House is not selling, Advise Please!

House is not selling, Advise Please!

Flipper · Boston, MA · Member since 2010 · 9 posts · 1 vote

Hi,

Hope you are all doing well. I am posting on this forum for advise on marketing / selling a current real estate deal.

My partner and I recently bought a fix and flip property in Dallas, TX. We purchased it as out of state buyers as we are both in Mass. We financed the purchase and rehab with hardmoney as well as a descent capital investment ($60K). We managed the rehab remotely, which took a bit longer than anticipated but overall not too bad.

Unfortunately, the advice that we received on the area, ARV, and marketing / resale time from the wholesaler, realtor, lender, and appraiser was over zealous. So now we are paying a hard money loan on property that is not selling with a price that is much lower than the original ARV we were quoted (which we vetted several times via multiple appraisals).

We have hired a top realtor in the are who is marketing the property and doing between 4 to 6 shouwings per week over the past three weeks. We have also advertised the property on CL for rent and as a sale with owner finance. But the response has not been great.

Any other advise for selling a property super quick, short of continuing to lower the price?

Thanks in advance.

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Jerry PuckettPro Member
Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
14y

Juan Difot
Ok, just a few thoughts...
1) there is a lot of competition with 9 other active houses to compete with within a quarter mile.

2) Yours is not the prettiest house. Hard to tell from pictures yes, but your competition did not skimp on finishes in baths or kitchen.

3) Average days on market (for solds) is 100, you have been listed for 25. You may have overlooked this metric before. Your competitors have been on market for an average of 43 days ( with the lowest priced at 105 days)

4) If you really narrow down your appraisal to using nothing but sold comps within a quarter mile and no more than 6 months back, you're right on target with your ARV. However, if you eliminate the two 800sqft houses (remember, in this area the value is in the land) that are skewing the $ per sq/ft, you come to an ARV of $235,000.

Your listing does not say Owner finance Available. Put that in and you may get overwhelmed with offers. I always do.

See this reply in the discussion

39 Replies

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  • Real Estate Investor · Saint Louis, MO · Member since 2012 · 113 posts · 12 votes
    14y

    Maybe get ahold of the people that hes has shown the property to. !. this will tell you if he in fact has showed it as much as he says and 2. you cant ask them what they like and dont like about the property. Hopefully the realtor isnt pulling yopur chain in hopes of eventually stealing it from you..

  • Real Estate Investor · Saint Louis, MO · Member since 2012 · 113 posts · 12 votes
    14y

    sorry that is can* not 2. you cant..

  • Developer · Houston, TX · Member since 2008 · 488 posts · 121 votes
    14y

    What is your list price vs. comparable list price?

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y

    If you've had about 15 viewings over the last few weeks with no offers, something's amiss. What feedback are you getting from these showings? Your agent?

    Location, condition, price, and exposure. Where is the problem?

    Can you post a link to the listing so we can evaluate?

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y

    Juan Difot
    Yes Juan, a listing, an address...any solid piece of info and I'm happy to nose around. If you could give the names of those involved also, might help us who are active here to avoid some pitfalls.

  • Flipper · Boston, MA · Member since 2010 · 9 posts · 1 vote
    14y

    Hi All,

    Thanks for your replies so far. Here go answers to your questions:

    @Jeremy Namen - With regards to getting ahold of the people that come to a showing, I wouldn't know how to contact these folks. I am in Mass and all of these showings are handled by the realtor. However, I have asked the realtor for feedback on the showings and he said that the prospetive buyers have good things to say but they are not thrilled about the master bed, which is a step down (About 5 stairs down from main level. This was an addition in the rear of the house). They also say that the house is close to E. Grand Ave, which appears to be a busy / dicy street. Having said that, the house is located in Lakewood on La Vista Drive, which has a really good school system. Also, from what I understand, the other end of the avenue cuts through a ritzy area of town.

    @Carlos F. - Feel free to PM me for contact info. Any help would be appreciated.

    @Danny Day - The appraisals have all come in over $270k. The house is currently listed at $241.5k. Per the realtor and his CMA, the comparable list price is apparently $240k to $250k.

    @John Klaus - Please see my response to Jeremy. I answer most of your questions there. The house is completely rehabbed, the price is well below appraisal, and it looks like there are a good amount of showings / exposure. Not sure what the issue is?

