Chicago, IL · Member since 2017 · 49 posts · 5 votes
I bought a multifamily home in Chicago about 6 months ago, and I originally planned to flip it/wholesale it for a small profit. However, all I can seem to get are insultingly low offers since the home needs work (It's almost a gut rehab). I have been trying to market this property on and of for the last 6 months, but now its starting to become a burden as I have to pay on a delinquent water bill that was the result of a busted pipe leak in the basement right before we closed on it, and additionally I have to pay the remainder of the taxes. I am honestly at a stand still as to what to do to at least make my money back. Recently a few friends have suggested that I invest some money into the basics such as new plumbing and some cosmetic work so that I can at least market it for a higher price, however, I am hesitant to do this as I am not sure if anyone will buy once the updates are completed. What would you all do?
Flipper/Rehabber · Bryan, TX · Member since 2014 · 258 posts · 170 votes
8y
If you are getting "a lot" of interest and multiple offers maybe they are not low ball. If you are getting a lot of offers from people who do not "understand it's true potential", maybe you are marketing to the wrong people. What is the property worth as is (not the tax appraised value or what you paid for it)? What is the ARV? What are the repair costs? I am not familiar with your market, but in my market, good deals are hard to find so if there is one it sales FAST (within hours). People are even willing to over pay to put their money to work, so if this were my deal in my market, I would spend some time on what the as is value of the property really is. If it is a great deal and no one can see it, put the money in it and sell it fpr a profit. If you are unsure you cannot get value out of doing the repairs repairs it may be too much to ask for someone else to do it.
Flipper/Rehabber · Yardley, PA · Member since 2015 · 451 posts · 307 votes
8y
@Josh Rogers depends on how rough it is. But I agree fix the issues at hand, do some cosmetic upgrades (paint floor lighting kitchen and bath) and should be able to sell it for a profit
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
Whether you fix it up or not, you will eat the most by getting it on the MLS......you'll find all the investors/agents looking for this kind of deal, not the 10% or so you'll "off market" marketing.
Chicago, IL · Member since 2017 · 49 posts · 5 votes
8y
@Wayne Brooks, I'm not looking to market on MLS. I've had no trouble attracting interested "investors" however, they always low ball me. According to Cook County, the market value on the property is about 167k. My agent has the ARV comped out at about the same, and maybe even up to 175k with higher end improvements. I got the property for 25k. If I was to go ahead with the improvements, I'd go the FSBO route.
Flipper/Rehabber · Bryan, TX · Member since 2014 · 258 posts · 170 votes
8y
If you are getting "a lot" of interest and multiple offers maybe they are not low ball. If you are getting a lot of offers from people who do not "understand it's true potential", maybe you are marketing to the wrong people. What is the property worth as is (not the tax appraised value or what you paid for it)? What is the ARV? What are the repair costs? I am not familiar with your market, but in my market, good deals are hard to find so if there is one it sales FAST (within hours). People are even willing to over pay to put their money to work, so if this were my deal in my market, I would spend some time on what the as is value of the property really is. If it is a great deal and no one can see it, put the money in it and sell it fpr a profit. If you are unsure you cannot get value out of doing the repairs repairs it may be too much to ask for someone else to do it.
Chicago, IL · Member since 2017 · 49 posts · 5 votes
8y
@Katie Neason, by a lot of interest, I mean that many people are asking to see the house. I've had several stop by already, but most of them are wholesalers who are trying to get an already discounted property for an even larger discount. The ARV on the property is 175k assuming a high end rehab. The repair costs are estimated at 80k from my contractor. I agree with your logic on doing the rehab myself, however, this would be my first flip and I have no one to actively manage and oversee the whole process as I live about 14 hours from it. I want to make my money back at the very least. I believe that in order to accomplish this, I will have to invest in the guts of the house ( Plumbing, electricity, cosmetics) so that I can comfortably ask for a higher number that I bought it for.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
8y
@Josh Rogers you bought it for $25k and are getting "low ball offers"? What is a low ball offer in that range? $5k? Sell it for whatever you can and move on. Its value doesnt seem to be appreciating so take the loss and be done with it
@Wayne Brooks, I'm not looking to market on MLS. I've had no trouble attracting interested "investors" however, they always low ball me. According to Cook County, the market value on the property is about 167k. My agent has the ARV comped out at about the same, and maybe even up to 175k with higher end improvements. I got the property for 25k. If I was to go ahead with the improvements, I'd go the FSBO route.
According to Cook County? What does that mean? Cook county is not a real estate investor. Do you mean the tax assessed value? Because I would put zero weight into that. Those numbers can be off by hundreds of thousands.
Where is the property? What are its characteristics? Size, number of beds/baths, etc.?
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
8y
Look for someone interested in rehab to take it over. Some neighborhoods they are gone faster than you think. Get what you can realize the goal is walk away quickly even with a small loss.
Vendor · Hammond, IN · Member since 2014 · 91 posts · 16 votes
8y
80k seems really low for a "multi-family." Gut rehab for an SFR in northwest Indiana would be around that new plumbing, electric, hvac and roof. Mentioning what neighborhood it's in in Chicago will likely help.
Chicago, IL · Member since 2017 · 49 posts · 5 votes
8y
@Jeff Burdick, I am talking about the tax assessed value. But as I also stated, my agent comped the property around the same price as well. Its in South Shore, 2206 sq. ft, 4/2
Rental Property Investor · Hoffman Estates, IL · Member since 2018 · 10 posts · 6 votes
8y
@Josh Rogers Depends on what neighborhood you bought in. If it’s a good neighborhood in the city, put in the work and money, there will be interest in buying it. If the location is bad, maybe cut your losses. There’s areas of Chicago I would never invest as they will never appreciate in value.