Renovated flip, doesn’t sell, next options

Renovated flip, doesn’t sell, next options

Member since 2023 · 25 posts · 15 votes

I’ve finished my first flip in October in Richmond CA.  A single family, 3 beds, 2 baths, huge yard.  The house turned out great after renovations.  It’s listed at $650k based on comps.   It didn’t sell in 40 days though.  
My agent says it a combination of the time of year, rates and city reputation in general.  Although this neighborhood is very safe with nice neighbors, buyers and even brokers say there’s a “stigma” associated with the town.  

All that being said, a much less nice house with the same parameters a few blocks up sold in two weeks for the same price.   

In any case the question is what should I do now: 

- delist it and relist in March (what my agent proposes) - on the basis that more people buy in the Spring.   Is this true in CA where the  weather doesn’t change?  I’m not crazy about the idea of paying mortgage for another 2-3 months.  I’d have to refinance asap in this scenario (more costs).  

- reduce the price a bit ($10k) and still try to sell it now.  I don’t know what else we could do.  It’s priced pretty much at my cost.  

Thanks! 

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Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
2y

I would not call Roosevelt a good comp- it's 2 units and larger square footage sold $629 yours is closer to railroad and Pennsylvania Ave traffic that cuts through the neighborhood.

If you try to refinance my guess is $625000 is highest valuation out there and probably what you will sell for in March.

Reduce the price to $639,999 and see if Santa comes along.

Color is hurting in the photos (too hot)- tone down the red bark that you used in the images and the bathroom black and white (just do this with a photo app). The bark fades anyways. Add 15 more images - take the photos low from the farthest away corner. Put up some fake cameras and take them when you sell - an empty house is a liability. I do not suggest delist and relist. Esteban the Realtor says he has 22 years but he has a very small media footprint. This needs to be on Facebook, Insta and Tik tok with a  Filipino teen girl, a South Asian older man, and in Spanish. Richmond demographics are deep and varied- reach the audience. Your buyer is not a white tech worker in Oakland, it's a couple with children.   Offer some perks- $2500 towards a rate buy down or help with down payment assistance programs- advertise those programs with your social media. Can you afford a video? Esteban should pitch this at the Realtor meetings, have a broker preview with a taco bar in the back yard, door knock whatever drives traffic.

You know the problem is price. I didn't pound on reduce the price but that is the problem.

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  • Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    @Lor Fara

    You jumped into the deep end of the ocean for a newbie - I applaud you for that! The house looks really nice. Like the other comments have said, I don't think the Roosevelt property is a similar comp since they're over 500 sq ft larger and they have an ADU. I think you overpaid for the property but at least you took action and didn't spend years reading books and watching videos.

    I think de-listing it then list at again in March as a fresh listing or lower the price. If your realtor isn't do much social media marketing, they could be reaching a lot more prospective buyers. Like Caroline said above, maybe tone down the red color in the photos and add more pictures.

    If you were to consider renting it long term, what kind of rents would you get? I'll ask around my network and see if they know any PMs for the Richmond area. 

  • Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
    2y
    Quote from @Becca F.:

    @Lor Fara

    You jumped into the deep end of the ocean for a newbie - I applaud you for that! The house looks really nice. Like the other comments have said, I don't think the Roosevelt property is a similar comp since they're over 500 sq ft larger and they have an ADU. I think you overpaid for the property but at least you took action and didn't spend years reading books and watching videos.

    I think de-listing it then list at again in March as a fresh listing or lower the price. If your realtor isn't do much social media marketing, they could be reaching a lot more prospective buyers. Like Caroline said above, maybe tone down the red color in the photos and add more pictures.

    If you were to consider renting it long term, what kind of rents would you get? I'll ask around my network and see if they know any PMs for the Richmond area. 


     I'm kinda rethinking the de list re list thogh relative to the blue collar job market in Richmond. 

    I'm alot better at the front end (buy) than out guessing the back end (sell)

    1 more reason I use exit strategies as part of my plan when buying.

  • Specialist · LA & Ventura · Member since 2023 · 119 posts · 60 votes
    2y
    Quote from @Becca F.:

    @Lor Fara

    You jumped into the deep end of the ocean for a newbie - I applaud you for that! The house looks really nice. Like the other comments have said, I don't think the Roosevelt property is a similar comp since they're over 500 sq ft larger and they have an ADU...

    The Roosevelt comp is a 2/1 Main House with a 1/1 ADU, total of 1,286sf 3 bed 2 bath, so it's not THAT much larger than the subject property. The mistake was using a comp that is not a 3/2 SFR, next mistake is using a comp in a completely different neighborhood:


    The Roosevelt property is in a higher-valued neighborhood, as you can see the ARV & ACV (as-is value) is higher:

  • Member since 2023 · 25 posts · 15 votes
    2y

    thanks everyone for the feedback!  
    I’ve learned a lot. 

