A House on a Busy Street Priced Too High Won’t Sell
I visited a real estate club recently and gave a presentation about using hard money loans to do more deals. After the presentation, I was approached by two novice real estate investors. The told me about a “flip” they did recently that still had not sold at their asking price. They had their brother in law’s cash in the deal longer than they anticipated, so they wanted to do a hard money loan on the property to cash him out.
After getting further information and later taking a look at the subject property, it was obvious why the house wasn’t selling. The house was fixed up very nice, and was of a similar age and type of the comparables around it that were selling at their target selling price. But the house had one major flaw that the other houses did not have. It was on the corner of a heavily trafficked street, off an intersection, whereas the other comparables were all on quiet side streets or on a cul-de-sac. Not only that, but the driveway was really steep and at an odd angle for access on the street’s intersection.
A beautiful house, all remodeled with the right upgrades, but not selling at the same price as the other comparables. The house is priced too high because of its poor location on a busy street and intersection. Being first time real estate investors, this couple did not factor this into their numbers on this property before they purchased it. They will sell the house eventually, but they may not make money on this one. A good lesson learned for two first time real estate investors
