Have not been able to sell my 2 flips?

[Carlos Garcia]

So I started these last 2 flips and finished the renovations within 45 days. We put both houses in the MLS and have had to reduce the price by more than 14% and still no offers. I am getting a little scared as my wife is an experienced realtor and is experiencing the same across all her listings in central FL. Our business real estate coach has also shared that the entire US is like that in almost all the markets.

This is the first time this has happened to me.

What are the recommendations?

1. continue to sell

2. DSCR loan

3. other?

Both houses were financed via Hard Money at 11.99%.

[Caleb Brown]

What's the numbers at? List price, what you have into it, appraised value, potential rent? This will help. FL(what I have seen) has cooled off so DOM would be higher than before. In my area it's hit or miss but there is still many pockets that are moving fast

[Joseph Chiofalo]

Hi Carlos, 

In a best case scenario it would be a cash buyer or conventional loan buyer you would need due to the seasoning period of just purchasing the home. 

FHA financing will require a minimal of a 90 seasoning period before a new buyer can order a case number on the property to close.

What are the price points of these homes you are trying to sell?

[Shawn McCormick]

@Carlos Garcia can you afford to keep them as rentals? Your tax burdon will be less if you can keep them for 12 months and a day, maybe a rent to own scnerio?

Have you considered offering buyer incentives like buying their rate down? This could be a cheaper option depending on the cost of your money (are you using hard money?). Look at the comps that have recently sold and see if they had to offer concessions. Reverse prospect the area for recent cash sales and reach out to them to see if they are looking for other properties. 

Send me the addresses and I'll look them over. 

Best of luck!

[Doug Smith]

We're seeing stuff sit a bit in Tampa. It's an odd market right now. We're got a couple of really, really nice houses that aren't moving. In the past, I've had success with pulling such properties from the market, renting them for a year to see how the market changes, and then making the decision at the lease termination as to relist or not. DSCR rates are in the 7's right now. It might not hurt to consider playing long-ball with them for now.

[Carlos Garcia]

One is selling for $369k (ARV appraised at $415k)

Hard Money lender balance $254k

My own money $75k

and the other for $519k (ARV appraised at $595k).

Hard Money lender balance $368k

My own money $125k

[Dan H.]

I have been watching the emerald coast RE for over a year.  Not sure if all of these thoughts are relevant to your market.  

The market has slowed significantly. Insurance and the structural inspection and associated repairs resulting from the fallen seaside condos has resulted in huge HOA cost increases. The condo values have not fallen close to enough to compensate for the increased HOA costs but sellers are reluctant to discount appropriate for the HOA cost increases.

The rising insurance cost coupled with falling condo prices are affecting the non-condo residential RE.  

End result is the market price has fallen but more significant the number of units being sold has stagnated.

The reality is prices need to drop significantly before properties will start selling at a significant rate. This is especially true of condos where the HOA costs have risen so significantly. Note even an additional 20% price reduction would not compensate in costs for the increased HOA costs.

I suspect you are going to have to cut your profit expectations significantly.

Good luck

[Julie Muse]

I had a few listings sitting around too. This helped me...  I actually pulled off the market for 5 days and re listed them again.  On one, I had an offer within 3 days and the other one a week.  I am not quite sure how to explain why but it worked for me several times.

[Katie Smith]

Hi Carlos! If you are planning to refi I highly recommend not doing any more price drops. When you go to refinance, the lenders will have to base the value on the lowest listed price..

[Lake Lutes]

Hi Carlos - sorry to hear about your flips. The good news is, real estate is going to be more expensive and WORTH MORE in 5-10 years than it is today. The short term market fluctuates, but long term, holding real estate is very, very rarely a bad play.

As a renovator myself, I always try to hold instead of sell, that is why I prefer the term renovator, not flipper. If your properties have appraised for that much more than your list price, you should be able to use the higher prices for your appraisals, giving you more room in your LTV and cash back for a cash out refi.

You've got options!! Keep pushin

[Bill J Fay]

At this point, your listings are stale. I would take off the market and explore keeping it a rental or put back on the market with a refreshed listing. 

[Jacob Sherman]

I would rent and DSCR start cash flowing and worry about it a few years down the line

[Steven Goldman]

Quote from @Carlos Garcia:

So I started these last 2 flips and finished the renovations within 45 days. We put both houses in the MLS and have had to reduce the price by more than 14% and still no offers. I am getting a little scared as my wife is an experienced realtor and is experiencing the same across all her listings in central FL. Our business real estate coach has also shared that the entire US is like that in almost all the markets.

This is the first time this has happened to me.

What are the recommendations?

1. continue to sell

2. DSCR loan

3. other?

Both houses were financed via Hard Money at 11.99%.

Hi Carlos: If you have enough cash reserve refinancing and renting these properties may be your best option. Can they be converted to STRS? That might be an option. The market projections for South Florida and central Florida are for the market to continue to decline due to the insurance crisis and the rapid appreciation experienced since COVID-19. I would move quickly. Time is not your ally. Good luck.

[Scott Esmail]

Keep dropping price and hopefully you sell before you break even. If your going to loose you can take a loss or re fi into 7-8 percent dscr loan and hold for 5 years or so that is what I am seeing with the prepayment. I am in the same boat I have a flip that I thought would sell for $459k I am now down to $419 and will have to drop until it sells. Its best to get out and use the money for something else that you can do better on. The bad news is were in the summer slow down time now and less buyers then last couple months. There is not much buyers out there buying, on the flip side I have been able to buy 4 properties this month that were really good deals.

[Travis Main]

Hey Carlos, 

I'm following up on this, were you able to sell the properties off or refinance out?

[Carlos Garcia]

I sold one of them and the other one refinance

[Travis Main]

Awesome, I'm glad you were able to resolve the problem.