Why can't I sell my flip!

Investor · Nashville, TN · Member since 2015 · 6 posts · 4 votes

We bought a home in one of the nicer zip codes in our city, in the top school district at what we thought was a deal. We put a significant amount of money into the house and have received excellent feedback on the renovation itself. The negative across the board is proximity to the interstate. Other than those two pieces of information, I can't figure out why the house isn't selling. Again, we have a significant amount of cash tied up in this house. We have lowered the price by $65k when we listed it 6 months ago and are about at our break even if we sold tomorrow.

At this point, I'm searching for ways to get creative in sorting through any other options. We have listed it as a rental (for a week) as well with no bites.

Any feedback/suggestions/others experiences would be greatly appreciated!

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Will BarnardPro Member

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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes

Clearly the market has spoken and unless your marketing is poor (which appears to not be the problem) then the highway is the factor causing the problem and since you can't move the home or the freeway, then you can only lower the price. Time is your enemy and even if you take a loss here, it could be better than gambling on waiting it out. Opportunity costs must be factored in here and the quicker you get on to your next profitable deal, the better. Lower the price, perhaps put up higher sound proofing fencing to cut down the noise, and dump this.

FYI, I never buy homes on major streets, near railroad tracks, in airport flight paths, or any other major deturant to buyers. The bigger your buyers pool the better. Take this as your lesson in where to buy.

