Updated almost 2 years ago on . Most recent reply
Fix and Flip - Need advice keep or sell
Purchased the house with cash (3bd/2bth). The renovation cost was half personal money other half HELOC from other rental. The carry over cost with utilities and HELOC interest payments is about 1k a month. I still have a pretty good amount of reserved cash in the HELOC.
House located in transitional neighborhood. It's a growing area with lots of potential within 3-5 years. Its the first house in the neighborhood to be fixed up by far. We've had a lot of interest in purchasing but people can't get over the neighborhood. They see the potential but not willing to move into a neighborhood with the current status. I have dropped the price over the past few months by 8% and standing still now. I've owned the property for about 7 months.
1) I can drop the price another 13% and break even.
2) Drop the price 1-2% thought-out the next few months and hold until it sells? I can pay carry cost for a few months...
3) I considered renting and Pulling 100% of my cash out and paying off the HELOC... the rental income would not cover the mortgage payment. I could leave some cash in it? DSCR Loan?
4) Risk short term rental... Some of the houses do great in the area and some do not.
5) Any other advice?
Most Popular Reply
In the last 6 months most appraisals everywhere were missing the mark. I had borrowers telling me they were gonna get 250k on it when done and the appraisal would come in 200k. Messes up the whole loan.