Finished Flip, No Traffic - Now What?

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Finished Flip, No Traffic - Now What?

Andrew Taylor
Contractor · Magnolia, TX · Member since 2016 · 279 posts · 155 votes

My wife and I just finished our first flip. We put the house on the market about a month ago and have had almost zero traffic (two showings). Empirically, I know this means it's overpriced, despite an initial listing price that I *thought* was under the market, and two price drops since then.

We've also listed the house for lease but aren't getting any bites there either. Again, I think I've got it listed at or below market rent rates but so far, crickets. The house is in a good area, has been tastefully updated, never flooded, has a pool and sits on a corner lot.

I thought the house was probably worth $515k, but we initially listed at $499k to capture the "below $500k" searchers. Dropped the price to $489k after about two weeks, then stopped again to $479k after two more weeks. I can drop it as low as about $460k before I'm in danger of losing any money on the deal (I've got somewhere between $120k-$170k of equity, depending on actual selling price).

My question is, what now? Should I try to refinance into long-term and lease it out until the market improves? Drop the price again? Wait it out while I continue to make $3k/mo in interest payments? Some other option I'm not seeing? Obviously I'd rather not lose any of my cash investment, because losing sucks and also I don't want the wife to rescind her blessing with respect to my investing - but I also don't want to cut off my nose to spite my face. I'd rather lose a few thousand dollars and chalk it up to a learning experience than lose all of my investment and not be able to try again.

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Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
6y

A few thoughts (hopefully helpful but no guarantee): 

Photos: not bad at all but I would rearrange and use a photo of the kitchen as the first or second photo. Also it might help to do some staging and reshoot photos as some of the spaces are large and empty looking (especially the giant open entrance/living area in photo #2, not a good photo to start off with, to me it looks odd without furniture and decor). Aerial/drone photos are hot these days too, you might splurge for one of those. 

Timing: Not sure if it's as critical in Houston, TX as here in CO but one thing to consider is flips of SFH's should be timed so they are listed in the spring (June ideally). Not helpful now I know but something to consider for your next flip, and again this may be different in Houston.

No fridge or W/D? Probably a negative for most home buyers. 

No cabinet hardware? Again probably a negative, looks unfinished IMO. Some buyers may like being able to choose their own, and I assume that is your thought process but even then they can replace whatever is there if they want. Some simple drawer pulls and cabinet door knobs would make it look finished and move-in ready IMO. Or maybe they're the "invisible" kind of slides where you push it in and it springs open on its own?

Flooring on the bar: Looks odd to me, I would take that off and replace with some vertical weathered barn wood, painted wood as an accent, wainscoting or anything different than the flooring material. Also staging with bar stools would make it look more inviting. 

Pricing: can't comment on the pricepoint as I don't know your market but your lack of interest answers that question unfortunately. Also multiple $10k price drops are not as effective as a single, larger price drop. You may consider taking it off the market, renting it for the winter on a 6 month lease, then listing it in the spring for just a little under $500k to begin with and if it doesn't get attention after 30 days, do one big price drop of at least $25k instead of multiple smaller price drops. Asking your agent to host an open house just for agents in order to get feedback from other local professionals may be a good idea as well (if you haven't already of course). You may try a new agent in the spring just to try a different approach, sounds like the working relationship with current agent is less than perfect and she had her chance to sell it already. 

Overall very tastefully done, nice work all around and I especially like the bathrooms. The pool looks very clean and inviting but your agent is correct that not everyone wants to maintain a pool so that will limit your buyer's pool (forgive the pun). Unfortunately you may have made this place too nice for the market, that might be the underlying problem, or it could just be timing and you may sell it quickly in the spring. I've only done one flip before so I'm far from an expert, also don't know your market just FYI. Good job on the classy-looking remodel and good luck selling!

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  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    If it were me, i would get this place staged, put appliances in, do new pics, change realtors and lower the price   It just does not look appealing. It looks cold and non inviting.  Furniture will really help!

    2Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y

    Maybe for your next one...make sure the market isn't already saturated w8th your product.  Sorry just sayin.  

    I sell my retailed rentals FSBO at the comp price net of commissions and put it on Zillow. Buyers these days are looking online on their own anyway.