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Daryl Biberston
Appraiser · Apple Valley, CA · Member since 2015 · 11 posts · 4 votes
9y
How many comparable sales within 1/4 to 1/2 mile of your home did you find? Were they at the same price point? Did you list with a reputable brokerage? How many commission points are you paying? Some questions I have to start with.
Jared
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Hannah Stephenson
OP
Investor · Nashville, TN · Member since 2015 · 6 posts · 4 votes
9y
The comparables for this home were difficult. It's a pocket that backs up to the interstate and not many homes have moved in the last few years. The ones that have are at the million dollar mark. (new builds). Comps further out were at the same price point or lower. We thought we were doing well to have the lowest priced (renovated) home in the (highly desirable) school district. I am an agent and have it listed with my brokerage. I'm paying 3% commission.
Thanks for replying!
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Chris Carson
Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes
9y
A property is only worth what someone is willing to pay for it. Sounds like the market is telling you that you are overpriced.
3 Reply
Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
Send along the address and we can have a peak. How close to the interstate? If it truly backs up to it, then it needs to be priced way below comps that don't. The biggest reason it isn't selling... it is probably overpriced.
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J ScottPro Member
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Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
9y
If the only negative you're getting (and it's "across the board") is that it's close to an interstate, then clearly that's the issue -- it's priced too high for its location. Since you can't move the property, your only real option is to lower the price.
Unless there are other reasons that your potential buyers aren't telling you...
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Hannah Stephenson
OP
Investor · Nashville, TN · Member since 2015 · 6 posts · 4 votes
9y
I really appreciate all the feedback. Here is a link to the listing just to take a look at the pictures and location:
https://www.zillow.com/homes/for_rent/house,mobile...
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Hannah Stephenson
OP
Investor · Nashville, TN · Member since 2015 · 6 posts · 4 votes
9y
https://my.matterport.com/show/?m=NMCvEotk4uV
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Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y
The staging looks very nice (in my opinion), the photos could be better, however it sounds like you are getting traffic but no offers? That highway could be the issue. I see a much more expensive house around the corner which also backs up to the highway. That one looks to be sitting also. It could very well be this one issue that is keeping away the offers. It might be worth the loss on the sale to get the house off the books and move on.
My feelings are, you can sell a house on any street, it just all boils down to how little you are willing to sell it for. It's a good learning experience, just a shame you might be losing money on it.
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Will BarnardPro Member
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Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
9y
Clearly the market has spoken and unless your marketing is poor (which appears to not be the problem) then the highway is the factor causing the problem and since you can't move the home or the freeway, then you can only lower the price. Time is your enemy and even if you take a loss here, it could be better than gambling on waiting it out. Opportunity costs must be factored in here and the quicker you get on to your next profitable deal, the better. Lower the price, perhaps put up higher sound proofing fencing to cut down the noise, and dump this.
FYI, I never buy homes on major streets, near railroad tracks, in airport flight paths, or any other major deturant to buyers. The bigger your buyers pool the better. Take this as your lesson in where to buy.
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Ralph R.
Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
9y
Hannah Stephenson One of the lessons I learned a long time ago is your first loss is your best loss. I'm like the others on here it's probably price but the real bottom line here is that you are so close to your break even point. It's pretty late to ask why. My question at this point would be how am I gonna manage through the loss. Renting is probably one way but if proximity to the freeway affects its rent ability it might be better to just drop the price some more and take the hit. Maybe the cure is to make it your primary a couple years and maybe some appreciation will help you out. It will change your tax burden for sure. At some point every endeavor gets into trouble. It happens to all of us. This is what separates the men from the boys. Any business can do well during the good times. It's the business/investor that can manage themselves through the mistakes or bad times that will survive and prosper. Don't focus on why it happened yet. Focus on getting through it as intact as you can. Then worry about what went wrong so you don't repeat the mistake. My $02. RR
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Jessica Wood
Investor · IA · Member since 2017 · 88 posts · 36 votes
9y
Can you hear road noise from the yard/house? It looks like a nice home but that proximity to the freeway would kill it for me personally as I am searching for a similar home for our young family. Are you having open houses?
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Maria McCreless
Real Estate Agent · Tallahassee, FL · Member since 2017 · 135 posts · 67 votes
9y
Have you submitted for the zestimate to be revised? While it doesn't mean much to experienced people I have had my buyer dispute with me on a home price simply because of that. Your home is over zestimate where all the comps are listed way under. It looks like there is a few on the market near you so you have to also compete against those and it seems like most of those have been on for a while. So area is cold which makes it even harder but if your getting lots of showings then it can only be price. Good luck!!!
