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Stuck with a House for sale since November
Hello guys my name is Yosleys Boffill. I have been flipping houses for a year or so in the Midwest specially in Lousiville,KY. I was doing fine until I decided to go for a more expensive neighborhood and price range. We are selling this house in the Highlands ( good neighborhood) and we have been stuck with it since November. We have dropped the price a lot, we even have an appraisal for 20k over listing price, we have had 22 showings since the last decrease in price.....and nothing. Everyone finds the rooms too small or something that does not fit their family,etc.
I am at the point of breaking even but in a month I will be losing money because of the Hard Money lender payments. The agent has done everything for the marketing and open houses and social media....again people are coming every week. I will appreciate any idea from the most experienced investors on how to proceed on these cases to get out of this hole. I got 3 other flips going on but I will love to get out of this one. Thanks in advance.
Quote from @Boffill Yosleys:
Hello guys my name is Yosleys Boffill. I have been flipping houses for a year or so in the Midwest specially in Lousiville,KY. I was doing fine until I decided to go for a more expensive neighborhood and price range. We are selling this house in the Highlands ( good neighborhood) and we have been stuck with it since November. We have dropped the price a lot, we even have an appraisal for 20k over listing price, we have had 22 showings since the last decrease in price.....and nothing. Everyone finds the rooms too small or something that does not fit their family,etc.
I am at the point of breaking even but in a month I will be losing money because of the Hard Money lender payments. The agent has done everything for the marketing and open houses and social media....again people are coming every week. I will appreciate any idea from the most experienced investors on how to proceed on these cases to get out of this hole. I got 3 other flips going on but I will love to get out of this one. Thanks in advance.
Sell it on a Lease Option, get 10% down. Refinance with a DSCR loan.
What are the comps doing in that area?
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@Boffill Yosleys
Drop the price even further and see if you can create a bidding war
This is assuming you have the cash to payoff your hard money lender.
Quote from @Account Closed:
Quote from @Boffill Yosleys:
Hello guys my name is Yosleys Boffill. I have been flipping houses for a year or so in the Midwest specially in Lousiville,KY. I was doing fine until I decided to go for a more expensive neighborhood and price range. We are selling this house in the Highlands ( good neighborhood) and we have been stuck with it since November. We have dropped the price a lot, we even have an appraisal for 20k over listing price, we have had 22 showings since the last decrease in price.....and nothing. Everyone finds the rooms too small or something that does not fit their family,etc.
I am at the point of breaking even but in a month I will be losing money because of the Hard Money lender payments. The agent has done everything for the marketing and open houses and social media....again people are coming every week. I will appreciate any idea from the most experienced investors on how to proceed on these cases to get out of this hole. I got 3 other flips going on but I will love to get out of this one. Thanks in advance.
Sell it on a Lease Option, get 10% down. Refinance with a DSCR loan.
I had that option but how do I pay the lender ? 10% will not be enough.... I tried to refi but the rent will not cover my debt. I might even need to put money down.
Quote from @Chris Seveney:
@Boffill Yosleys
Drop the price even further and see if you can create a bidding war
This is assuming you have the cash to payoff your hard money lender.
I have thought about it but I am already 20k under appraisal and I am getting attraction of clients every week 5 or 6 showings but definitely the layout of the house is not great, not the finishes though. My further step will be to go even lower and take a 10k or 20k loss that I might use for my tax return next year before the hard money debt becomes even more.
Quote from @Daniel Dobbs:
What are the comps doing in that area?
I do not think is my price because we are already 20k under appraisal. But based on the comps I have seen a little bigger houses with garage going for about my appraised value or maybe higher. All these houses are way over the median sales price in this city and I guess everyone is slowing down on prices for that type of properties in the area.
Increase the agent commission on the Buyer side from the standard 3% (at-least here in GA) to 3.5% or 4%.
Quote from @Ricardo S.:
Increase the agent commission on the Buyer side from the standard 3% (at-least here in GA) to 3.5% or 4%.
I haven't thought about that. Thanks
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#3 Real Estate Deal Analysis & Advice Contributor
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Quote from @Boffill Yosleys:
Quote from @Ricardo S.:
Increase the agent commission on the Buyer side from the standard 3% (at-least here in GA) to 3.5% or 4%.
I haven't thought about that. Thanks
Unfortunately, this will likely work. Now the buyer's agent will be even more aggressive with trying to force his "client" to get under contract & close the deal. For every agent that always mentions they aren't like that-- they're wrong. 99% are like that.
@Ricardo S. why people don't like real estate agents. Pressure to buy something they don't want.
