Help. Out of state flip on market for months with no bite

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Help. Out of state flip on market for months with no bite

Samantha Mosquera
New to Real Estate · NJ · Member since 2022 · 5 posts · 1 vote

I currently live in New Jersey and decided an out of state investment would be more affordable. I purchased a property in Baltimore which needed a total rehab. After a year of renovating the property and having a hard time with the contractor, we finally were able to complete the project and hired a real estate agent to sell the property. The house has been on the market for over 7 months without a single offer. Did I hear the wrong agent? Was it a bad deal? Should I just rent it and refinance ? I don't know what to do but this project has been very costly and was my first experience doing a full reno. Just hoping to be able to make back the money invested because I have 2 other properties that been to be renovated. 

Please help.

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Kenneth Woodruff
Investor · Lancaster, PA · Member since 2022 · 74 posts · 104 votes
3y

buy the vacant next door and fix it, rent both

13Reply
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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Samantha Mosquera
    What's the bed bath breakdown and sqft? 

    What are comparables selling for in the area? 

    What would it rent for if you were to rent it out? 

    Have there been any showings? Did they provide feedback?

    It's definitely not going to help that the townhome next door is boarded up. 

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  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    3y

    Is it next to what looks like an abandoned house? That knocks a good chunk off the price if theres even abandoned houses on block. 

    0Reply
  • Account Closed
    Real Estate Agent · Auburn Hills, MI · Member since 2022 · 45 posts · 67 votes
    3y

    Looks great! How much is the rent, Can help sell it, contact me.

    0Reply
  • Karl Schmidt
    Investor · UT · Member since 2020 · 35 posts · 16 votes
    3y

    @Samantha Mosquera that a a pretty property. Unfortunately start making some aggressive discounts. Either your agent or u were unrealistic about your market.

    0Reply
  • Joe Norman
    Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    You're going to have a real hard time selling a retail property that is adjacent to a vacant, unfortunately. I can't give any more specific advice on sell/rent, price, etc without the address though.

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Samantha Mosquera are you still in a high interest loan that you need to pay off?  You could pay to have it appraised to see what you could get out of a refinance, without committing to going through with the refinance.  If you knew this and what it would rent for you could analyze it as a rental.

    1Reply
  • Samantha Mosquera
    OP
    New to Real Estate · NJ · Member since 2022 · 5 posts · 1 vote
    3y

    @Patrick Drury

    It's a 3 bedroom 2 bathroom with 1,216 sqft

    Comps for renovated properties are going for ~ $200-220k , prop that need some work are going for ~ $130-150k 

    I rent in the area is around $1600/month 

    There was a few showing but the vacant lot next door has been the the negative feed back. there are currently about 3 vacant lots on the same block rest. There are a number of newly renovated houses as well 

    0Reply
  • Kenneth Woodruff
    Investor · Lancaster, PA · Member since 2022 · 74 posts · 104 votes
    3y

    buy the vacant next door and fix it, rent both

    13Reply
  • Mark Cruse
    Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    There is limited information with limited pics. There is a substantial degree of things that could be impacting the sale.  The most obvious element are the vacants; it makes it difficult to sell that block and knocks down pricing for all. If you have multiple vacants that is most likely the root. Also, when you did the comps was your renovation on par with other units that have moved? Is your layout cool, hardwood floors, quality appliances, recessed lighting? Good HVAC? I see you have no granite or mounted microwave. My point is do you have the same characteristics as those others? You are already fighting the vacant issue. How is the crime on the block? Do you have 200 bozos standing out there all day and night? I see the alley and some are very ripe for crack and bullets. Do you have competent realtor? Most know that being on the market that long prompts some to relist it wont get bypassed. I dont know where this is but the problem with Baltimore is it goes block by block and to be successful you really have to know and understand your neighborhoods. Just examine everything. Best of luck!  

    2Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Market is soft right now, I would put it up for rent until after the holidays 

    2Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    3y

    Your timing was unfortunate.  I suspect you did not expect it to not be sold in 19 months, but the timing has made it so that you are attempting to sell in a market that the fed is trying to slow down and trying to slow down more.

    Without an address I cannot evaluate on anything but the pictures.  The area looks rough. Next to a dirty alley (why did no one clean the trash out of the alley before shooting the photos?).  A shuttered property next door.  3 shuttered properties on the same block.  I question if the area was worthy of a flip.  you want the highest return for effort in your flip.  Rough areas often have low return on the improvements.  People do not desire to pay top dollar in an area where RE has such low value that multiple units are shuttered.

    What does your RE agent say is the reason it has taken 7 months and counting?  I would consider getting a new agent. 

    I would attempt to get out immediately.  Holding costs, further rate increases may result in price declines, the need to extract investment all point to get out soon even if you are disappointed in your return (I suspect your return will only get worse with time).

    BTW the interior looks nice (narrow, but nice).

    I have passed on quite a few BRRRR properties (We do BRRRRs and not flips) because I believed the area would not provide me the opportunities that I was looking for.

    Good luck

    2Reply
  • Tricia O'Brien
    Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
    3y

    Are you comfortable with reducing the price at least 10% to try to get it sold? If not I would try to find a reputable property manager to at least do a tenant placement service or full service property Management starting December 1st.  It looks move in ready. Hopefully you can get it rented by January 15th if it's priced right. Make sure they do excellent tenant screening! Do a 6 month lease, not a 1 year lease if you want to try to sell it next summer. If you want to refinance in a few months then get a 1 year lease. Get the property manager to pick up any loose trash in the alley and bags of white trash bags before they take the photos to list it for rent !  Good luck!

