I'm in to my first year of flipping and just finished my first rehab in a property in PA can't get any bids close to what I'm asking - two price reductions later and just hear crickets. Thinking of just renting it out and cash out refi, however since it's my first refi, rate is high and getting 70% LTV. Interest only for first year until I have a tenant and credit score goes up then convert to 30 yr fixed at lower rate. Advise? Should I keep on market and hope for the best or move forward with the refi? FYI - I own clean and clear.
What's the issue with the property? Simply overpriced or was there something about your rehab that isn't appealing (or things were concealed?).
The honest answer there may elicit / motivate some action to stimulate demand.
Other than that, the numbers don't lie. Look at your returns on both sides of the decision... Why not post them here so people can look and weigh in?
Nothing concealed because there was nothing left to conceal. New plumbing, sewer, electric, HVAC, concrete driveway front walkway and front patio (covered). New concrete rear patio, new exterior walls, new insulation compliant with IRC 2009 code. Two baths - one tile shower stall, one tub surround. New kitchen with granite c/t, tile floors. The list goes on. All new framing nothing left of original house. Asking price right in line with comps. I'm thinking my real estate agent sucks...
I can't put real numbers up but these numbers are directly proportional to the actual. Bought for 100k, rehab for 104, total investment 204k. Asking 215k. Refi offer: (keep in mind my FICO isn't the greatest but is increasing), 70% LTV, 5% cost - 1 yr. interest only until FICO goes up and have tenant. Then put me into 30 fixed with 75% LTV at much lower rate.
Thanks in advance for your responses!!
Realtor does make a difference..but so does months inventory (supply) and DOM (carrying costs). I sat through a deal review and it all looked great except for these factors. The coach said don't do. Likely because the result could have been same as yours. And only making $15k leaves no room for contingencies. Summertime the hard numbers are outweighed by market conditions.