    If straight FSBO doesnt work a few weeks in (but always has) I would consider a flat fee listing. Sounds like you're getting that level of non service from your LA anyway.

    Net of commissions, you should be at an attractive price.  That will peak interest and get some showings.

    Of course at this pricepoint most buyers have agents.  In my ad I state they just need to add their agents fee to their offer or they can capture that equity. A la carte and zero back and forth price negotiations in my experience.  People like the no haggle pricing I have found and you'll stand out.

    For this one, warm it up with color splashes, virtual staging and a fridge for cripes sake.  Trying to save $1200 (gently used) while dropping the price tens of thousands? 

    The house does look awesome so well done.  Tweak a bit and keep us postedđź‘Ť

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    Re:virtual staging - please don’t at that price point it will just turn folks away. This is a nice house - do it justice and just get it staged. 

    1Reply
  • Marian Smith
    Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
    6y
    @Andrew Taylor Sometimes things pick up now as people wind down towards the holidays. Fresh orange flowers in kitchen, in bathrooms maybe lime green towels or white towels and a bowl of lime green soap and candles? Enliven the gray? Fresh stain on pool fence and string lights for an evening photo? How about the view from the large living room window? Can you get a good dusk photo and use it as the primary...get buyers to imagine hosting a holiday gathering with a lit up pool as a backdrop out the picture window? You’ve got to love a pool in Houston.
    0Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    6y

    @Andrew Taylor sounds like you overpaid,  remember you make your money when you buy.... Try, biding starts at 435k, gives people the impression its a distressed prop . Those willing to pay, 435k will pay 450, who knows maybe you will get a bidding war, 

    Good Luck 

    0Reply
  • Alexander M Stanton
    Rental Property Investor · Worcester MA · Member since 2019 · 46 posts · 18 votes
    6y

    @Andrew Taylor

    With 120k+ of equity it sounds like you’re still doing really well!

    I would think about creative rental strategies such as month-to-month via AirBnB/VRBO and ask yourself whether there are other platforms you can advertise on. Could you offer to rent it furnished? What amenities is it near to attract a specific subset of renters?

    If that’s a high price listing in your area and you’d rather sell then you probably need to drop it more. What’s your minimum acceptable offer? Sounds like you need to creep down towards that a little more.

    ALSO- are you working with a good realtor? I’ve heard time and again that that’s critical. Evaluate your options and consider switching. See who has the most robust website and is actually making the most sales in your area.

    0Reply
  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    6y

    I'll admit that I did not read all the responses but I suggest getting a new realtor who will advertise the place, hold open houses, etc. 

    Podcast Guest on Show #373
    0Reply
  • Steve Richardson
    Specialist · Indianapolis, IN · Member since 2018 · 31 posts · 20 votes
    6y

    @Steve K. I’m glad I read your comment before I started typing my “essay.” What you wrote is almost verbatim to what I was going to type :)

    1Reply
  • Victor S.
    WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    fully-staged house across from you with comparable sq. ft sold for $425k ($153/sq.ft): 

    https://www.redfin.com/TX/Houston/10734-Lynbrook-Dr-77042/home/30193322

    staged larger home sitting South of you: 

    https://www.redfin.com/TX/Houston/10718-Cedar-Creek-Dr-77042/home/30185566

    lots of homes north of you sold for close to what you're asking, but were also staged and listed earlier in the season. this one went for about $150-ish a sq. ft as well: 

    https://www.redfin.com/TX/Houston/10822-Holly-Springs-Dr-77042/home/30274278

    4Reply
  • Andrew Taylor
    OP
    Contractor · Magnolia, TX · Member since 2016 · 279 posts · 155 votes
    6y

    Thank you all for your thoughtful input. I'll address a few issues, in no particular order.

    I can't really fire the listing agent. I've signed a 180-day listing agreement, and I'm going to end up paying her one way or the other. FWIW, it's kind of a full-service flat-fee deal, where you pay on a graduated scaled based on sale price of the home. Total nut there is going to be $4,950, which saves me about $10k in commissions on her side. She deals with photos, lockbox, negotiations, MLS listing, etc. She's quick to respond when I have a question, I just don't always get an answer as detailed as I'd like.