@Boffill Yosleys post a link of your listing. Maybe there are ways to tweak how it appears
Quote from @Anil Dham:
@Boffill Yosleys post a link of your listing. Maybe there are
Quote from @Anil Dham:
@Boffill Yosleys post a link of your listing. Maybe there are ways to tweak how it appears
https://www.zillow.com/homedetails/1740-Chichester-Ave-Louisville-KY-40205/73456717_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
If you are getting that much traffic the price is too high or the layout of the house isn’t good. Price you can fix but layout would set you back even further now. If people are saying the rooms are too small upping the buyers side commission isn’t going to help.
Doesn't matter if it's 20k or 50k under appraisal, it isn't worth that much if people won't buy it. Honestly sounds like it is priced too high from what has been said. Also are you talking about the CMA or you paid someone to appraise the house?
@Boffill Yosleys
Rehab looks on quality to be ok. A few suggestions
1. The pic w the back of the front door showing 5 or 6 locks doesn't convey a good look of safe neighborhood or any attempt to make a door attractive.
2. Kitchen island has minimal dining space as it lacks any overhang and most of it is taken up by the cook top
3. Basement elec panel needs trim around it and ceiling looks like it was patched and is hiding a leak. Basement also has some dusty looking floors and drywall not done.
Try to see if you can stage all rooms. don't leave any rooms vacant especially if the rooms are small they will look even smaller without furniture. not many people can imagine a empty room but if you decorate it or show them how it can be used it will be more helpful in buyers decision process. Good luck with your sale.
@Boffill Yosleys overall I think the rehab needs a few things completed to make it look like that 1) you didn't run out of money 2) there weren't corners cut elsewhere
Quote from @Daniel Dobbs:We paid a certified appraiser we got the report and everything
If you are getting that much traffic the price is too high or the layout of the house isn’t good. Price you can fix but layout would set you back even further now. If people are saying the rooms are too small upping the buyers side commission isn’t going to help.
Doesn't matter if it's 20k or 50k under appraisal, it isn't worth that much if people won't buy it. Honestly sounds like it is priced too high from what has been said. Also are you talking about the CMA or you paid someone to appraise the house?
Quote from @Anil Dham:I get it. There are some mistakes and the layout was key on this house . But I cannot keep spending on this house.
@Boffill Yosleys overall I think the rehab needs a few things completed to make it look like that 1) you didn't run out of money 2) there weren't corners cut elsewhere
@Boffill Yosleys
If it were me..I'd pull the listing for 2 weeks, complete the changeable things, take a few new pics, and make the listing magically reappear April 1 and feel like a new listing.
Quote from @Anil Dham:
@Boffill Yosleys
If it were me..I'd pull the listing for 2 weeks, complete the changeable things, take a few new pics, and make the listing magically reappear April 1 and feel like a new listing.
We got an open house tomorrow. If it doesn't sell this week I gotta do something. I appreciate the feedback
Raise the price back up and advertise offering rate buy down. With $15k toward closing costs, a buyer should be able to get a significant rate buy down and rate is a major pain point right now. They may only be able to use 3% or 4% of the loan amount depending on the loan type, but getting creative may appeal to a different buyer than you've been attracting so far.
Quote from @Robert Payne:
Raise the price back up and advertise offering rate buy down. With $15k toward closing costs, a buyer should be able to get a significant rate buy down and rate is a major pain point right now. They may only be able to use 3% or 4% of the loan amount depending on the loan type, but getting creative may appeal to a different buyer than you've been attracting so far.
i like that idea!
@Boffill Yosleys I would not try to sheetrock around the panel in the basement,as it looks recessed. Finish the ceiling and put a cabinet door over that panel or hang a picture. In the bedroom with the map you have to stage it as a office. The lights next to the window would be great if you could position a bed that way but looks like the room is maybe 8 ft wide so I doubt you can. Get rid of the lights or stage it with a bed if one fits. I second the locks. Three of the 4 locks look to be surface mount. Pull the listing and do the minimal work to make it look finished, stage awkward rooms.
Your other option is to do a lease option. I don't know your market so can't comment on price but a couple of things just look strange/unfinished.
If you have been getting feedback from agents showing the property that the layout is the deal breaker there is not much you can do with that other than learn for the next one and lay it out up front and get feedback / input. You need to press the agents for feedback and see if they can get an offer to at least consider. At this point an offer would show interest.
Consider revising the listing . . . not sure about the restaurants and other amenities nearby - sell the house since the buyers will know the area.
Interest rates are driving sales and impacting flippers with HML payments. As you are finding, a month longer can kill you on the profits. Another thing is that Zillow and Realtor show the price history so buyers can see when you bought it and what you paid for it. And they do look at that . . .
Good luck and hopefully this is a one time lesson to learn.
