House In Kansas City Missouri

Buying & Selling Real Estate
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House In Kansas City Missouri

Itay Heled
Toronto, Ontario · Member since 2014 · 95 posts · 23 votes

Dear Bigger Pocket members!

would love to get your feedback and suggestions regarding a house I am trying to sell unsuccessfully  since October 2015 in Harrison street Kansas City Missouri.

here is a  brief summery..

I purchase the house On May 8, 2015 for a flip. A local real estate agent "sell" it to me as a great opportunity in an "up and coming area". turn out to be a horrible deal. ARV he stated was

inflated ,house was over priced , in a much worse condition than reported & in a problematic location (including a next door neighbor with a yard that is a complete junk ,hence  scares away a lot of potential buyers before they even enter the house. ) 

just to add more to the fun, this great  real estate agent and contractor defrauded me and use  rehab funds I sent for other projects.. the ultimate flip nightmare... 

Anyway, now I am in a control damage state, trying to minimize the damage and loss.

 I  invest a lot into the rehab - new floors, new windows new kitchen  with stainless steels appliances- new bath,  full rehab. 

On  February, after very little interest and  limited  number of showing I replace the  listing agent and  hire Reece Nichols agent to list it.  their marketing was pretty effective and I got about 20 showing in two weeks. but still  no offers. last week,  I reduce the price by $5000 and offer a bonus to buyer agent.  still no offers.. 

My question is this: 

Other than reducing the price even more, is there anything else I can do to promote and close this deal? 

Thanks so much for reading this , and would love to get your advise.  

To get a better sense  of the house you can look at the listing in  link below:

http://tracyksearles.reecenichols.com/homes-for-sa...

MLS# 1976950

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  • Brandon Holley
    Lenexa, KS · Member since 2015 · 206 posts · 53 votes
    10y

    My .02 You're at the absolute ceiling of your properties price point. If you drop into the low 150's it'll sell eventually. If you set it 149 it'll sell extremely quickly. I don't know if your cash position will allow that though. You're also heading into the prime selling months, so depending on your cash position, you may have time on your side. 

    0Reply
  • Marko Cvetkovic
    Developer · Kansas City, KS · Member since 2015 · 84 posts · 9 votes
    10y

    I agree with Brandon.

    0Reply
  • Dustin Beam
    Kansas City, MO · Member since 2015 · 609 posts · 321 votes
    10y

    I love those old KC homes. You really have to be careful about the neighborhoods though. They can change quickly in the city. I was actually thinking about moving down there...and my general rule of thumb was to stay west of Troost. Harrison is, but is close. Some areas seem to be gentrifying. 

    I can't really help you with your sale, but just some friendly advice to keep in mind if you do this again in the area.

    0Reply
  • Julie Macd
    Investor · Seattle, WA · Member since 2015 · 71 posts · 60 votes
    10y

    You may need to need to balance your carrying cost versus the lower sales price.  Which is more important, your ego to not lose money or pay more each money in the hopes of getting a bit more.

    Is it rented? or how much is it costing per month not sold?

    The most important thing sometimes is to cut your losses, learn your lessons and move on.

    Just from your description, you did not perform adequate independent due diligence on the purchase and relied on the agent. 

    0Reply
  • Itay Heled
    OP
    Toronto, Ontario · Member since 2014 · 95 posts · 23 votes
    10y

    Thanks Brandon  that is very helpful

    0Reply
  • Itay Heled
    OP
    Toronto, Ontario · Member since 2014 · 95 posts · 23 votes
    10y

    Julie,

    thanks for your feedback . house is not rented. I pay carrying costs out of pocket 

    0Reply
  • Donovan Castaneda
    Kansas City, MO · Member since 2015 · 66 posts · 9 votes
    10y

    I think if you put a fence you will cater to the buying or rental market, yes is a expense however it would help you asking it and minimize you holding cost and that money in your pocket, 

    0Reply
  • Billy Smith
    Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
    10y

    I buy first the location then the home .

    0Reply
  • John Ching
    Investor · Gilbert, AZ · Member since 2015 · 145 posts · 48 votes
    10y

    Hi Italy,

    I found great interest in your post because, like many flippers, we all feel your pain when things don't go as planned. But judging from the pics, you did a great job on the rehab.

    Since I don't reside in KC, I can't say for sure why the home isn't selling. But with 20 showings and no offers, I think you need to have a heart-to-heart talk with your RE agent about what it's going to take to sell your home. I think the BP'ers here that know the KC market have offered up that the price might need to be adjusted accordingly.

    Are you in a position to owner-finance the property? Take a page from Ron LeGrand's book and go after the (much) bigger market - buyers that cannot qualify for traditional home loans. In a large market like Kansas City, you could have a blow out campaign with, "Lease To Own" and, "No Bank Qualifying Home For Sale" signage at your next open house.

    For marketing, go REALLY big and put an insert in your next Sunday paper advertising your home for sale. It's a fairly expensive proposition, but you could divide up slots on the reverse side of your insert and sell the spaces to other RE agents, mortgage lenders, appraisers, etc.

    Good luck and keep us posted on your progress.

    0Reply
  • Itay Heled
    OP
    Toronto, Ontario · Member since 2014 · 95 posts · 23 votes
    10y

    John,

    Thanks for your message, yes it is not a bad idea to look into this. I have about 50k of private money invested in the property but it is free of mortgage . I have been doing rent to own here in Canada So I know the benefits and the risks but  not sure about the protocols, legal  and costs involved.

    However , there are few big disadvantage:

    1 I was hoping to use the funds for future  investments

    2 it is an old house  and  I am not around. which means  I often pay more for repairs  and unfortunately some contractors taking advantage of you when you are an out of town investor. sad but true. of course I can always  use property management but of course this is an extra cost.

    but thanks for raising those options, I guess  Ill have to see how low i need to go with the price first and then re evaluate renting /rent to own /owner financing

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  • Melissa Gittens
    Real Estate Broker · Windsor, CT · Member since 2015 · 1k+ posts · 268 votes
    10y

    I Agree with Brandon. I would drop it by 5,000 in the next few weeks if it doesnt sell at the current price. That will put you into a different buyer population. 

    0Reply
  • Itay Heled
    OP
    Toronto, Ontario · Member since 2014 · 95 posts · 23 votes
    10y

    Hi Melissa,

    yes I reduced the price to 155k few days ago

    0Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    10y

    Agreed with Julie and Brandon. Drop the price and sell. There is a time/money cost that you are not considering. If you want to be out - be out. Have you considered renting it and holding?

    0Reply
  • Itay Heled
    OP
    Toronto, Ontario · Member since 2014 · 95 posts · 23 votes
    10y

    Dan,

    Yes, renting is always an option but last resort in my case:

    As a Canadian refinancing of the property is limited - best case scenario I can get 65% LTV with pretty high rate. this means a lot of my money will be "buried" in the property. my understanding rent I can get is around $1100/1200 so not so great in terms of cash flow. add the fact I am far away which means extra costs in property management and often repairs of such old house will be higher. so bottom line selling still seems the best option unless price I can get really sucks.

    1Reply
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