    I haven't addressed it with my wife yet, but I expect we'll go this weekend and spend some time & money on accessories for the property. I've blown through my original rehab budget and nearly all of my reserves, so there's no room for a full-on staging, but we can put a few hundred dollars of knick-knacks in to spruce things up.

    Regarding the appliances, it might not be clear from the photos, but there are brand-new black stainless appliances in the kitchen. It never occurred to us to install a refrigerator, because we've never bought or sold a house that included one (unless it was a POS left by the previous owner). In fact, I work for an iBuyer, and I'd say 95% of the homes we buy and sell do NOT include a refrigerator. That being said, we're not opposed to putting a unit in there to fill the hole (although it likely won't be black stainless).

    2Reply
  • Judy BestPro Member
    Investor · Little Rock, AR · Member since 2017 · 81 posts · 62 votes
    6y

    Stage it! Staged homes sell faster, because the buyers fall in love with the decorated home. And, they sell at a higher price. Secondly, get professional photos, perhaps a video, to market it after you've staged it. Don't lower your price more until you try this. \

    0Reply
  • Dan Mitchen
    Investor · Cleveland, OH · Member since 2015 · 99 posts · 42 votes
    6y

    Two things come to mind.

    1- If you adjust to $475k, that'll open up a larger pool of buyers where their agents have their criteria set at $475k max. In that price range in my market, maxes/minimums are usually set in increments of $25k. When you get down to the $100k-$150k range, the price points are usually set in increments of $5k-$10k. Also- if the home isn't staged, you can virtually stage it. I use BoxBrownie and I get quite a bit more showings when I virtually stage my vacant listings. You only need to do a couple rooms (living room, 1 bedroom, and dining room). If you DO decide to do that, ask your agent if they can withdraw the listing for a couple hours and then put it back on. That way, it'll get sent to all the buyer's again and they may view the property differently now that it's staged.

    2- Are you familiar with Airbnb and how to determine if there's a market for it in this location? If not, let me know and I'm happy to take a look at shed some guidance.

    1Reply
  • Justin Jarmon
    Real Estate Broker · Magnolia, TX · Member since 2016 · 60 posts · 10 votes
    6y

    @Andrew Taylor Give me a shout and we can chat some. Magnolia boy to Magnolia boy. Lets figure out how we can get you out of the predicament. My fear is the flat rate broker is running a numbers game and not giving you enough good attention. Lets grab a coffee and chat. Justin Jarmon

    1Reply
  • Brett StompsPro Member
    Realtor · White Salmon, WA · Member since 2019 · 6 posts · 7 votes
    6y

    It seems late in the year to try and sell, and your agent doesn't seem to be the best. You know this by now from the other comments. You can always come up in price if the house has multiple offers. But by pricing too high in the beginning and then lowering and lowering the price over time you receive the kiss of death. People will begin to wonder why it wasn't sold in X amount of days and the mob factor will set in. What could be a perfect deal now has a kiss of death on it as buyers potentially wonder why it hasn't sold and simply just stay away. Maybe this is what is happening? GLWS.

    0Reply
  • Mark S.
    Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
    6y

    As others have said - staging!! Looks like a nice house but very vanilla inside in terms of color and accents. With a lot of open space, people have challenges in actually visualizing how the space works. I don’t think k I would ever try to sell a hose without actual staging. And shop around for stagers. They can be ridiculously expensive but at least in MN there are also good ones who are reasonable. Good luck!

    0Reply
  • Jasmine Wevers
    Rental Property Investor · Reno, NV · Member since 2019 · 16 posts · 4 votes
    6y

    @Andrew Taylor I agree with the other posts: You did a very nice job on the rehab!  Well done.  If it were me I would change realtors and definitely stage it. 

    0Reply
  • Jonathan W.
    Los Angeles, CA · Member since 2019 · 512 posts · 301 votes
    6y

    @Andrew Taylor you need to re-evaluate your price point. That simple. If you lose money on the deal then the numbers were simply wrong but do you want to pay expenses month after month hoping you were right or do you want to fix the numbers? Like zero showings? It’s either over priced or you guys remodeled using tongue depressors and crayons or your price is too high. Or it’s in the middle of no where?

