Lakewood, NJ · Member since 2015 · 17 posts · 3 votes
Hi BP and Thanks so much for all of you on their, previous, current and future helpful information,
I purchased a very small 2 bedroom 1 bath 850 sq ft ranch,
Fixed up entire house inside-out.
Had in a span of less then 2 months about 35 showings!
All potential buyers/brokers say, the layout of the house is not good, please see below, the problem is i can not change it as all the plumbing is only in front of the house.
What will make this house sell?
Reducing the price? (all say price is OK) Staging? Open house -Auction off with minimum reserve? increase buyers agent commission? PLEASE Help, Thanks in advance!
Washington, DC · Member since 2013 · 35 posts · 18 votes
10y
Hi Jacob,
First you need to know what people buy in the area you are targeting before purchasing a property for a rehab: you price points, house size and type and any other information that a good real estate agent should be able to provide. But that's for your next project. Also find out the average DOM for the houses like this in your area and get a better idea what to expect. If the av DOM - 180 days, than you are still fine. But normally that's another thing to learn prior to getting into a project!
Normally 2 bd/ 1bath is not the best deal for a family, of course it depends on your market but usually people want 3 bd/ 1 1/5 - 2 bath.
Also keep in mind that it's always good to have a 2nd exit strategy in case the house doesn't sell!!! What is yours? Maybe you should target landlords (other investors) or even keep this property as a rental yourself or do a lease option on it...
In terms of increasing the agent fee, I don't think it will change anything. You have enough showings. But the question about dropping the price, is the one only YOU can answer. Can you afford that? How much did you spend? How much are you loosing each month by letting the house sit on the market? How much longer can you let it sit there?
And can you afford to spend anymore on fixing the layout? And will it give you the results you want... No one knows, so consider 2nd exit strategy, I think
Good news! that the comps you found are a whole different animal, as they are located in a 55+ community with HOA and other fees that is not the case with this house.
I just hope you don't decline/buy a deal with such due diligence
Thanks again and i apologize if i am to blunt but this nothing personal all business :)
You can be blunt, you're the one with the house not selling. That's just took any buyer over 55 out of your group of candidates if they can do better near by. Two were not in that community. As several have said above if your price was close you would have at lease received offers.
Thanks for your insights and i'm not offended :) i reached out to here comments, positive and negative alike, its all for my benefit.
I did fix up some stuff after the photos were taken, plus the kind of people buying here are very simple and not looking for the 2016 latest model car or house and not complaining about finishes, its just the layout that is in the way.
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
10y
Adding garages is usually not worth the mone unless it's a high end or simply a "garage neighborhood". As mentioned, the biggest issue is the house is too cut up. If you opened the kite into the LR and had open the wall that separates the LR from the foyer the space would have felt much bigger. You didn't have to take all the way to the ceiling,in the kitchen you could have built a peninsula and framed put a header across the space to avoid the ceiling height issue as well as save money. I would take the foyer wall to the ceiling if possible, if not then could do columns with bookshelves or something. The rest of the house looks fine, I don't see a plumbing issue.
Investor · Linden, NJ · Member since 2016 · 84 posts · 11 votes
10y
I think a major problem you have is NO curb appeal. Add a nice railing to the front of the house. Add bushes around the front. Lay new sod down. Knock down that fence. Maybe put a new door w color or paint the existing one red. Is the roof in good condition? Doesn't look good in the pics. I would've knocked down the wall in between the kitchen and maybe dining room, try to open up the space as much as you can there, that wall makes everything feel choppy as well as the foyer wall? Open concept is what sells easier nowadays. I would add some nice hardware to the cabinets. After you do all that have an open house. Good luck!
Investor · Gloucester Twp , NJ · Member since 2016 · 14 posts · 0 votes
10y
Don't let plumbing stop you from changing the layout, get multiple plumbers estimates and play them against each other. Or buy a $10.00 do-it-yourself plumbing book. Anyone with simple handyman skills can get them pipes moved. If its going to hold up the sale of the house you will find a way. Necessity is the mother of invention. I would however recommend you get a professional to handle any gas pipes. But don't let them charge you more then $150.00 from X plumber.
Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
10y
@Jacob F. I think you're learning one of the most important things about flipping - never flip something "odd". If your market doesn't typically have 2 bed / 1 bath 800 sf homes flying off the shelves, it's best not to flip them. You need to sell your product to the largest buyer pool possible. Along with that, the work looks subpar. As others have mentioned, the tile looks very dirty/sloppy. The backsplash is peeling off the wall in the photos. The paint choice isn't what I would pick, colors are trending away from neutral tans. Depending on what your costs area, I would slash the price immediately, or consider renting it. I would also consider repainting at least some of the rooms to give it division. Last but not least, staging always helps. If you've had that many showings, it's likely price/condition. Reduce the price, paint some rooms, make a few repairs, stage it. Good luck.
Residential Real Estate Broker · Manhattan, IL · Member since 2016 · 3 posts · 1 vote
10y
I agree if you can take out those walls that should help. I have a 600 sq ft house and that's all I hear is its small. Yes it is. But in the layout you have furniture won't fit like my 600 sq house.
Investor · Denver, CO · Member since 2015 · 570 posts · 521 votes
10y
There is nothing wrong with the layout, the house is just rough, either spend the money to bring the level of finish up or reduce the price. The tile floors are about a 2 out of a scale of 1 to 10, the kitchen finish is about a 6.
It's always the price. When the value doesn't match the price the house sits until you increase the value to match your price or you lower the price to match the value.
Investor · Ball Ground, GA · Member since 2014 · 55 posts · 16 votes
10y
The house looks nice in the pictures. Looks like you did a good job with new finishes.
Just a quick cursory look at recent sales in the area shows that you're an oddball in terms of sq footage and # of bedrooms. I only see a handful of properties under 1,200 sq ft and a few of them are forclosures and pre-forclosures. Looks like another 2/1 flip down the street sold in '14.
Can you add some sq footage to the home? and a bedroom & bath? I would imagine construction costs in that area are kinda high so the numbers might not work. It looks like 3/2's in that area in the 1200-1500 sq ft range are selling in the low 200's. Again, that's just a quick cursory look at recent sales on Zillow. I don't know your area very well so I could be totally off.
Investor · Boulder, CO · Member since 2015 · 61 posts · 17 votes
10y
Hey Jacob, I am familiar with the area. I went to Toms River South. My mother lived in Whiting. Is this to the West of Walmart or more to the East.
1) Buy a couple of those Whiskey barrels and put them on either side of the front entry with some flowers in them.
Fix the back fencing because it looks shabby.
The yard also could use some attention if you want to sell it to a homeowner. Since it is so huge, I would just landscape a small area around the patio. The rest you could just mulch. Spray some roundup to get rid of the weeds on the patio.
I personally like to see houses when they are empty. It is a great starter house and I would advertise it that way. First time home buyers can just put 3% down right now. That is a steal!
(I cannot believe how cheap homes are there. This house would be double/triple in Colorado)
New Haven, CT · Member since 2016 · 90 posts · 99 votes
10y
I don't know why, but for some reason filtered pictures turn me off. It makes everything look so perfect when you see it online, then when I get there, I suspect that bright glossy finish over everything kind of just disappears. I know it's a weird thing to take aim at, but that's just me. At first, when I looked at the interior I thought wow good job, then when people starting pointing out how things were off or not done well, I looked more carefully. The kitchen tile kind of looks like a very low end budget job, and the hanging cabinets around the edges looks bad (sorry). Also, what is next to the oven on the left side of the wall? Looks like a heat shield or something, but I am not sure in the pictures. Fix the fence outside and put some more detail into the landscaping. Also, what are those white enclose window spaces in the house? Is it a window closed off into shelving? I think it's perfectly fine how you did the place if your goal was to save money and just glaze over what was previously there, but the price seems high for the comps in that area. It would be helpful to know purchase price + renovation costs, but I guess you don't want the sellers to know that.
Sorry if I was harsh or didn't offer anything new or useful. Just my 2 cents.
Looks like you got plenty of advise on here already, but I thought I might throw in my 2 cents as I have just flipped my first house that was the same stupid problem... 795 sq feet 2/1 lots of showings and a few rather weak offers. (Buyers could not actually qualify for financing). We held the place 10 months through the winter.
Let me just tell you what I should have done last fall...
Reduce the price!
