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Rehabbing & House Flipping

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Rachel Perl
  • Rental Property Investor
  • Brooklyn, NY
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My Flip is Not Selling

Rachel Perl
  • Rental Property Investor
  • Brooklyn, NY
Posted Dec 20 2022, 08:57

Hi,

I'm hoping to get some advice. We renovated a house in St. Petersburg, FL and it's sitting on the market for over 80 days with no offers yet. It's in a fantastic neighborhood but the layout is choppy. (for example, sunken dining room and steps going down to the 2nd bathroom and laundry room)  After a ton of showings the feedback we're getting is that the layout is an issue. It has a mother-in-law suite which we thought would be a good selling point. The price was lowered multiple times but it didn't help. I'm not sure where to go from here. It doesn't make sense to start doing construction at this point after fixing it for almost a year. I would REALLY like to sell it but if we have no choice we will have to put it on the market for rent, I just wonder if we'll have the same problem. 

I would appreciate any tips. 

Thank you.

Rachel

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Manny Vasquez
Agent
  • Real Estate Agent
  • Orange County
277
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303
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Manny Vasquez
Agent
  • Real Estate Agent
  • Orange County
Replied Dec 22 2022, 12:48

@Rachel Perl - Here are a few ideas which I have employed in the past when listing properties for my clients:

1. Pull the listing from the MLS NOW, and leave it off the market for the next 2-3 weeks. These are the slowest times of the year due to the Holidays. These next few days on the market won't get you many eyes and your DOM-count will continue to go up. HIgh DOM are bad for the sellers, good for buyers. You can relist the property in mid-to-end of January.

2. Look at the comparables in mid-January to determine where you should be on price. Take an honest look at your property don't go off the ARV you used a year+ ago, that figure is more than likely not valid anymore.

3.  If the "sunken" room is an eyesore, you may consider "filling it" and making it level with the rest of the house.  Same with the laundry room.  The bathroom too. However, all of this "filling" may be cost prohibitive (especially the bathroom).

4. Have you considered "staging" the home?  I would bring in a Professional Stager in your area and let her advise you on how to successfully stage the home.  Share the information that other people have shared with you so that she knows what specific issues to address.  Professional Stagers are experts in hiding "eyesores" and in making other features "pop". Stagers have worked wonders for my clients, especially if there were any issues with flooring, spacing, walls, windows, rooms and general flow of the property.

5. If the above fails....then you could also offer closing costs or rate buy-downs to the buyer.  However, I wouldn't come out saying this right away as you may be perceived as a desperate seller.

I hope the above helps!  Good luck!

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Adam Mittermeier
  • Property Manager
  • Little Rock, AR
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Adam Mittermeier
  • Property Manager
  • Little Rock, AR
Replied Dec 22 2022, 12:57

Something to take into consideration is we are in the holiday months (SLOW SEASON). Not many people are looking to move during this time.

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Nick Dallaire
  • Developer
  • Boston, MA
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Nick Dallaire
  • Developer
  • Boston, MA
Replied Dec 27 2022, 05:42

I had a friend run into a similar situation a while back. Open floor plans make all the difference. Sometimes it's simply a matter of taking down a wall and opening up the floor plan to make it more appealing. Since then Im always looking for a wall I can take down to breath some fresh air into a property. 

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Jared Hottle
Pro Member
  • Real Estate Agent
  • Cedar falls IA Waterloo, IA
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Jared Hottle
Pro Member
  • Real Estate Agent
  • Cedar falls IA Waterloo, IA
Replied Dec 27 2022, 06:07

This is happening to flippers across the country. Many people are mad at how much flippers can make on a quick turn but forget the risk that is involved when market conditions change. Many of the issues buyers would not of cared about this summer are now coming to the forefront. 1 stall garage, choppy layout, etc. My advice is if you can get out from under it and not lose money do it. If you can rent it and make a bit more than expenses I would look to do that as well. Better times will come for flippers but right now is tough.

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Jeff Copeland
Agent
  • Real Estate Agent
  • Tampa Bay/St Petersburg, FL
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Jeff Copeland
Agent
  • Real Estate Agent
  • Tampa Bay/St Petersburg, FL
Replied Jan 14 2023, 09:36

The Fall, and the holiday season (Q4 in general), is the worst possible time to list a property. On top of this seasonal slump, you had the interest rate spike at the same time. So this isn't surprising. 

Has there been any change since the first of the year?

Things will definitely start to pick up more in the Feb/Mar/Apr timeframe if you can wait it out. You might even consider taking if off the market for a new weeks (61 days will reset the DOM), staging, and updating your listing photos.

Renting can also be a good plan B. Rather than paying short term capital gains tax, renting it out for a few months and possibly paying long term capital gains tax when you sell could offset some of the holding costs, etc.

Happy to help with a rent versus sell analysis if you're still stuck.  

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
Replied Jan 14 2023, 21:25

Start offering owner finance. How much would it cost to change the layout?