    Here is the link to the property:

    http://www.trulia.com/property/1688183-7319-La-Vista-Dr-Dallas-TX-75214

    Thanks again for your help on this.

    Juan

  • FL · Member since 2009 · 2k+ posts · 357 votes
    14y

    Juan Difot:

    Linked for you:
    http://www.trulia.com/property/1688183-7319-La-Vista-Dr-Dallas-TX-75214

    Raymond

  • Real Estate Investor · Saint Louis, MO · Member since 2012 · 113 posts · 12 votes
    14y

    You are in another state trusting that your agent is doing what he says he is- Id creative on how he can involve you more- If its just a design issue there should be solutions to that. Dont take this wrong way, but you didnt let distance be an issue in purchase dont let it be an issue in involvement..

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y

    Juan Difot
    Ok, just a few thoughts...
    1) there is a lot of competition with 9 other active houses to compete with within a quarter mile.

    2) Yours is not the prettiest house. Hard to tell from pictures yes, but your competition did not skimp on finishes in baths or kitchen.

    3) Average days on market (for solds) is 100, you have been listed for 25. You may have overlooked this metric before. Your competitors have been on market for an average of 43 days ( with the lowest priced at 105 days)

    4) If you really narrow down your appraisal to using nothing but sold comps within a quarter mile and no more than 6 months back, you're right on target with your ARV. However, if you eliminate the two 800sqft houses (remember, in this area the value is in the land) that are skewing the $ per sq/ft, you come to an ARV of $235,000.

    Your listing does not say Owner finance Available. Put that in and you may get overwhelmed with offers. I always do.

  • Developer · Houston, TX · Member since 2008 · 488 posts · 121 votes
    14y

    Sounds to me like you're chasing the market down. I would have listed lower than the original list price. Bite the bullet and drop the price and let the market chase you. If the avg DOM in the area is really 100, you need to be at or around $230-$235k if your realtor CMA is correct at $240-250k.

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y
    Originally posted by Danny Day:
    Sounds to me like you're chasing the market down. I would have listed lower than the original list price. Bite the bullet and drop the price and let the market chase you. If the avg DOM in the area is really 100, you need to be at or around $230-$235k if your realtor CMA is correct at $240-250k.

    Absolutely agree. I guarantee your Realtor included properties he shouldn't. Your CMA is more accurately 235k, and that puts Danny right on the mark.

  • Contractor · Cornelius, NC · Member since 2011 · 123 posts · 89 votes
    14y

    It has always been beneficial for us to stage the homes and then get the pictures. If they are coming in and touring the home then the price isn't too far off, but the home isn't living up to it. Staging can overcome a great deal and will help you sell faster.

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y
    Originally posted by Brent Zande:
    ... Staging can overcome a great deal and will help you sell faster.

    From looking at the pictures, staging has been done.

    What's with the kitchen ceiling? Is that a tile ceiling I'm seeing?

    The kitchen lighting isn't looking abundant.

    Is there a reason that the ceiling fan in the office is so off-center to the room?

    The master is carpeted - do the buyers want to see some other type of flooring there?

    Is it common around those parts to have a doorway from the master to the outside? Is there another door that can be used to get outside other than going through the master?

  • Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    14y

    Jerry - looks like it has been out there more than 25 days. The previous listing expired. Did you catch the pre-rehab buyers agent. NWA, one of you're favorites, I believe ;-)

    Juan - To add to what Jerry said, you paid around a $1 more per square in 2011 than it sold for in 2005. It had been on the market for nearly a year and your "wholesaler" got it for a whopping 7% less than list...then sold it to you on a double close. That's retail. You can't buy retail, drop $60k in rehab, have sub-par finishes for the area, and sell it at ARV. First step is have the realtor add something about owner finance. I'll PM you to tell you about your wholesaler.

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y
    Originally posted by Carlos F.:
    Jerry - did you catch the pre-rehab buyers agent. NWA, one of you're favorites, I believe ;-)

    Good catch, I had suspected them from the get go, but didn't dig deep enough to find.

    A little more than an inside joke with Carlos and me. I'm sorry, it just must be said... New Western Acquisitions here in the Metroplex has a reputation for burning uninformed Investors. I know 3 individuals personally that got the short end of the stick from them.