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Wes Butler
Socorro, NM · Member since 2017 · 26 posts · 3 votes
9y
newbie here... I once flipped a house and, in an effort to build interest, I offered an additional $500 to the closing agent on top of the standard commission. My thinking was that it would encourage the inexperienced and hungry real estate agents to bring in traffic. I believe it worked for me. Not sure if this is allowed in all markets (this was in oklahoma).
Again, I'm just a newbie.
Wes
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David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
9y
@Hannah Stephenson,
Ok, So, you don't "back up" to the highway, but you are close. I take it there are no noise walls along the highway, either - the aerial shot wasn't clear on that. Looks like there are retaining walls, though.
I'm guessing (note the wording) that the way you bought it, it wasn't a great deal if you're now at your break-even point. I think you'd have wanted to be into it at around $325K or so before repairs so you could come onto the market well below FMV for a quicker sale - you'd have wanted to out start asking probably $450K and come down from there. The dearth of comp.'s was likely the clue and you'd have wanted to take note of that on the buy if you were planning to flip it.
Water under the bridge, I know. Hard Knocks U. is THE most expensive education out there.
See if you can connect with a relocation company or some other potential source of a long term lease until the market changes a bit. Perhaps also consider advertising it as an executive home for sale or long term lease - something with less of an initial commitment, then negotiate for a later sale while accepting cash flow from it.
Otherwise, not sure how to salvage this one ...
1 Reply
Yia Her
Real Estate Investor · Sacramento, CA · Member since 2016 · 96 posts · 26 votes
9y
The remodel looks great. Sometime when buying in a nicer zip and location, understanding the type of end buyer would be extremely important. Not sure what kind of market Nashville is in but definitely the end buyers who paying $450k+ for a home probably is a little more pickier on location and not necessarily on the upgrades and remodel. Anyway - looks like your considering other exit strategy to implement at this time since it seems to have been on the market for about 171 days with no offers. Have you looked into short term rentals such as airbnb since you mention renting seems to be dry as well? Not sure how you bought the property, your own cash? Hard money? Private money? But those are important to share because it changes the situation and if you need to dispose for a quick loss or if you can afford to hold on. Hop that helps, but little more info would give other savvy BP more ways to chime into help. By the way, the map right across from the freeway seems to have a space where there's a lot of little streets, is that a military base??
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Jason Chen
Tampa, FL · Member since 2017 · 240 posts · 153 votes
9y
This is odd
On one hand, is it because of the marketing? Or is it the highway? Or is it a combination of both?
You've stumbled on to one of those pretty uncomfortable deals where everything looks good on paper, and even in person, but for some reason, it's just not selling. Also, the answer isn't super obvious. There is however, a solution to your problem. We just don't know what exactly the solution is yet
I know that for me, living next to the highway for a home that much would be a GOOD thing, as I am someone who likes to drive often, and I am sure the highway is super convenient for me to visit close by areas.
Let me ask you these questions that others have not ask yet:
1. How close it it to shopping areas, like WalMart?
2. How close is it to the post office?
3. How close is it to the nearby schools again?
If the answer to question 1 is more than 20 minutes, then that might be why it's not selling too quickly. It might be too remote, and the customers for that area might want to patron shopping centers more conveniently.
Also, how many potential buyers have stepped in just to preview the property? If the answer is not many, then I don't think it's really the price. It might be because people are simply just unfamiliar with that neighborhood/location, and it's up to you to aware them. Everything looks good, and I'm sure the price is reasonable.
1 Reply
Jason Chen
Tampa, FL · Member since 2017 · 240 posts · 153 votes
9y
One suggestion which might sound silly, but then again I'm just throwing out random stuff at the wall to see what sticks.
I noticed the lawn was very bare. Sure, there is green grass, but there's not any interesting landscaping going on. Don't underestimate the power of curb appeal. The lamest stuff like $1,000 in a nice flower garden and some bushes/shrubbery/small trees, and mulch and bricks and stonework could alter people's opinions a LOT. Learned this from people who were masters at their craft. The shrubs and wooden plants I see are bare. Some don't even have leaves.
When I walk up to your property, I'm thinking in my head that it's worth about $100,000 less than your asking price of $499,000. This doesn't "seem" like a half million dollar property upon my first impression when walking up to it from the front as I pull up. People make home buying decisions mostly upon emotion. This isn't news, but it's easy to forget. The house looks plain on the outside, and I don't get the sense of modernity in any of the design or the exterior architecture of the building. If the comparable sold near you look the exact same, then you might as well disregard everything I say. I just hope you didn't pay much for this place just in case you have to lower the price even more.
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Michael Gutierrez
Redmond, WA · Member since 2017 · 21 posts · 1 vote
9y