    0Reply
  • Jarrod Kohl
    Boston, MA · Member since 2017 · 209 posts · 126 votes
    6y
    Originally posted by @Andrew Taylor:

    Thank you all for your thoughtful input. I'll address a few issues, in no particular order.

    I can't really fire the listing agent. I've signed a 180-day listing agreement, and I'm going to end up paying her one way or the other. FWIW, it's kind of a full-service flat-fee deal, where you pay on a graduated scaled based on sale price of the home. Total nut there is going to be $4,950, which saves me about $10k in commissions on her side. She deals with photos, lockbox, negotiations, MLS listing, etc. She's quick to respond when I have a question, I just don't always get an answer as detailed as I'd like.

    I haven't addressed it with my wife yet, but I expect we'll go this weekend and spend some time & money on accessories for the property. I've blown through my original rehab budget and nearly all of my reserves, so there's no room for a full-on staging, but we can put a few hundred dollars of knick-knacks in to spruce things up.

    Regarding the appliances, it might not be clear from the photos, but there are brand-new black stainless appliances in the kitchen. It never occurred to us to install a refrigerator, because we've never bought or sold a house that included one (unless it was a POS left by the previous owner). In fact, I work for an iBuyer, and I'd say 95% of the homes we buy and sell do NOT include a refrigerator. That being said, we're not opposed to putting a unit in there to fill the hole (although it likely won't be black stainless).

     I would still look at getting a new agent, you are not really "saving 10k" if the house doesnt sell.  Often you can get out of a listing agreement by just asking, but again, not sure your exact deal.  

    About price drops. I always think it is a mistake to keep dropping price. If you drop 10k every couple weeks people will just wait. In an ideal world, you do one big price drop. So you don't drop 10,10,10 you drop 25k once then stop.  

    At this point I would consider pulling it from the market, staging it, getting a new agent, new photos and then putting it back on the market as a new listing (at updated price). Making sure that the agent is driving traffic to your house and not just hanging a sign and waiting to cash her flat rate check. 

    3Reply
  • Arvi Carkanji
    Flipper/Rehabber · Nashville TN · Member since 2018 · 25 posts · 11 votes
    6y

    This is definitely a hard choice and it actually happened to me as well. What I decided to do is just take the loss and move on. So I dropped the price of the house drastically and then it sold. You got to weigh your wins and loses and in my instance I thought it was the best to move on and not drag it out. I know other people would have probably done a rental, but I didn't think that was worth it on that house. So if your whouse is not a great rental I would just drop the price till it sells and move on. Of course it's not ideal, but you win some and lose others. Hope this helps

    0Reply
  • Stephanie Simmons
    Flipper/Rehabber · Lakeland, FL · Member since 2019 · 131 posts · 91 votes
    6y

    @Andrew Taylor your realtor is horrible. Urg... it’s hard to find a good one that’s why I got my own license. Unfortunately I don’t have access to your state. Maybe you can find a realtor here in your state that can quickly look at the stats for you.

    0Reply
  • Carlos Salazar
    Member since 2019 · 20 posts · 7 votes
    6y

    I see that you now have a game plan in mind. Good luck and please keep us posted with what you decide. 

    0Reply
  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    To me the black countertops are a distraction and I am sure they cost a fortune....

    If you aren't getting any traffic that means they don't like the price or they don't like something in the house and they can determine they don't like it from the pictures.  As others have mentioned staging could help but if it is the curb appeal relative to competition or if someone hates (fill the blank) they are not going to tour the house.  We stage all our houses but I have seen bad staging jobs so it isn't a golden ticket.

    0Reply
  • Ira Berman
    Rental Property Investor · Baltimore, MD · Member since 2019 · 2 posts · 0 votes
    6y

    @Steve K. I would refi 100%

    0Reply
  • Account Closed
    Real Estate Agent · Cleveland, OH · Member since 2019 · 359 posts · 295 votes
    6y

    @Andrew Taylor lower the price and also find out if your agent sucks (assuming the agent isnt you/your wife). Sometimes agents just suck at responding and dont market it as best as they could. Look into professional photos or staging as well.

    0Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    6y
    Originally posted by @Ira Berman:

    @Steve K. I would refi 100%

    ?  

    0Reply
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