I recently completed my first flip! It was a rough process to say the least and it went over schedule and over budget. The house is on the market right now and it's getting a ton of attention. It has over 2,000 views and almost 100 saves on zillow. Its been toured by realtors almost 20 times but this has still yet to materialize into a (reasonable) offer. I did, admittedly, have it priced a little high in the beginning but have since brought it down 10k and now it's right on par with the rest of the comps.
The area is a little bit rough in terms of demographics and I was told that this was going to have an effect on how fast it sells but I didn't think it would take this long. I listed it about 45 days ago - average DOM is about 40 days. I got the price to a 'reasonable' price tag last week hoping that it would spark some offers. No avail.
Last twist, I got an offer from someone with a poor credit score. He told me his credit was around 515 and he was interested in rent-to-own. I'm not too familiar with this for a flip, but my hard money loan comes due in about 5 months
The question: I'm bleeding money on this flip with my monthly hard money interest payment. The margin is getting pretty tight the lower I get. I'm getting nervous to say the least. I'm not sure if I'm just being impatient and the BP community can tell me to wait out the storm if I am. Or if I should legitimately consider this rent-to-own proposal I received. I don't really want to hold on to this house any longer than I have to. Last option is to reallllyyy squeeze my margin and drop the price to where I'm just above my break-even point.
I would pass on rent to own and look for another buyer. In 5 months your still in the same boat on hard money due. If you want to flip this thing drop the price a little more and move on. You have time on the hard money balloon due so its time to move it. Its going to take 30-60 days to close so its time to move on this before the balloon is due
Thanks for the response Tim. I really appreciate your input
@Ryan Johnston I agree, drop the price and it will sell.
@Ryan Johnston also be conservative on your ARV when you are buying. It's easy to be overly optimistic when your buying. Then reality sets In...