One, Two, Three Strikes your out!… Well not in this ballgame.
Hello, My name is John and I am the Author of the Smoky Mtn. Cabin Owners Manual.
Today I am going to talk about Real Estate and I am going to use an allegory and loosely liken Real Estate to a sport.
My goal in this article is to help Owners of Real Estate realize that situations change, markets change, life changes as we go through stages and before we know it the plan that we had or the goal that we were reaching for has been swept away. We stand there, stunned, confused and looking for answers. Hopefully, this information will help you reevaluate your situation and allow you to stay in the game; ready to win the next round.
Because there are so many things that can cause our game to change, I am not going to go into them, but chances are, if you have owned property for over 7 years, then you probably have experience. Why 7 years? Well, that seems to be about how long it takes for our lives to change drastically. Think about it, Were you the same person at 21 that you were at 28, 35, 42,49,56,63…Probably not… So, I press on to the matter at hand.
At this juncture I am going to assume that You have Real Estate. If you do not already have Real Estate, we have information available as to how you need to plan so that you can own it in the future.
In fact, I am going to assume that you have Real Estate that you live in and Real Estate that you own for other purposes. Rental Property, Investment Property, fun property, and the list goes on. So how do you know when it is time to sell and move on?
Sometimes Life hands us the decision whether we want it or not. I have worked with many Clients that “Had” to sell. Family members became sick and there was no time to visit the Cabin anymore. A job change meant that they had to move and the Vacation home was too much hassle…
Some times it comes as a surprise, someone calls you up and says they want your property and will give you _______ amount… then you almost jerk their arm off pulling the money out of their hand.
It may be that your health has changed and you have to make some tough choices… at any rate, you are trying to figure out how and when to sell.
It is a foregone conclusion that most Cabin Owners are financially savvy. You are most likely above average in means and have some financial experience under your belt. You are well on your way into the Sport of Real Estate. If you have not yet purchased a Cabin, then please come talk to me first! Our System can save you a world of hurt and heartache.
So, Since you have Investment property, you probably know that you need a financial plan and you have paid some good money to professionals to help you develop that plan. Where this information comes into play in this Sport is in showing you the different options that you have as exit strategies.
Without beating around the bush, let us get to the point.
You are faced with the dilemma of how to get out what you have put in… and hopefully more. I will refer back to another piece that I wrote on Cabins and tell you that there are three values that Cabins have.
Market Value is the first. This is what the invisible hand of the market moves the waters to say what someone else should pay for what you currently own.
The Second is what I call Business value. This value is specifically tied to income producing properties. It would be similar to the EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) and value systems that is used to value businesses.
Last, but certainly not least is what we call the Wow Value. It is pride of ownership, it is the use value, it is the knowing that I own that little slice of heaven. This value is hard to put a number on. It is by its very nature wholly subjective. If the business value (EBITDA) is placed by using the head then the Wow value is determined in the heart.
Keep in mind, The market value is how most Cabins are sold, the Business value is how investors buy cabins and the Wow factor is how most vacation cabins are held. That means that the next owner will have their own value scale that they use and will most likely be using a different point of view than you. So it is best to build, maintain and use your cabin keeping all of those values in mind. Doing so will maximize your Return On Investment.
That being said, let us move forward.
You own a cabin and are wondering if you should sell or keep it. How do you decide? Allow me to make a few statements and then you can ponder your own next move.
- Position yourself in a place of power.
- Find a professional that has the knowledge to help you determine where the market is in its cycle.
- Create a set of markers to gauge where you are at.
- Find out what your options are.
- Choose a set of determining factors.
- Set a predetermined time to make the choice.
- Make the choice.
#1-The first step. Position yourself in a place of power. This is a must if you are going to win in the Real Estate Sports. It is actually something that you need to keep as a constant reminder. Every move you make needs to be calculated and risk analyzed to make certain you are moving in the right direction. In the Real Estate Sports you want to PURCHASE with power and SELL with power. Unfortunately I often see people negotiating as if they have power when in reality they do not. This is a dangerous position to play as if you are playing against someone with experience they can spot the ruse and can take you to the cleaners.
#2- Every market has peaks and troughs, you would be wise to find someone that has a good idea of how the market is moving. The market could change in an hour, so nothing is certain, but having an Advisor can make your job much easier.
#3- Create a set of markers to gauge where you are. Saying this makes me think of my Grandmother, we called her, Mamaw. Every so often she would pull us over to the doorway and mark our height and the date. It took me a while to understand her thought process but sooner or later I saw that my marks were getting higher and it was hard for me to believe how fast I was growing. In the same manner I suggest that you set benchmarks for yourself to see where you are on your journey.
#4 Knowing what options you have may be the single most important information you can gather. Years ago I developed a system for making decisions in my life.
1- Know the Rules.
2- Follow the Rules.
3- Read the Signs.
Just like baseball, to play the game well we have to know the rules and follow the rules. Then all we have to do is read the signs. Take a base runner for instance. The runner is standing on Second base. The ball is hit fairly and rolls out into right field. The runner is headed for third with all their might, but are they turning around to see what is going on? Nope, they should be looking at the Third Base Coach. The Coach will tell them to slide, hold up or head home. Know the Rules. Follow the Rules. Read the Signs.
This information will come into play regularly and often. Use it wisely.
I have made a habit of always finishing an interview with the question, If you were in my shoes, what other questions would you be asking. It will blow your mind what answers you get from this question. You see, as a professional, by law, there are only so many things that I can say to you. But if you ask me what I would ask, then you open up a whole new world of possibilities of things I can teach you.
#5- Choosing a set of determining factors will set you free from the emotional baggage that comes with making major life choices. If I were to put a positive spin on this point, I would say that a rising tide lifts all ships. Be ready for the life to move you forward. A somewhat negative view would say not to let a sinking ship drag you down. You must be willing to cut ties before irreparable damage to other parts of life occurs. Real Estate is not as important as Family.
#6- This piece of advice is paramount. Set a date in the future to make the decision. This does not mean that if another change comes along that you cannot reconsider, but unloose yourself from self doubt and the agony of re-hashing old work. Set a date to make the choice.
#7- Make the Choice and live with it. Nothing else I know causes so much pain in life as second guessing yourself and living with doubt. If you make the right choice, Rejoice! If you realize you made a bad choice then learn and adapt so that you can make a better choice next time. It will all work out… If you let it work out and stop holding it back!
John D. Suttles, Owner of Cardinal Custom Lawn Property Maintenance
Marty Loveday and Associates Realtors, 130 Maryville Hwy. Seymour, TN- John@martyloveday.com Cell: 865-724-8402 Office: 865-573-9444
If you are reading this article you may be interested in help with Operation, Management or Maintenance of your properties. For more information download the free 10 page book, The Top Ten Drawbacks to Cabin Ownership and How to Deal With Them, from WWW.TheCabinOwnersManual.com or purchase the Manual for the current low price of only $10!
About the Author:
John operates Cardinal Custom Lawn Property Maintenance, www.CardinalCustomLawn.com, which maintains Mountain properties inside and out. He serves as a Realtor with Marty Loveday and Associates, www.MartyLoveday.com/John-Suttles/ where he uses his knowledge to assist those in the Cabin Industry (He is constantly looking for qualified listings to take to market) and he authored, The Smoky Mtn. Cabin Owner’s Manual, www.TheCabinOwnersManual.com where he offers his experience in Cabin rentals, maintenance and market to those who want to be successful in the Cabin Industry.
John is a recognized and highly respected author, educator, and businessman with a reputation for helping individuals and organizations create helpful and sustainable results.