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B.C. (Before Cash)

By Arlene Wright-Correll

One day our family held a trust meeting and decided that in order to do certain things on a piece of property in TN we needed to raise some cash via selling some of our inventory that consisted of real property and some personal property.

Most of us know that to sell personal property; one has to be prepared to take some deep discounts. Also at that time we were experiencing a soft market for cash buyers for our real properties even though they all were good positive cash flow properties and we were willing to leave something on the table for the cash investors.

At that time the only advice we were getting from the real estate agents was to reduce the price, reduce the price, and reduce the price! At one point we realized that a great share of our talent lies in the very thing we were prepared to pay an agent to do. Sell our properties! With that in mind, we decided to practice what we preached.

The first thing we did was to make a list of all the things we would buy with the cash after paying brokerage fees, closing costs and taxes on any profits. That included, but was not limited to a forklift, a backhoe, another truck, plumbing supplies, carpeting, shower doors, regular doors and anything else we could think of, including moving a lot of stuff physically from one location to another.

The second thing we did was make a list of our inventory and especially the real estate based on what we ourselves would seriously consider paying for the cash flows giving us a good cap rate. The decisions were still really marketable prices on the properties.

The third thing we did was to make a complete flyer on each property, i.e. sq. ft, income, expenses, sale price, loan information, equity, etc.

The fourth thing we did was go out into the market place where we could accomplish what we needed to do and to do it quickly. Our son had a $69,900.00 3 unit apartment house property he bought for $50,000.00 and he walked away from the closing table with over $12,000.00 tax free cash from his loan and a free and clear, old but good working truck. He then sold that property to his father for $59,900.00 and picked up another $9,900.00 cash. The property had 3 perfect tenants that paid on time, never complained and produced a triple net monthly income of $265.00 after all expenses and debt service.

We still felt the property was worth $69,900.00 and so did the agent who listed it and then proceeded to keep talking down the property. To make a

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