    Obviously we didn’t use just one house to calculate comps, we had a dozen on the list.   The one I posted wasn’t even listed when I listed.  It bothered me bc I didn’t understand the reasons it went so fast compared to mine. Now I have a clearer picture. 
    I’m able to make a decision for the next step, thanks everyone! 



  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Lor Fara:

    thanks everyone for the feedback!  
    I’ve learned a lot. 

    Obviously we didn’t use just one house to calculate comps, we had a dozen on the list.   The one I posted wasn’t even listed when I listed.  It bothered me bc I didn’t understand the reasons it went so fast compared to mine. Now I have a clearer picture. 
    I’m able to make a decision for the next step, thanks everyone! 



    You're more wrong in your purchase price than you were in a list price. Nonetheless, you'll be able to get out of this one without too much damage. Price it to sell or re-fi out if you can afford to & rent it.  I actually like the property. 

  • Member since 2023 · 25 posts · 15 votes
    2y
    Quote from @Steven S.:

    Yup, I see AS-IS this should have sold for closer to $425k, to be flipped at $610k. Whoever purchased at $540k is way too close to the ARV of $610-625k.


    Someone already ate up most of the value-add component of this deal, did you get this from a wholesaler? Someone made easy money on this, but it wasn't you

     @Steven S. no, this was a HUD purchase. There's no way I could have bought this house in 2023 with $425K in CA. I could have probably negotiated $10-20K less.
    I knew the margin was small but I thought manageable, and I wanted to get started, test my contractor teams.  
    everything went well until the sale.  Lesson learned that I do need more margin, and others! 

  • Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
    2y
    Quote from @Lor Fara:

    thanks everyone for the feedback!  
    I’ve learned a lot. 

    Obviously we didn’t use just one house to calculate comps, we had a dozen on the list.   The one I posted wasn’t even listed when I listed.  It bothered me bc I didn’t understand the reasons it went so fast compared to mine. Now I have a clearer picture. 
    I’m able to make a decision for the next step, thanks everyone! 




     I think most of us assumed you had other comps, that was clear in your writing. The question is what parameters were those comps. You still did a great job overall, flipping is hard and the last few years have been "different". Hope you stay in the game.

  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    2y

    The demographics of the neighborhood matter as to who your possible buyer might be. Like a marriage you need to find the suitor. Filipino, South Asian are 28% of the neighborhood. You need to advertise in those languages with faces that feel like friends to those demographics. Your agent did zero social media marketing and did not do a broker preview which is the standard for that area WITH FOOD. Also so few photographs in the MLS - why? oh why? super small description which drives the searches.

    Go back to the agent: I want a video that shows. I want 44 photos. Tone down the brassy colors. I want 22 social media posts from local people dancing or talking about the house and cooking and enjoying this house in their native languages. I will reduce to X in exchange for these. Then you and all your friends start sharing what he creates or find a new agent.  Be clear, exact, and follow up with email of what you want and that you want this completed by 12/21. 

  • Member since 2023 · 25 posts · 15 votes
    2y

    Thanks for the specifics @Caroline Gerardo!

    - I didn’t understand what you meant at first, that local community should be IN the pictures.  Ok.  (this community is mostly Hispanic.) 
    - we had 42 pics posted for the first 30 days and a longer description.  We were separately advised by other agents to have fewer pictures, and a shorter description :)) so we adjusted both.   it didn’t make a difference.  
    - there were two broker preview open houses - but not with food.  Good to know!! 
    - agreed on social media. 

    Thanks!  


  • Member since 2020 · 12 posts · 3 votes
    2y

    @Lor Fara my thoughts is airbnb it while you wait for the values to increase or offset the loss through the cash flow.

  • Rental Property Investor · Albany, NY · Member since 2016 · 17 posts · 6 votes
    2y
    Quote from @Lor Fara:

    It looks like the comp is a multi-family and yours is a single family. Although your house looks nicer the possibility of being able to rent out the other unit and help with thr mortgage would make that property more attractive. Plus it’s cheaper than your house. So it makes sense to me why that one would go faster. 

  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    2y

    Social media posts can have personality but the MLS should not have demographics. I can't image a Realtor who told you to have less photos and less information unless the images were poor or wording off. The more information the more reach for SEO.

  • Real Estate Agent · Henderson, NV · Member since 2011 · 1k+ posts · 550 votes
    2y

    Interest rates took a big dip over the past few days.  I don't think taking the house off the market until spring makes sense.  I'm assuming your area has low inventory like much of the US.  If that's the case, you have less competition now and a bunch of buyers just got a bump in what they qualify for.  Still it does sound like to you need a price adjustment.  

