How to digest this deal

Question

I posted about week ago regarding a fix/flip deal I'm in.  1st year flipper here, started with 3 mobile homes in rural town in Illinois used my own money.  Leveled up to SFH- bought my 1st SFH near Tampa.  I used my $ and also HML.  I listed it in June had an offer 2 weeks later- buyers walked away over sinkhole stigma.  Now here we are almost September and I have another offer well BELOW asking.  I've dropped from $274K to $259K and they low balled me.  Long story short I will be BREAKING EVEN accepting this offer.  Trying to look at the silver lining.  I had no mentor, no partner in the deal other than my HML, no peer support, fought sinkhole stigma, worst time in real estate market ever ESPECIALLY FLORIDA, buyer walked away, pop up fixes with HVAC system AFTER renovations were completed.  I also never fixed & flipped anything until July 2024 with the mobile homes.  I haven't really lost any money accept the $5K with the mobile homes.  Trying to NOT feel defeated.  But clearly we know all the risks and effort it takes from start to finish.  I bought the SFH April 2025 planned for 3 months and obviously the market tanked around May....  I feel like I'd give it one more go and see what happens.  Hell of a tuition.  How else would you all look at this deal?  SMDH.  TIA!!!!

Jules Aton · Answer

Agreed it is tuition. Doing your first SFH flip out of state is a big undertaking. And in Florida, well...

If your place has been on the market since June I would take the deal on the table now and walk away with the knowledge you have gained as your profit.

Kay Sam · Answer

@Jules Aton

I believe it's a bit of all of the above.  Buyer supposedly said, there were various items on the 4 point list that were too much to fix.  We offered to fix-once we knew what it was.  Buyer decided he'd throw away his $600 inspection fee & "keep looking because he's not in a rush."  So to me it sounds like he had a bit of cold feet & perhaps 4 point issues being a concern.

Trying to get a copy of the inspection & or get my own done.

Jules Aton · Answer

I’m sorry to hear the second offer fell through also. Did the buyer get cold feet and purposely throw the deal? If not I wonder if it would have made sense to agree to what they asked in order to get to closing? It sounds like no easy path.Hopefully things turn around soon.

Kay Sam · Answer

@Jules Aton @Doug Smith

So I was hopeful about the deal I had making it to the table & the buyer's have pulled out again.  This is my 2nd offer being signed since house has been listed in June, where buyers pulled out.  Both different reasons: #1 was the sinkhole issue, #2 now "4 point issues" that "were too many to fix."  I am basically out of time in ab out 20 days to get this house unloaded.  The this home is going back live today at same price.  We're going to call an inspector so we can have a report & fix anything that might be on there to get ahead of any future reports.  The problem is I have NO TIME to waste.

Other options such as LTR, STR will not work numbers wise to cover monthly carrying costs.  The best option I had to recoup has been market price.  I don't want to foreclose clearly.  DSCR loan is not really an option as my TransUnion credit score is 639 & most want 640 or 650.

What else can I do to get my money back & move forward?

Kay Sam · Answer

Thanks for the clarification.  I am dedicated to refining my approach & getting to the level where I can pivot easily & have more capital overall. Florida will see me again.

Doug Smith · Answer

Hi @Kay Sam, It appears we have a ton in common. I've been a lender and investor in Tampa for 30 years, but I grew up in a rural IL town myself...about 35 miles SW of Springfield. I had been a lender/banker for my entire career, but started investing around the last crash. Most of what we do are ground-up spec construction deals of single family homes or heavy flips. We'll hold for a period if we can't sell them, but we typically don't hold. We've won, we've lost, we've cried, we've laughed, but were still here. I'm going to PM you. Since we're both in Tampa and we both have the rural IL thing in common. Perhaps we meet up for coffee and you can pick my brain. I'm not a "hotel guru" that charges you to take courses, but I am happy to connect and be a sounding board. I very much look forward to it.

Kay Sam · Answer

Hi Jules. I'm definitely taking the deal. With your " ..." regarding FL are you referring to the slow market or something else?  Yea I thought things were moving but it slowed terribly. I'm thinking of Dallas area next. Thoughts?

How to digest this deal

Most Popular Reply