So I have done 6 flips before using a partner. This time I did one solo. I found a home in ATL in a great location, but a horrible driveway.
Here is the listing
http://www.zillow.com/homedetails/1900-Harper-Rd-NW-Atlanta-GA-30318/35916027_zpid/Here's why I am in trouble. I took at 6 month loan from a Hard Money Lender. The loan is due 7/10, I don't have a buyer, I got turned down for traditional refinancing, and I'm out of capital. I've had showings and everyone says it's beautiful home, but everyone hates the steep driveway.
I've called 5 different concrete guys, 3 ignored me and 2 called me back to say the same thing, nothing can be done. They driveway has to go from the street to the garage floor, and you can't lower the home or raise the street.
I have had several rental inquiries and I am willing to do that, but I couldn't get refinancing. I dropped the price this weekend and we have had increased activity so that's good, but no offers. I had an idea of actually getting a tenant, go through the whole process of signing the lease and getting the deposit, take that to a bank and see what they say.
What do you guys think?
@Eduardo A. What do you owe on it? What can you rent it for? Is there any way you can find a partner that would finance it and the both of you split profits (depending on equity), or keep as a rental for a period of time?
what is your interest rate with Hard money lender? Are they willing to extend the loan term?
Also, pictures of driveway should help people suggesting better.
Are you getting declined flat out on refinancing or is there a equity problem and you think bank would be more inclined towards lending if you were to put some more money down?
Be prepared to drop your price to compensate. A bad driveway isn't the kind of thing you can fix.
It's pretty apparent from looking at the google maps that the driveway can't be changed. Are you all in $275K+? What are rents in the area? It doesn't appear to be a great rental hold.
The rehab looks great so I have no doubt people like the house. Can you take an even bigger drop in price and get it under contract in the next month? When you have a pending closing date, you can then negotiate an extension with your lender.
I hate to be blunt, but your pictures suck. Your pictures have to sell the house to a buyer, particularly since it has a steep driveway and it is right on I-75. Look at some of the pics Carol has done over at 123flip.com, not Milwaukee. Granted she staged those houses and that is something you may have to do.
You have a nice house in a good area, but because of the steep driveway and the fact it is right on I-75 you have to add a wow factor to give the buyer a reason to buy your house. In other words a nice house in a good area just doesn't cut it in this particular case.
If it was me I'd ask for an extension from the HML. I'd also contact Quantum bank about financing a rental. What about your old partner?
@Eduardo A. _ I looked at your Zillow listing and also a street view from Google Maps. Yep, there's a little slop there. But it looks like you did an awesome job on the rehab based on the pics.
Here's a thought. Zillow (and this is one of the reasons that I hate Zillow), but Zillow shows that you paid 205 in January, and now listed at 320. A lot of potential buyers will see those same numbers on Zillow and they will balk. I've actually had people to say things to me like, "I know how much you paid for it, and there's now way that we're paying you 320....". There may be a way to legally and ethically hide this information (what you paid for it), but it may take it several weeks for the data to populate through and for Zillow to update. For example, you could sell the house from yourself to your wife (if you are married), or to an LLC. Sales price could be 300 or so. Of course, you have to pay closing costs, but it's sometimes worth it (depending on the amount of the closing costs). What's your all-in number on this right now as it sits today?
At least it doesn't snow (much) in Atlanta :)
I am surprised they can't do anything to fix it. If it was straight up that would be different, but the way it curves around, I would think you could start the driveway further south across the front of the house which would lengthen the driveway and allow for a less steep grade.
Can you give me some more details about financing? With the HML you probably have 20-30% equity in the home. Is this the only source of income or do you have a wage earner job or have you been self employed for at least two years. Get back to with a PM and I'll see what I can do for you. We have 31 days from today so we can get this done if we structure the loan correctly and you have the above mentioned.
First, immediately speak with your lender about extending the loan. If they don't want to, start speaking with other HM Lenders about getting a new loan on the property.
Second, pay a professional to stage the house. This will add color and make the home more attractive.
Third, prepare to drop the price more.
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