Duped in Dallas by $30k wannabe guru!

Duped in Dallas by $30k wannabe guru!

Hurst, TX · Member since 2016 · 192 posts · 114 votes
Earlier this year my good friend paid $30k to a Dallas real estate guru to finally get started in real estate at the ripe young age of 55. After the course, the gurus convinced him to put his entire retirement into 2 expensive houses in Dallas. Almost in the same block no less! Well purchase price was about 400k for each house, they wanted to put around 100k into each for repairs and sell them for around 700-800k. Sounds like a great windfall right?! Well that was in March. And they've hardly got any perspective buyers since. The gurus came with their own contractor crews and one of them was a brand new real estate agent so everything was "in house" how convenient! Well the contractors were terrible and the agent had no idea what he was doing, being a newbie and all. And at this point my good friend is praying to at least break even on these houses but even that looks bleak. So, if any of y'all has and advice for my buddy, or knows how to move high end real estate, please contact me at the earliest. I'd really appreciate it. It's hard seeing such a good man get abused the way he did. Thanks! Stevo
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Residential Real Estate Broker · Venice, FL · Member since 2016 · 11 posts · 14 votes
9y

I would fire the agent,  let them stay off the market for a month then list with a new, better agent. See what he or she says they should list for. Interview a few agents for this. this month is the slowest month to sell in most markets. Hopefully he does better than break even.

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  • Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
    9y

    Do houses on this block sell for 800k?

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    At the peak they did. They're currently valued around 750k on Zillow. They're off 75 and Walnut Hill in Dallas.
  • Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    9y

    Post up the addresses so we can see the rehab, listing presentation, and neighborhood.

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    7424 Meadow Oaks Dr Dallas tx, 75230 7132 Meadow Rd. Dallas tx, 75230
  • Residential Real Estate Broker · Venice, FL · Member since 2016 · 11 posts · 14 votes
    9y

    I would fire the agent,  let them stay off the market for a month then list with a new, better agent. See what he or she says they should list for. Interview a few agents for this. this month is the slowest month to sell in most markets. Hopefully he does better than break even.

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    Good advice, thanks! The only problem with taking them off the market is the 4K/month mortgage payment. He's in a tough spot.
  • Contractor · San Antonio, TX · Member since 2013 · 647 posts · 205 votes
    9y

    @Steven C. Suarez, sorry your friend got in this situation. I'd agree with going "out of house" to find someone not on his team, way too many moving parts in one little package there. Good luck and let us know!

  • Agent/Investor · Murphy, TX · Member since 2013 · 542 posts · 304 votes
    9y

    Already changed agents twice...  Looks like a jumble of high-end and lower end materials used.  A lot of stuff I recognize from Home Depot/Lowes.  I might run by and take a look at it later.

  • Dallas, TX · Member since 2014 · 3 posts · 2 votes
    9y

    Interesting.  I know agents with this group.  Which agent was it?

  • Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    9y

    It might help if you can identify the huckster, as well. The more the word gets out the easier it is to avoid them.

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    Garret Coates David Dachtera I don't know the exact names but I will ask my friend. They fired the original agent and hired the current ones outside of the group I believe. My friend really doesn't know I'm posting this and I don't know how he'd feel about me putting it out there. But I really want to help him at this point. Pride aside, it's a real mess. And yalls advice is really encouraging and appreciated!
  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    9y

    Couldn't pull the second one up but the first one needs to be staged. The great room is way too nebulous for a lot of people to even understand what goes where. Don't understand why they mixed cabinet colors and materials in different rooms and the MB carpeting looks cheap.

    Other than that, it looks like a decent house. I wouldn't say the finishes are high end but it doesn't really appear terrible in the pictures. Staging that house would go a thousand miles towards making it show better. My opinion only but the cabinet over the toilet in the one bathroom looks ridiculous. That would have looked better on an opposite wall or leaving it out completely. It's too "in your face". 

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  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    Thanks Jd Martin ... they did have it staged at one point. Ran out of funds and chose to keep the 2nd house staged instead. The 2nd house is my favorite. Very Hollywood look and feel to it. Here's the listing: See what I found on #Zillow! http://www.zillow.com/homedetails/7131-Meadow-Rd-Dallas-TX-75230/26838993_zpid
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    9y

    The front atrium landscaping is kind of lame, but other than that it's a nice looking house and reasonably well done as far as staging. 

