Finished Flip, No Traffic - Now What?

Buying & Selling Real Estate
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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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  • Jason GreanyPro Member
    Real Estate Agent · Lafayette, CO · Member since 2019 · 4 posts · 0 votes
    6y

    @Andrew Taylor

    I am in the same boat. Our house is not far from yours. I bought it one year ago as of yesterday. We hit the market in June, dropped the price from 499 to currently 424. We are now in losing money territory and are investigating the rental option. We we bought there were not many homes for sale when we hit in June all the investors who Bought over the winter hit the market. There are now over 20 homes for sale in .25 mile radius. We are getting zero traffic. No showings in over a month.

    0Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    6y

    @Andrew Taylor

    Improve curb appeal. Swap out your thumbnail/ first pic, it sucks. Nobody is clicking with that as your thumbnail. Use the best interior one (looks like your kitchen / living area) paint the backside (Backyard that you see) of your fence white.

    You’re competing for:

    1. A click to open your listing.

    2. A click response to it (or a buyers realtor)

    3. Showings

    4. An offer.

    In that order. The low lying fruit here if your pricing is low as you’ve said is the click. I bet if you ran some 7 day A/B testing swapping that first pic gets 30%+ more click through. If that’s what you got for curb appeal and that’s the best street view pic you can take of it I would scrap that one altogether, but that’s a last resort.

    Get the click.

    0Reply
  • Dave Rissi
    So. Calif. · Member since 2018 · 3 posts · 1 vote
    6y

    @Andrew Taylor

    0Reply
  • Dave Rissi
    So. Calif. · Member since 2018 · 3 posts · 1 vote
    6y

    @Andrew Taylor. Why don’t you to talk to 3 top Real Estate agents in your market area. Neighborhood experts. Maybe you should pay a commission. Put it into mls And hire hundreds of agents to sell it.

    0Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    6y

    A significant number of the pictures (starting with 2 and 3, and including ALL the bathroom pics) can be improved with better attention to camera positioning. 2 and 3 serve nearly no purpose other than to show this is a LARGE house with uniform flooring and great natural light. This takes what is most likely something quite aesthetically pleasing in person and breaks it down into 2 words “large” and “bright” and a sq ft number. Same way as you focused on creating a positive feeling at every step of the renovation with your choice of materials etc the same decisions are made when photographing the space.

    And I would drastically rewrite the copy. ... buts that’s an entire other argument that I’ve had (and won through A/B testing on multiple occasions) with my realtor!

    It ain’t show friends it’s show business. If you want completely average results just do exactly what the rest are doing. You gotta treat it like a war man, every time someone skips by your listing you lost a battle.

    0Reply
  • Andrew Taylor
    OP
    Contractor · Magnolia, TX · Member since 2016 · 279 posts · 155 votes
    6y

    Yeah, I'm not super happy with the "fish-eye" photos. I wasn't there the day the photos were taken, so I don't know if it was an actual professional (which I kinda doubt) or the realtor herself with an iPhone (which I kinda suspect). If/when we go through the unlist/stage/relist process, we'll do a better job with the photography.

    0Reply
  • Account Closed
    Member since 2019 · 1k+ posts · 1k+ votes
    6y

    @Andrew Taylor

    Why wait to retake photos? It can be done in an hour. And honestly, someone with a better eye for composition could use their iPhone and it would still be better. My opinion is that you’ve got a great asset there, I know zero about your market but from what the pictures and copy show I believe it is entirely within the realm of possibility you could be leaving money on the table if proceeding without change. Again, that is with no background (or effort to retrieve any) on your market.

    1Reply
  • Dana WhickerPro Member
    Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
    6y

    @Andrew Taylor Hi Andrew. I didn't read every response but you had some significant misconceptions about a pool on a property. You will eliminate almost as many buyers as you bring in with a pool. I don't know what the exact number is it I guesstimate 40 50% of the market you have totally eliminated with a pool for a number of reasons. Keep in mind I live in Florida. Ppl with small children, the maintenance, the elderly who couldn't use the pool if they wanted to. You eliminate a bunch of the market by having a pool.

    My standard procedure on a flip if the pool needs any kind of significant work I fill it in if it's perfect in pristine I leave it.

    0Reply
  • Allan Flamm
    Rental Property Investor · Toronto, ON · Member since 2019 · 8 posts · 3 votes
    6y

    @Andrew Taylor

    Hey Andrew, I have found that there’s a few factors involved with selling a property.

    1. Attractive prices (before you lower it to your minimum, try all other avenues.)

    2. The time of season. Here in Toronto, Canada there is a hot season for selling. This is typically between March-August. Find your hot season where you’re from. You should be able to find this with a Real Estate Agent.