  • Real Estate Agent · Riverside, CA · Member since 2019 · 53 posts · 23 votes
    2y

    I think the price reduction approach would be best if you are not looking to keep it for another two or three months. There is always a buyer for every home...remember that! Patience plays a big part here. Perhaps you should review how the pictures look (did you get professional photographer, drone, video, matter port), have you staged the property? Also, how much are you offering for a commission to a buyer's agent? Those are variables, which if executed well; will help you get the house sold. In our personal experience properties have taken us anywhere between 3 to 4 weeks to sell at a premium price on this current market. We buy, renovate, list and flip properties and Los Angeles areas as well as the Inland Empire: San Bernardino and Riverside counties and we have noticed the inventory priced at top of the market takes a longer to sell 3-5 weeks longer. You will sell it. Send me the address if you want me to give you an honest opinion about the listing aesthetics, description and pricing point. Good luck!!

  • Member since 2023 · 1 post · 1 vote
    2y

    Offering seller assistance always sells faster than normal, always highlight that! advise to relist and highlight you will get more interested buyers and have at least 4 open houses with staging helps too.

  • Member since 2022 · 2 posts · 1 vote
    2y

    The pictures look great! I believe the neighborhood and surrounding area was discussed earlier in the thread, but just dropped the address in a crime map and there were 2 shootings on 12/15 down the street from your property. You could reach out to local organizations/hospitals to try renting midterm (corporate employees have less incentive to squat and refuse to leave). 

  • Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Lor Fara:

    I’ve finished my first flip in October in Richmond CA.  A single family, 3 beds, 2 baths, huge yard.  The house turned out great after renovations.  It’s listed at $650k based on comps.   It didn’t sell in 40 days though.  
    My agent says it a combination of the time of year, rates and city reputation in general.  Although this neighborhood is very safe with nice neighbors, buyers and even brokers say there’s a “stigma” associated with the town.  

    All that being said, a much less nice house with the same parameters a few blocks up sold in two weeks for the same price.   

    In any case the question is what should I do now: 

    - delist it and relist in March (what my agent proposes) - on the basis that more people buy in the Spring.   Is this true in CA where the  weather doesn’t change?  I’m not crazy about the idea of paying mortgage for another 2-3 months.  I’d have to refinance asap in this scenario (more costs).  

    - reduce the price a bit ($10k) and still try to sell it now.  I don’t know what else we could do.  It’s priced pretty much at my cost.  

    Thanks! 


     dont reduce the price, list again February 16. Don't even late one day LOL

    you may surprise

  • Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Lor Fara:

    I’ve finished my first flip in October in Richmond CA.  A single family, 3 beds, 2 baths, huge yard.  The house turned out great after renovations.  It’s listed at $650k based on comps.   It didn’t sell in 40 days though.  
    My agent says it a combination of the time of year, rates and city reputation in general.  Although this neighborhood is very safe with nice neighbors, buyers and even brokers say there’s a “stigma” associated with the town.  

    All that being said, a much less nice house with the same parameters a few blocks up sold in two weeks for the same price.   

    In any case the question is what should I do now: 

    - delist it and relist in March (what my agent proposes) - on the basis that more people buy in the Spring.   Is this true in CA where the  weather doesn’t change?  I’m not crazy about the idea of paying mortgage for another 2-3 months.  I’d have to refinance asap in this scenario (more costs).  

    - reduce the price a bit ($10k) and still try to sell it now.  I don’t know what else we could do.  It’s priced pretty much at my cost.  

    Thanks! 


    is your realtor a specialist in richmond ? everyone knows about richmond from long long time ago, in my experience, you really need to good have realtor selling in lousy zip code. There're some realtors that also work/live in the area, you want to go with them.

  • Robert PaynePro Member
    Real Estate Agent · Bowling Green, KY · Member since 2023 · 36 posts · 36 votes
    2y

    I will start by agreeing with a lot of what has already been said. I don't have MLS access there but just looking at sales on Zillow in the neighborhhood, you are probably overpriced.

    I finished a Flip in March and it didn't sell before rates started to climb. We made some mistakes on that one and we went back and addressed them, but by the time we re-listed it was August. There are certainly seasons that are better for selling, and fall and winter are not that. So I furnished the house and put it on AirBNB so that I could stop bleeding capital to the loan payments. I intend to re-list in January. The benefit of the STR route is that you can continue to have it listed and schedule showings around guest bookings.

