill investors.  As a result, Jim and his seller received competitive offers from buyers who understood the real value of this land.

Next, I thought about my contractor friends and the concerns they’re expressing about lumber costs.  Because property owners are putting off repairs, contractors are short on income.  With sellers losing motivation to sell, many real estate agents and investors think a shrinking pipeline is inevitable. 

Quickly, I remembered Chad’s strategy for contracting vendors in advance for bulk work.  The goal here should be two-fold: Build strong relationships with vendor partners (during a time where much of their work is being delayed), AND offer vertically-integrated solutions to sellers.

Listen Now: Chad’s Mastermind Prospecting Strategy, Timestamped at 27:40

Better Real Estate Training Means You Can Help Sellers Make Better Decisions Now.

Motivated sellers that were ready to list with ARV (after repair value) pricing now face a new obstacle of rising lumber costs.   Many of these sellers think their only (and best) option is to sit back and wait indefinitely to move forward with selling their property.

Sellers might not realize that they can net more by minimize holding costs and selling as-is.  Sellers likely don’t realize how creative financing options can help them, either.  You play a vital role in educating your sellers.  Are you offering these options, and are you educating your prospects on why they might be good solutions for them?

Get Chad Corbett’s free Training Webinar and Infographic on 7 Creative Financing Strategies You Should Know

[contact-form to=’katt@alltheleads.com’ subject=’Please Send Me The Creative Financing Video!’][contact-field label=’Email’ type=’email’ required=’1’/][/contact-form] 

Current events will only kill your pipeline if you let them.  If you make the deal make sense, your sellers will move forward.  Get the training to grow your skill set now so you can offer great solutions in any situation, and surround yourself with real estate masterminds so you can always learn something new.

WATCH AND LEARN:

Mastermind Snippet: Price Options, Estimating Repair Costs and ARVs, and Choosing The Best Deal Structure (23:12)

Caller is looking for clarity on how to price properties out and choose the most profitable deal structure.  Chad and the caller discuss the different price options and the math behind calculating repair costs, after-repair values, and return on different listing, acquisition, or creative finance strategies. Chad also discusses how rising repair costs due to lumber market supply chains make as-is a much safer strategy right now.

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