    If the property has good traffic, the price is probably too high. Anything will sell if the price is right. What your friend needs to get back out of it is irrelevant to the sales price, so he might just have to take a haircut. That's unfortunate but also part of real estate. 

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  • Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
    9y
    I am in the same situation in California.We bought a property that should easily sell for 950k after repairs but my partners wanted to be cheap with the rehab and now no one wants to even make a lowball offer.Hard money loans are destroying us and we're looking at a minimum 50k loss or more.
  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    Brandon Battle geez, that sucks man. People say to just jump in and buy something. The bigger the buy the bigger the profit. But man is it easy to get burned. Especially if others are steering the ship wrong. Thank goodness for this BP site. Hopefully others can learn from mistakes made in the past.
  • Real Estate Broker · Manchester, NH · Member since 2014 · 630 posts · 420 votes
    9y

    80% of marketing is the price.  The more it languishes on the market, the harder of a time your friend will have selling it.  Get a reputable real estate agent to give you an honest and conservative valuation of the houses in their current condition and then cut the price to that number.  I know it might not be the best situation, but for every month it sits on the market, there are thousands of dollars in additional holding costs.  Aggressively price the property until it sells!  

  • Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    9y

    @Steven C. Suarez,

    Yeah - I'd tell your friend price 'em for quick sale - low as they can without losing money and get out from under 'em.

    That's a part the "guru" missed: making the exit strategy work.

    I usually advise: sell low, buy even lower.

  • Missoula, MT · Member since 2016 · 163 posts · 55 votes
    9y

    @Matt Lefebvre

    I wish all sellers trying to get rid of some real estate would do this. Iv seen listings that were anywhere from 6 months to a year or more just sitting on the market! (your house isn't worth what you hope it is dummy!) Just digging them selves a hole really.

  • Real Estate Broker · Manchester, NH · Member since 2014 · 630 posts · 420 votes
    9y

    Oh yes it can definitely be frustrating @Anthony Wienke.  What I see in my market, is that properties that sit for longer than 60 days have a hugely lower chance of selling than those that are priced correctly to begin with.  Even if the price is ultimately reduced to the "market value" for homes that languish, most buyers look at those homes and say "Gosh its been on the market forever, there must be something wrong with it" or they'll try and significantly lowball it.  

    Price it aggressively the first time, and you might even go over the market value if you get people into a bidding war!  

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    Matt Lefebvre I see there being bidding wars in the 100-200k range (I've been in a couple, Lol) but in the 700k and up range, do you see people bidding these up as well? In the Texas market that is. (700 is cheap in Cali)
  • Real Estate Broker · Manchester, NH · Member since 2014 · 630 posts · 420 votes
    9y

    Couldn't tell you for sure @Steven C. Suarez... while there definitely can be bidding wars in higher price points in any market, it really does boil down to how desirable the property is and how aggressively its priced compared to others for sale.  Do you know what the absorption rates are for homes in that price bracket in that neighborhood?

  • Hurst, TX · Member since 2016 · 192 posts · 114 votes
    9y
    First things first Matt Lefebvre , I need to Google "absorption rate" 😉 ...I'm still green.
  • Real Estate Broker · Manchester, NH · Member since 2014 · 630 posts · 420 votes
    9y

    I'm surprised BiggerPockets doesn't automatically insert a definition for 'absorption rate'. They do for acronyms like ARV or BRRRR.

    Absorption rate is a metric used to show how many homes are available in a particular market (usually broken down by price brackets), how many are under contract, and how many have sold in a certain time period.  Then you look at the amount sold versus how many are for sale, and determine how many "months supply of inventory" is currently available.  Basically meaning "If people stopped listing their homes tomorrow, how many days/months would it take to run out of houses for sale in the market?"  This can help you determine if a particular area and price point is in a buyers market or sellers market.

  • Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    9y

    Love that second house. I'd stage the first one. 

    Both need a price cut. 

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