Help! My House Flip won’t sell

[Jessica Pham]

Hi!

I am a new At investing in Real Estate. I am currently on my 2nd flip. The 1st one went beautifully but I am having trouble selling the 2nd one.

I have a hard money loan on it, and I am just about at the point where I can potentially break even if I sell it ASAP but don’t know other options.

The house has been on the Market for going on 80 days. It is priced under what houses are currently selling for due to it being on a corner of a busy street. I have dropped the price a few times know but I still have not generated any interest. The house has had 3 showings total. Open houses have not been successful. All positive reviews from showings as well as people who just came by to see it.

The address is 4155 Northaven Rd in Dallas Tx if you want to see it on Zillow.

I would greatly appreciate any ideas! 

[Aaron K.]

At this point you don't have many levers to pull besides price drops.  I would say your drone shots are probably hurting more than helping because they showcase the powerlines and the busy road.

[Wayne Brooks]

Only having 3 showings tells you everything you need to know....it is not priced anywhere Near what buyers will be willing to pay for it. Drop it at least 10–15%.  

[Justin Hammond]

@Jessica Pham drop it 10% to get a buyer asap. The market doesn’t care how much you make or lose, so take your beating and move on to the next. Chin up!

[Bob Okenwa]

You have not yet met the confluence of purchasing factors in regards to demand for, price and the location of the property. The power lines, busy street, and traffic lights surrounding the property are not doing you any favors. Northaven Rd doesn't appear to be all that bad, but Midway Rd is basically a freeway next to the house with 2-3 lanes of traffic in each direction.

Your agent should be getting feedback from each showing with info about what the buyers didn't like about the property. Hint, the answer is always going to be location, so your price needs to make up for that.

[Lucia Rushton]

@Jessica Pham. Looks like you did a good job on the rehab and staging. In this market it comes down to price. What comps has your agent given you ?

[Charlie MacPherson]

@Jessica Pham  I don't know your market, so it's hard to comment on the price.  However, with 80 days on market and only 3 showings, that's a very clear indication that it's priced too high.

Look at it this way - if you priced it at $1.00, it would sell in seconds.  If you priced it at $1,000,000, it's not going to sell for decades.  Somewhere in the middle is the price that will cause a buyer to jump at it.  You have to find that price.

You can try to sweeten the pot with a free home warranty and a $1,000 bonus (paid at closing) to the buyer's agent if the property is under contract by [date] and closed by [date].

Aside of that, revisit your comps and drop the price by at least $10,000. Time it right too. A price drop in my MLS is flagged as such for the day you make the price change and the following three days. That means that Thursday is the right day because the "price change" flag is active for Friday and through the weekend where more home shopping is done. Check with your agent as your MLS may be different.

Make sure your property is active and correctly marketed on Zillow.  I'd also hit Craigslist and Facebook Marketplace.  Right now, you need all the exposure you can get.  In fact your agent should be doing that for you.

Good luck!  

[Christopher Spear]

Hi Jessica,

I agree with the other replies. Your house is priced too high, and it's likely due to variables other than just the house itself (road, powerlines, etc.). One of my flips sat on the market for 3 months. It turned out to be a combination of the market softening, too much inventory in my price range, a realtor with an optimistic listing price, and the drug dealer next door. None of those factors had anything to do with the quality of the rehab, but I ended up taking a sizable loss anyway. Don't ride your house down. Chop the price, move the house, take your lumps and move on. And don't feel lonely; it happens to the best of us!

[Rosa Sugo-Golden]

in my case what it works is facebook groups and craiglist. Good luck!!! 

[Kyle Keller]

@Jessica Pham

I agree, drop the price. Any home will sell in any market if it is priced right.

[Christopher Spear]

Originally posted by @Charlie MacPherson:

Look at it this way - if you priced it at $1.00, it would sell in seconds.  If you priced it at $1,000,000, it's not going to sell for decades.  Somewhere in the middle is the price that will cause a buyer to jump at it.  You have to find that price.

Yep, I always say that every house will sell, at the right price. Any adverse factor - the condition of the house, the neighbors, the neighborhood, the market, the economy, the tax liens, the barking dogs, the gunshots - can be overcome with the right price. As Charlie said, you have to find that price!

[Aaron F.]

This is something I've wondered about for a long time: how do you comp homes in nice areas but on a busy road to accurately estimate ARV?

If I were looking to purchase a home and my price range was >$500,000 I’d have a decent number of nice options in quiet neighborhoods. So I imagine that it’s hard to have true “comparable listings” from the perspective of the buyer. Everyone knows to discount the house for being on a busy road but it seems like total guessing as to how much until this happens when you keep dropping the price until it sells.

I know that area pretty well because I used to go to the YMCA there. It’s a really nice neighborhood so hopefully you sell it soon. It looks like somebody will be getting a beautiful home.

[Alex Grosvenor]

@Aaron F. on the BiggerPockets podcast they talked about dropping the price 3% from the other comps to account for a busy road when the market is really good when it’s not then it goes to 8% to account for it. 

@Jessica Pham the house looks beautifully updated. Have you thought about other exit options? Refinancing through hard money for a longer term pulling out 80% LTV. You get more of your money out but you have a higher interest rate. Then use the property as a rental? Or even refinancing through Fannie Mae and Freddie Mac getting 75% LTV back and renting it out. You leave more money in but this gives you a lower interest rate.

[Jessica Pham]

We are at $253 a sqft which is in the median price range for the area but on the low end for homes that have been renovated.

Originally posted by @Lucia Rushton:

@Jessica Pham. Looks like you did a good job on the rehab and staging. In this market it comes down to price. What comps has your agent given you ?

[Jessica Pham]

We had a very difficult time getting to our ARV and even finding comps has been challenging. When setting our initial ARV we went with 20% below comps in the area to factor in the busy street. We are now asking for 25k less than even our initial listing price. I’m sure there are a lot of factors at play so I’m just tying to figure it out, and move on. 

Originally posted by @Aaron F.:

This is something I've wondered about for a long time: how do you comp homes in nice areas but on a busy road to accurately estimate ARV?

If I were looking to purchase a home and my price range was >$500,000 I’d have a decent number of nice options in quiet neighborhoods. So I imagine that it’s hard to have true “comparable listings” from the perspective of the buyer. Everyone knows to discount the house for being on a busy road but it seems like total guessing as to how much until this happens when you keep dropping the price until it sells.

I know that area pretty well because I used to go to the YMCA there. It’s a really nice neighborhood so hopefully you sell it soon. It looks like somebody will be getting a beautiful home.

[Alex Grosvenor]

Originally posted by :

@Jessica Pham Also when you finish this property hopefully not at any loss at all make sure you go back and reflect on what went wrong so you don't make the same mistakes again. TONS of people say never buy near a busy road and now you know why.
Also, ALWAYS have solid comps!! Without solid comps you cannot truly place your ARV anywhere. If you are having trouble finding solid comps that means things aren't selling in that area. Why aren't things selling? Solid comps make sure you know your ARV. ARV makes or breaks your deal.