Flips at a discount - need some advice

[Dean Albo]

Hi all,

We're doing mainly Flips and rentals but 2 projects really knocked us out - looking for some insights...

- 1311 Golden Hill Dr, Indianapolis, IN 46208

High-end in indianapolis which is ready for an end-buyer, seems like we just can't get a buyer...

- 3309 Ruckle St, Indianapolis, IN 46205  - Several contractors ran away, we got to the point that we want to sell even at a loss and not continue with the project.

[Frank Pyle]

If 1311 Golden Hill is high end and sitting it is almost always price not product in this market. In Indy the buyer pool thins out fast above the neighborhood ceiling so if your ARV was say 650 but the last three true comps closed at 575 to 600 you are fishing in a small pond and days on market will stretch. On the Ruckle project with contractors bailing the real question is what is the as is value today versus your all in if you finish because if you can sell at 90 percent of current ARV minus remaining rehab and still clear your debt and holding costs it may be smarter to cut it loose. Quick gut check on both deals is ARV minus total basis minus selling costs should leave at least 10 percent margin or the stress is not worth it. In this part of Indy buyers are payment sensitive right now so even a 15k to 25k price move can unlock a stalled listing.

What are your current list prices ARVs and total basis on each so we can sanity check the spread. If you want I can run a quick underwriting style review and help you decide whether to drop price refinance to a rental or liquidate and IEC can help with the local execution piece if needed.