We still made 22k after holding costs but we were to confident that it was worth more based on comps. But it was to small and funky.
There is a word for houses that sell fast.... Cheap!
after reviewing all the posts, most people mentioned the price is an issue, even though the potential clients didn't mention anything about the price, (maybe because they know they cant get any home for such a low price in the entire neighborhood)
Will drop the price and fix-up the small stuff will not start moving walls, new kitchen floor, etc. and keep you all posted.
My question is should i drop every 2 weeks a couple of $$$ or in 1 shot 10-20K?
Investor · Linden, NJ · Member since 2016 · 84 posts · 11 votes
10y
Why not fix it up, lower it 5k and do an open house as soon as you lower it. We sold our flip during our first open house. Just make sure you fix everything you need to fix. I noticed details are very important.
Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
10y
Jacob, I fix-and-flipped a similar house. The inside was immaculate but the outside had boring siding and the layout was a little weird. I had to lower the price to sell it.
I would definitely not redo the layout. It looks immaculate now and you don't want to mess with that.
De Pere, WI · Member since 2016 · 83 posts · 39 votes
10y
I have to agree with the others; your price is way too high. When you look at price per square foot for what is selling in the area you are $30-40 above that price; and although your flip looks nice, there is nothing justifying that price (no extras; nothing extravagant or special that stands out). I know the pictures make it difficult, but where is the refrigerator? Where is it supposed to go? I agree with others in trying to open up the space... even as simple as taking down that breakfast bar. I definitely see what you were attempting to do, but if the refrigerator is supposed to go in that same space, I just don't see how a decent table would fit either... it just makes it look more like an afterthought...
One cheap fix is, what is behind the bathtub/shower in your picture? From the picture it looks like wasted space. Perfect place to put shelving! Cheap and easy! Sometimes you need to create the illusion for the buyers because not everyone has the same ability to see themselves living in the space (also if you can afford, a little staging would definitely help out some of these spaces).
Also, although the landscaping looks cute, the rest looks blah... I am hoping grass is in the process of growing and it was just too early??? But it looks like a lot of dirt from the photos. Love the previous comments on ways to spruce things up outside, definitely heed their advice!
Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
10y
Sometimes you buy a property with great plans in mind and those plans to pan out. You need to have 2-3 exit plans in mind before you buy the property because life doesn't always work out as we would hope?
I would offer it as a lease option or rent to own, or maybe even a owner contract type situation depending on your tax status with the IRS (Dealer status?). I like all these scenario's better than just renting it. You can collect a down payment or option fee, and because they have skin in the game, they generally take better care of the property. If they default and you don't want to work with them anymore, you can get them out and do it over again. The last scenario I would go after would be a straight rental. But that's just me.
I like to get as many advantages as possible, so if you lease option it or rent to own it, you get the tax write offs and the depreciation, but you are responsible for the repairs. Bone up on the landlord tenant laws in your state - area and put in the contract as much of the repair requirements that you can legally put on the buyers side of things. By doing these things, you get all the benefits while minimizing the risk and costs.
Real Estate Investor · chicago, IL · Member since 2012 · 1k+ posts · 231 votes
10y
like others said, fix up the fence, paint the deck (you can do it yourself); put crown molding up in the home; stainless steel appliances would've been nice and not that much more $. got some of that colored paint cement and paint the frontway/stoop. someone can reseal the asphalt driveway for $50-$100. tile the bathtub; change the closet knobs. have you called the agents who have walked thru for feedback?
@Jacob F. If you are getting foot traffic it is the house, such as features and condition.
If you are not getting any foot traffic or interest at all, it is the price.
Joe, I like your idea in general, but there is the sales model in high population areas like the north east where the buyer may not know the whole area and may have unreal exceptions on price points and house size. The agent puts together say five potential properties and starts with the worst condition or highest price or both. Never expecting that property to be the sale. It's used as a expectation adjuster. The last two or three should be what the buyer can afford and like if the sale agent has read them correctly from his or her interview. This house is certainly not in bad shape, many think it could show better with some changes, but not bad shape. I'm not suggesting this is the case but without knowing what else they looked at it's tough to tell. If this house has an agent they should be able to follow up with those who have brought clients through for some feedback. I'm sure the left coast has some of that too.