Ever get discouraged in REI?

Question

So, 4 rental properties and 1 flip later, I'm getting discouraged.  I'm pregnant and sick, and SICK of dealing with tenant issues and contractors.  Plus, our flip has been on the market for about 3 weeks now, with no offers.  I'm sorry to say I'm getting a little discouraged.  It doesn't help that I'm pregnant and sick, I know.  But has anyone else ever been discouraged?  So far, REI seems like such a hassle.  I need some encouragement.  Oh, and utilitiy payments on all these houses are DROWNING us and totally depleting any cash flow.

Account Closed · Answer

hey, it's a stressful business...everytime i get a call from a tenant, my heart jumps a little wondering what's it gonna be next...but in the end, it's usually minor stuff....for me, it seems everything bad will happen at once, and then 3-4 months go by smooth sailing....just part of the biz

Katrina P. · Answer

We just received our first verbal offer!  They offered $130k + they want 5% closing help.  We countered at full price - $137k - and gave them the 5% closing.  They verbally accepted, and we should get the written offer tomorrow morning!  YAY!!! THANK YOU JESUS!!!  I know it's not final until it's final, but I'm happy!

J Scott · Answer

The key to selling in that type of market is for buyers to look at your house and say, "I'd love to look at more houses, but I love this one and don't want to take the chance of losing it to someone else."

To do that, you need to have the NICEST house at the price -- not the third nicest, not the second nicest.

Is the house staged?  If not, stage it (I know others may disagree, but this has been the biggest key to our success).

Sounds like the house might be priced a bit too high.  Lower it 5-10%.

Incentivize the buyer's agent to get their clients to make an offer.  Do that by offering a 1-2% selling agent bonus.

If you get desperate, offer to pay the appraisal and/or inspection costs for the buyer.  Offer closing costs.  Etc.

Account Closed · Answer

congrats and good luck getting it closed up

Account Closed · Answer

ha, good to know jeffrey....thanks for the encouragement!  seriously though, i hope to one day have someone working for me that takes the calls..i'm getting tired of doing everything myself!

J Scott · Answer

Any time we think a house may be more difficult to sell for some reason or may be listed at the higher end of the price range, we'll offer a $1000 bonus.

If we think the house will sell quickly, we won't offer the bonus, though we'll generally give it to the agent anyway at the closing just to build a relationship and encourage the agent to bring their future buyers to our property.

Generally, we won't put the bonus in the MLS listing.  This gives us an excuse to call the agent at some point -- either before, during or after a showing -- as a busy agent is much happier to speak with you when it's about making more money...  :)

See this thread:

http://www.biggerpockets.com/forums/67/topics/62850-home-staging-how-much-

Katrina P. · Answer

Thanks, BryanA!

Thanks, J Scott.  Yea, I agree...my Agent should have been on the phone at that point.  But I didn't think to offer a Buyer Agent bonus, until you suggested it.  So going forward, I'll definitely implement that strategy...do you think we should do it as a routine practice, or only when the house has been on the market for a while?

Yes, there are blinds on all the windows.  Next time around, we're definitely gonna try the staging.  How much does it usually run?

J Scott · Answer

This is where a great agent will make a huge difference.  Your agent should be on the phone letting the selling agent know that there's a bonus for him/her, that you're flexible with helping in closing costs, etc.

You need to tip the scales from 50/50 to heavily in your favor, and this is an opportunity for your agent to step up and do that!

Btw, one more selling tip I forgot:

Make sure that for EVERY showing, you or your agent gets to the house an hour before the showing, turns on all the lights, opens the mini-blinds/curtains (you DO have mini-blinds or curtains on all windows, right?), makes sure the temperature is perfect, makes sure the air fresheners are making the house smell great, etc.

When a buyer walks into you house, it should feel like a home, not a vacant house (another reason staging is so important); the first impression is by-far the most important.

Good luck!!!

Joel Owens · Answer

"Lowering the price 5-10% eats into our profit"

Reducing 2k at your price level isn't even a 1 percent reduction in price.

You are pregnant and need to lighten your load.

You don't want to chase the market down or have new listings come up at a cheaper price or have a seller get desperate and reduce big and set a new price medium for your market.

You need to reduce now and get it closed.I have seen this happen over and over. Nightmare stories of flips gone wrong and then turn into rentals and investor didn't want.

A buyer with many choices doesn't care about your profit margin and will look at the seller that works with them and gives them a good deal.

If I go to a car dealership and they give me a hard time I just go across the street to another car dealer who will play ball.

If they were the only car dealer for 30 miles then they have and advantage. What you are describing in your area is a flooded market with properties.

Katrina P. · Answer

Thanks for all the selling suggestions, J Scott.  No, the house isn't staged.  I'll definitely talk to my husband about staging it...I'm willing to try nearly anything at this point, to stop paying on that HML.  I'm also gonna talk to my Agent about offering the buyer's Agent an additional 1-2% bonus.  That sounds like a great idea.  Lowering the price 5-10% eats into our profit, significantly, so we'll do that as the worse case scenario.  It was originally listed for $139.9k, currently listed at $137k; I was thinking of lowering it to $135k.  We'll see.  But I just looked in my email and saw that we have another showing scheduled for today at 1130.  It's actually a 3rd showing for an Agent that said their buyer is going to choose between our house and one other.  So I'm PRAYING they make an offer.  Fingers crossed.  I'll keep you guys posted.

Ever get discouraged in REI?

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