    3. The choice of Agent you hire makes a HUGE difference. You need an agent who specializes in investing. One who is a shark and a great negotiator. One who uses his own tools to market his/her listings. A solid realtor will do a ton for you.

    4. Tastefully stage and decorate this property. Do not leave it empty. You want to capture the emotions of your buyer. Nothing is keeping them there. You want to help them envision a future there. Give them something to drool over. Modern elegant furniture that fits into each space and even creates the look of more space. A professional stager will do this and it should only cost you between 800-2500 and it is well worth it. It may be able to get you 20,000-50,000 more on the list price.

    5. Make sure the pool is completely necessary for your area. If you’re not in an all year round warm country it may not justify this type of amenity. Some people are lazy and or do not want to spend the time or money to maintain it. Also make sure the area is high income area for a pool. You may need to fill that pool up and create a beautiful garden/deck.

    6. Make sure your home finishings is up to date. Hard wood instead of carpet, a nicely neutral paint job throughout the house such as a light grey.

    7. Make sure the house is clean and spotless. Professional cleaning is key and also decluttering is EXTREMELY important.

    8. When you have showings make sure the place is always available.

    Good luck!!!

    0Reply
  • Account Closed
    Roswell, GA · Member since 2017 · 26 posts · 10 votes
    6y

    @Andrew Taylor

    Hey! My recommendation is either break even or lose <5k and sell. You don’t want to lose big and lose that #1 spouse support you worked long and hard for. Another option is to refinance it into some long-term debt and just rent it out.Even if it only cash flows $250 that’s at least enough to put expenses of the year until you wait for the market to turn. Refinancing you should get most or all of your cash back and then you can go find another deal and chalk it up as a lesson learned. If you look at long-term strategies you’ll see the real estate prices will always go up over a long enough time. And if you have somebody else paying down the principal while you rent it out that’s not a bad deal.

    I would refinance and rent. Make a little cash. Learn a valuable lesson. good luck friend.

    0Reply
  • Michael Wise
    Flipper/Rehabber · Casper, WY · Member since 2019 · 3 posts · 6 votes
    6y

    @Andrew Taylor Are you using a real estate agent for the listing?

    0Reply
  • Bryan Scott
    Investor · Castle Rock, CO · Member since 2011 · 107 posts · 65 votes
    6y

    As others have pointed out already, the items I noticed from looking at the listing, the pics, very briefly looking at the market, etc:

    1. The front elevation is a bit stark in terms of color and curb appeal.

    2. The interior photos are amateur-ish:  Over-exposed (especially windows), viewing angle set too wide for the camera lens (some curvature on lines that are supposed to be straight).

    3. No staging; this is a really big mistake, not just in this market, but any other.  Buyers have to be able to see themselves in the home with their families.  This requires proper staging to provide ideas, perspective and scale.

    4. No floor plans.

    5. This is 2019!  Why is there no 360/3D tour to REALLY show the space.

    As others have mentioned, when all else is right and the house still does not sell, or draw at least an average number of showings, it's about the buyer's perception of value vs. price.

    Why did you price it where you did when you launched the listing?  Revisit the steps with your agent and make sure you agree with her rationale and logic.

    What does the competition look like?  Have you, yourself, visited these competing listings with your agent in tow so you can compare and contrast similarities, features and benefits and then reflect in your marketing.

    Do you know which demographic you are targeting?  Millennials, move-up buyers, 50+, who?  Then target your marketing to that group.

    What is the market doing in Magnolia; how many active, under contract/pending, sold, withdrawns, etc.  Is your situation better or worse than the market?

    Has your agent conducted any OPEN HOUSES?  If yes, what is the feedback from those folks who walked through the property?

    Has your agent conducted a Broker Open House?  Just like everyone on this post, we all have opinions.  If your agent invites Brokers with a some wine and cheese tray from your local HEB store, you will get a bunch of feedback, which could be used to sell your newest flip!

    Best of luck to you!  I wish you well.

    0Reply
  • Anne Smith
    Steinhatchee, FL · Member since 2017 · 77 posts · 69 votes
    6y

    Revisiting this thread as it came up in a search I made. It seems you havent done any staging or updating the rooms. And now the initial picture is of the pool. As one who just put in a pool and actually wanted a pool, I would never have bought this house because of the pool. It looks like maintenance nightmare. The large tree right next to the pool? Who would ever think that was a good idea. And the pool is shaded, which will keep it cool, when most people want a pool to be warm for comfort. It was mentioned earlier that you could possibly fill in the pool and make it a really nice back yard. It might be something to consider. At any stretch, Id get rid of that pool picture for your first photo.

    0Reply
  • Anne Smith
    Steinhatchee, FL · Member since 2017 · 77 posts · 69 votes
    6y

    So 5 months later, looks like its finally staged. 

    0Reply
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