Im not a guru nor have any deals executed yet but when I look at zillow I look go to the neighborhood tab and see the market condition in your case it is "cold". Then I look at the other houses that are "for sale" and the only one I saw on there has been on the market for 85days . That would tell me to look at it as a buy and hold and possible rental but more importantly that it should have been a crazy good des considering the demand isn't in the area. But again I'm an newbie and this is my thinking. Good luck on the sale and maybe it can become a rental until demand goes up.!
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Jason Chen
Tampa, FL · Member since 2017 · 240 posts · 153 votes
9y
Originally posted by @Michael Gutierrez:
Im not a guru nor have any deals executed yet but when I look at zillow I look go to the neighborhood tab and see the market condition in your case it is "cold". Then I look at the other houses that are "for sale" and the only one I saw on there has been on the market for 85days . That would tell me to look at it as a buy and hold and possible rental but more importantly that it should have been a crazy good des considering the demand isn't in the area. But again I'm an newbie and this is my thinking. Good luck on the sale and maybe it can become a rental until demand goes up.!
I have reason to believe that this area is all about the marketing. The highway stuff is probably BS
If you look at the price history, you can see that they paid $340,000 total for the property. They probably spent let's say $80,000 total to renovate it to make it look the way it does today. That brings the total to $420,000. They need to sell it above $450,000 to at least make a little something, but the problem is that it doesnt appear that even an offer for $450,000 has arrived yet.
Also, another look at the price history will show you that the original listing price for this place was $496,000, and it sold for $340,000 after several price drops. It sat for 5 months for sale before the current owner bid $340,000 and wont at that price. This should be an indicator that this area is not in high demand. Not even the realtors or the bank knew how to correctly appraise the property at first because activity around here must be really low.
I am like 95% sure it is all about marketing at this point. Nobody is aware, and because of that, it becomes difficult to command a price above $400,000
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Jason Chen
Tampa, FL · Member since 2017 · 240 posts · 153 votes
9y
Upon a third review, I think the real mistake isn't even really location. It's that you really should've accepted the property for about $290,000 or even less. $300,000 might've been ok. There was a probable misappraisal when you first scouted this place of about 12-15%, and that's all it takes to differentiate a solid flip vs. one that might bite you a little bit. The good news is that the worst case scenario is that you sell the house for much lower than anticipated, and you lose just a few thousand dollars which really ISN'T disastrous in this game.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y
I looked at it and 3 thoughts as a fellow Tennessean:
1. The curb appeal is non-existent. It looks like a cheap house on the approach.
2. That is a busy area and I bet the road noise is obnoxious.
3. I wouldn't try to rent it unless you want to be a landlord. As someone who has lost a boatload of money on a house before sometimes you just have to take your lumps.
PS: The house looks very nice inside.
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Chris Carson
Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes
9y
Having seen the pics I agree with Jd Martin . If I'm spend almost half a million of my hard earned dollars, I better have decided that I want it the second I lay eyes on it. The interior looks great but the exterior is very ho hum. The landscaping is lacking, the colors are very neutral, and it just kind of looks like the exterior was an afterthought IMO. A few grand in landscaping and some color accents (maybe a brightly colored door?) would likely pay for themselves but at this point that ship may have sailed unless you find a new base to market to. 6 months on he market is always going to lead a buyer to come in low.
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Chris Brown
Rehabber/Contractor/Business Manager · Atlanta, GA · Member since 2015 · 140 posts · 70 votes
9y
You need to have your realtor pound, nicely, the buyers agents who have come, or will come, to view it to find out why buyers do not want to make an offer. It is probably the proximity to the highway, which you can not do anything about, but I would want some solid feedback on the items you could possibly address. If all feedback comes down to highway noise, then dropping further may be the only option. With a cursory look online, it looks like there was a 4/3 that has 1,000 more sq ft that sold for $506k. Winter is coming and along with it the dreaded selling months of November and December. You don't want to still be holding it then.
Best of Luck
Chris
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
9y
Originally posted by @Hannah Stephenson:

We bought a home in one of the nicer zip codes in our city, in the top school district at what we thought was a deal. We put a significant amount of money into the house and have received excellent feedback on the renovation itself. The negative across the board is proximity to the interstate. Other than those two pieces of information, I can't figure out why the house isn't selling. Again, we have a significant amount of cash tied up in this house. We have lowered the price by $65k when we listed it 6 months ago and are about at our break even if we sold tomorrow.
At this point, I'm searching for ways to get creative in sorting through any other options. We have listed it as a rental (for a week) as well with no bites.
Any feedback/suggestions/others experiences would be greatly appreciated!
There are no special tricks. If the house was properly marketed & it's still not moving after all of this time it's price. You need to lower your price.
2 Reply
Andrew Stair
Flipper · belleville, NJ · Member since 2015 · 23 posts · 6 votes
9y
I'm experiencing the same issue. I don't have the answers but just keep going. Hopefully the universe will shine on us and we will get our just. Good luck and I wish you happiness
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