    I would consider getting an opinion of value from another local Realtor as well. It is not ok for a Realtor to approach you to earn your business because you are in contract for listing with a realtor already, but you are allowed to initiate contact with other realtors if you want.

  • Member since 2019 · 7k+ posts · 4k+ votes
    2y

    the PPSF in this zip code is $495 but listing is at $580. 

  • Member since 2023 · 40 posts · 44 votes
    2y

    If I'm a buyer, I'm wondering where the $130k difference from 6 weeks ago went. Your write-up is not very good, imo. Highlight what you've done to the house since purchasing it. It's "like" a close community? Like, but not it. Also, if I was buying, I'd feel that I might end up an "outsider." "Might" allow you to build an ADU. How much time would it take to head down to the permitting office and find out if they indeed could build an ADU? "Might" seems like you know they probably wouldn't, but want to CYA. "...will be..." a perfect commuter home. No, it IS a perfect commuter home situated close to [Bart/ferry] within easy commute to [which counties are your best chance to market?]

    Zillow allows you a lot of space for description.  You used almost none.  Okay, new appliances.  What else? Where did the money go?  The photos are good, but why none of bathroom #2?  The drone shot is good, but what's up with the back half of the garage roof?  Leaks?  That's a low-maintenance yard for lower water bills, it's near a park and elementary school [how are the school's ratings?].  I think whomever wrote up your description did a very amateurish job.  

  • Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes
    2y
    Quote from @Lor Fara:

    I’ve finished my first flip in October in Richmond CA.  A single family, 3 beds, 2 baths, huge yard.  The house turned out great after renovations.  It’s listed at $650k based on comps.   It didn’t sell in 40 days though.  
    My agent says it a combination of the time of year, rates and city reputation in general.  Although this neighborhood is very safe with nice neighbors, buyers and even brokers say there’s a “stigma” associated with the town.  

    All that being said, a much less nice house with the same parameters a few blocks up sold in two weeks for the same price.   

    In any case the question is what should I do now: 

    - delist it and relist in March (what my agent proposes) - on the basis that more people buy in the Spring.   Is this true in CA where the  weather doesn’t change?  I’m not crazy about the idea of paying mortgage for another 2-3 months.  I’d have to refinance asap in this scenario (more costs).  

    - reduce the price a bit ($10k) and still try to sell it now.  I don’t know what else we could do.  It’s priced pretty much at my cost.  

    Thanks! 

    I grew up in Richmond, so I am coming with the perspective of knowing the area, and knowing people who still live near this house.

    A lot has been said, but unless I missed it I didn’t see anything about what the numbers were like at your open houses. The place is clearly nice (good job on your first one), people like to see nice things, especially in areas like that, people will go to see it even if they know they can’t afford it, somehow hoping they will be able to the next day. Real estate agents would call people that fit in a category of viewing but not intentionally about purchasing - lookly Loos. However you want them coming through your door in this case because that drives up demand, when done correctly. If people didn’t flood your initial open houses, your list price is too high, that’s basically the only true deterrent for the people that would live in that community.

    It was kind of mentioned, but making sure it’s clear. Your target demographic is a working class family that afford this home and does not care about good school ratings. (My mother pushed, so I was lucky to go to the best public high school in the area, since I said grew up in the city 😉). 

    Even without knowing the numbers of your open house traffic, there are other houses listed near your list price. Some new to and some that have been on for awhile, this is likely another sign your list price is too high.

    The challenge is you have been on the market for awhile, so even dropping the price now might not guarantee you this close to break even price you are looking for. A positive the interest rates have been trending down which will drive more buyers to the market and hopefully help you out.

    So you can pull it and start at a lower list price.

    Or keep it on the market, lower the list price and get more aggressive with your marketing. Here’s where the Richmond in me comes out. Have two more open houses, do all the social media things @Caroline Gerardo mentioned, plus - One event on Tuesday, Taco Tuesday to be exact after work hours. Then make sure to have food at the other open house too. Have a DJ and raffle off a pair of Jordan’s, That would = community in that area.

    Good luck and keep us posted.


  • Member since 2023 · 25 posts · 15 votes
    2y

    Hi everyone, happy to report that we got a good offer this week which I accepted.   Then someone else was interested to put in a back up offer the next day.  Phew! Hopefully no surprises from here on.  

    Thanks again for all the feedback - this community is amazing and fantastic.  I’ll be sure to ask questions much earlier on on my next deal to avoid mistakes!  

  • Member since 2019 · 7k+ posts · 4k+ votes
    2y

    wow, another bid over the asking price :)

    congrats to you ! happy for you !

  • Member since 2023 · 25 posts · 15 votes
    2y

    @Carlos Ptriawan I didn’t say it was over asking price,  I said it was a good offer.  :) 

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