    You are right on the money with your assessment Carlos.

  • Wholesaler · Dallas, TX · Member since 2011 · 294 posts · 152 votes
    14y

    Jerry and Carlos are correct about your seller.

    I browsed your listing and I personally think that your kitchen is killing your deal. The cabinets look a little cheap and I'm not sure what's going on with te ceiling. Buyers in that area are prepared to pay top dollar for a house but they expect a high quality product. You may want to drop your price or consider upgraded some of your more prominent finishes (cabinets, flooring, etc). I willing to bet lowering the price makes more financial sense once you consider time and money.

  • Flipper · Boston, MA · Member since 2010 · 9 posts · 1 vote
    14y

    Thank you all for your insights. The information you provided is going to help my partner and I tremendously in formulating the next step on this deal.

    Additional comments / ideas are welcomed.

    P.S. I think it goes without say that New Western Acquisitions in Dallas, TX is permanently on my 'Crap List' permanently.

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    If you've had that many showings without an offer the answer is simple. Its overpriced. What you would like to get or what you need to get to avoid a loss is absolutely irrelevant. If you want this property gone you need to drop the price. Do a significant drop all at once and be done with it.

    Have you actually been there? You say you bought it remotely, managed the rehab remotely, and are relying on your local agent to deal with the sale. Frankly I can't imagine a more insane thing to do than to try to do a fix and flip remotely. Rentals, perhaps, but even that takes a lot of leg work on the ground. If you're not actually been there then my advice is to get on a plane and go have a look.

  • Real Estate Investor · San Antonio, TX · Member since 2011 · 44 posts · 6 votes
    14y

    what is the link to craigslist?

    i listed 4 properties in the last 3 weeks and have all sold with owner finance/contract for deed.

    what is the deal with these "wholesaling-double-closing" hacks? all the deals NWA & NWR send me have the comps so freaking high!

  • Flipper · Boston, MA · Member since 2010 · 9 posts · 1 vote
    14y

    Link on CL: https://post.craigslist.org/manage/2764956515

  • Real Estate Investor · Bellingham, WA · Member since 2008 · 407 posts · 90 votes
    14y

    I would agree with Jon. Cut the price get rid of it and treat this as a learning experience.

  • Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
    14y

    There are a lot of people that want that neighborhood and have money to put down but don't qualify for one reason or another. I spoke with Juan. He is in a position to offer owner financing. I won't go into the details, but doing so will preserve the overwhelming majority of the capital he injected into this deal. We also came up with a way for him to do a rate and term refi in the process if a buyer is found. Taking the loss now remains on the table, but plan A makes more sense if it can be pulled off quickly (at least in this particular deal).

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    14y
    Originally posted by Carlos F.:
    There are a lot of people that want that neighborhood and have money to put down but don't qualify for one reason or another.

    Great follow up Carlos! Hope you're able to find that buyer quickly. Will the house stay listed while this gets worked out? I know that's an area you work, but let me know if you guys need any "boots on the ground" type stuff done.

    I've just got to say I really love my town. Such a great group of investors in the Metroplex. For every rotten apple like New Western, there are at least 2 with high integrity like Carlos, Stinson or Jon Klaus just to name a few.

    Put another way to the OP and all of BP nation: If you live elsewhere and want to do a DFW deal, find or make some solid BP colleagues to help you out. We're friendly as a box of kittens on Christmas morning!

  • Indianapolis, IN · Member since 2008 · 244 posts · 36 votes
    14y

    Offer LCD TV, free appliances or down payment assitance at closing. Have your agent do email blast to the other agents in the area.

  • Richardson, TX · Member since 2012 · 1 post · 0 votes
    14y

    Hey everyone, wanted to give some feedback as well from another investor in Dallas. I did 2 deals with NWA and 1 deal I made money and 1 deal I lost $2,000. The deal I lost money on was the first deal I bought with NWA and the first house I flipped. You really have to do your own due diligence on each house they send or any wholesaler deals. I bought 2 other houses at the same time after learning the process and I did great overall. I think the key element is knowledge, make sure you know the ARV, check and doublecheck the sold comps and walk the house yourself. I would love to get in touch with other investors in the area and see their results! Happy Hunting

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