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    3y

    @Samantha Mosquera how well do YOU understand the market versus relying on "experts"?

    Some thoughts:

    1) The messed up front sidewalk is not helping your curb appeal. How much to fix?

    2) The alley with the trash in the pic is also not a great look. What can you do about that?

    3) Why wasn't the whole exterior side of your unit painted? Again, not a good look!

    4) How does staging help in your market? Cost? There are also virtual staging options.

    5) How many open houses has the agent held?

    6) What other efforts has the agent made to make your property stand out from the crowd?

    7) How many price drops have you done? Many investors want to hold to the price they need irregardless of what the market is telling them - and continue to lose money.

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  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    @Samantha Mosquera It’s always price.

    If my flips are not getting on average one viewing a day, I’ll drop the price at least 5%, sometimes up to 10% within a week.

    I’ll repeat this process until either I get a good cadence of views and now I’m looking for one offer for every ten views, or until I decide it would make more sense for me to refi out and rent it.

    You’ve controlled the variables that you can control. It looks great but is abutting an eyesore. You should have dropped the price right away. Now the listing is stale and that too might be scaring off would-be buyers. Drop it now, at least 10%. 

    1Reply
  • Martin Smith
    Realtor · Washington, DC · Member since 2020 · 29 posts · 27 votes
    3y

    Samantha, 

    I work with investors in the Baltimore area, and I can tell you that Baltimore is a very tricky market where comps can truly vary by 10-50% (not a typo) on a block-by-block basis. I've seen properties literally sell in mere days for double what an identical property two blocks away may have been priced at and not sold for months, just because one property was on a "better block" than others. Feel free to reach out to me with some more details about where your particular property is if you'd like a second, impartial (but still knowledgable!) opinion about where you are on price for this one and what some ideas might be to help move it along!

    0Reply
  • Yamila PerinPro Member
    Lender · Member since 2022 · 12 posts · 1 vote
    3y

    @Samantha Mosquera

    The timing is very unfortunately with high interest rates, there are a few things that you can do but at the moment selling to make the money that you invested looks like your best option having in consideration that you are currently working in 2 other flips.

    Refinancing this for rental most of the time means that you will have to come out with more money towards down payment and closing cost and you will need to be cautious because markert is slow and you don't know what can happen with your other 2 investments.

    Best of lucks,

    0Reply
  • Sara Frank
    Realtor · Baltimore, MD · Member since 2020 · 255 posts · 182 votes
    3y
    Quote from @Samantha Mosquera:

    I currently live in New Jersey and decided an out of state investment would be more affordable. I purchased a property in Baltimore which needed a total rehab. After a year of renovating the property and having a hard time with the contractor, we finally were able to complete the project and hired a real estate agent to sell the property. The house has been on the market for over 7 months without a single offer. Did I hear the wrong agent? Was it a bad deal? Should I just rent it and refinance ? I don't know what to do but this project has been very costly and was my first experience doing a full reno. Just hoping to be able to make back the money invested because I have 2 other properties that been to be renovated. 

    Please help.


     Sorry you're dealing with this.. its really tough to sell a property that is next door or even on the same block as vacants. Unfortunately in Baltimore pulling comps is not as easy as picking the three closest sales -- SO many external variables can change from block to block that impacts value. 

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y
    Quote from @Samantha Mosquera:

    @Patrick Drury

    It's a 3 bedroom 2 bathroom with 1,216 sqft

    Comps for renovated properties are going for ~ $200-220k , prop that need some work are going for ~ $130-150k 

    I rent in the area is around $1600/month 

    There was a few showing but the vacant lot next door has been the the negative feed back. there are currently about 3 vacant lots on the same block rest. There are a number of newly renovated houses as well 

    Your ARV is off. 2713 E Monumnet is a much nicer renovation, is larger and sold for $155k.  810 N Linwood is larger, much nicer, and a superior style of rowhouse sold for $185k. 526 N Potomac looks similar to yours, without an abandoned adjascent and sold for $140k.
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  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    3y

    If you decide to rent try STR (ie Airbnb) if the area supports it.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Samantha Mosquera:

    I currently live in New Jersey and decided an out of state investment would be more affordable. I purchased a property in Baltimore which needed a total rehab. After a year of renovating the property and having a hard time with the contractor, we finally were able to complete the project and hired a real estate agent to sell the property. The house has been on the market for over 7 months without a single offer. Did I hear the wrong agent? Was it a bad deal? Should I just rent it and refinance ? I don't know what to do but this project has been very costly and was my first experience doing a full reno. Just hoping to be able to make back the money invested because I have 2 other properties that been to be renovated. 

    Please help.

     Simple answer that you do not want to hear, you overpaid therefor its overpriced, period. Refi get as much back as you can and rent it . Lesson learned 

    1Reply
  • Ozzy SirimsiBusiness Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes
    3y

    The thing is that 220K train is gone. A lot of people dont even qualify in rough areas anymore.

    Now it is lower price, hard core negotiation time.

    You need to lower the price until you get a buyer, get as much as possible and move on.You might lose money but this is the new market.

    There is no magic solution to it, accept your losses, calculate and move on.  

    1Reply
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