frustrated individual

16 Replies

I have house that I contacted for 8 thousand. Comps have houses in that area selling , on avg 59,000 . It need 20000 in work and I already have a renter ready to go in when is finish. I can't get it to sell, not even at 9000. Am I missing something? 

It's directly behind the police dept. But it's not the best neighborhood (not the worst either). Been marketing on Craigslist daily.can someone tell me where I missed the mark? 

Maybe you have it priced too cheap. Buyers are thinking it's not worth their time.

Raise the price and see what you get.

You can always take less..

First good job in locking it up that cheap! Absolutely bump that price up and it should get more bites. Funny how cheaper doesn't always appeal.

I was at 15000 but I had to come on down because nobody was interested. Them I come down to 12,000 then 10,000 now my 30 days are almost up so I just wanna get what I can get from it

@Everett Marshall I would get a realtor, if you can have 28k invested for a 60k resale why not partner with someone and split the deal. Get a Realtor to go over what needs done to property and what it can sell for. Then get a GC to bid those items needing done (I would get 3 bids) You may have repairs too cheap. I had a guy tell me a house that needed all new siding, furnace,plumbing and general remodel was 10k in work. It was like 12-13k in materials alone. 

Houses are selling in that area at 59k, and this house needs about 20k...that would put the selling price around 39k...maybe 35k for a quick sale.

Your high mark was only at 15k?  With these ratios, there is little if any difference between 9k and 15k.  The perceived value is the same.  The house has problems.  You need to put the price at 35k

That could be a great owner finance or lease option deal at that price. Advertise as a handyman special/ fixer upper with some equity and market more towards the retail side vs. investors. You'd be surprised at who has cash at that price point as a first time home buyer. Come up with the 8k, close it and make a huge profit financing it out over the next few years. Cash flow property, no repairs, no maintenance equals pretty sweet deal to me. Just think you could possibly get 8k as a downpayment, all profit from there.

thanks for the advice guys. I will raise the price. Time is of the essence. I have 1 to it sold

I'm just curious as to what the 30 day time limit is for? Is that a short term goal you've set for yourself? What happens if you don't sell it in the next 24 hours?

my contract between the seller and I states I have 30 days to close on the property. If I don't close the contract is void and i loose EMD

Ouch. That sucks man. You're really between a rock and a hard place. I don't have the experience as to what to do with the contract but my intuition from my customer service background just says to talk to the seller, explaining your difficulty finding an investor & request additional time.

Something else that may help you is www.meetup.com

I'm in a REI group in my area and it is very active. I see deals being sent via email all the time. I don't know how many get acted on, but I think this may be another avenue for you to try and market the deal at. Marketing is huge in real estate just like all other sales related industries and it seems like this may be where your weakness lies.

Is Craigslist the only method of marketing you're doing? If you're looking for a local investor, I had good luck with bandit signs for my moving my deals. Just an idea @Everett Marshall

Originally posted by @Everett Marshall :

my contract between the seller and I states I have 30 days to close on the property. If I don't close the contract is void and i loose EMD

Who has the EMD? Seller or your title company? Always give your EMD to the title company.

Look, I think you know this deal is not worth $39K (as was suggested above) because we don't just subtract the repairs from ARV to determine value. The default REI "formula" is (ARV x 70%) - REPAIRS = OFFER.  So IF the house was really worth $59K ARV and IF the repairs are only $20K, an investor (cash buyer, rehabber)) would value the house at $21,300.

If you got it at $8K and the other numbers are real, you would have a heck of a wholesale margin on this deal.

BUT it's not selling, even at $15K.

The problem is not your price being too low.  I'm guessing your numbers are wrong or there's something you don't know about this house that others do.  What's the history of it (what did it sell for last & when)?  What's the tax appraisal value?  There are some UGLY NUMBERS somewhere that people are finding when they research the house.

What you've discovered is this house needs a lot more work that you thought and it will sell for a lot less than you thought.  You need to go back to the seller and tell them you need to back out because the numbers don't work and your partners are unwilling to fund the deal.  Tell the seller and title company that you are canceling the deal based upon the property failing your post-agreement inspection - or use whatever other contingency you have in the contract.

Sellers understand that sometimes the numbers don't work and deals fall apart as a result. They won't like it, but most are not hard asses about keeping your token EMD. If so, lesson learned.

@Everett Marshall

I will try to partner up and fix it. Then keep it as a rental (if you already have a tenant).

If not fix it and sell it. 

@Everett Marshall

Agreed with others above - why not try to get an extension on the close date, and then partner with someone and rehab it yourself?  Or look to a Hard money lenderl?

Keep us in the loop and good luck!

-Tom

I really am not ready to get into rehabbing.  I don't have the Capitol for that yet. I asked the seller for an extension but he says if I can't close he has a buyer that will for the same  price I paid, so that's out.  I'll give it a few more days then I'll just back out. On to the next. It's a numbers game

If you're looking for feedback why it won't sell, agents can be good for that. And open houses. I went to an open house once and another buyer confided in me that she wouldn't want the house because the bedrooms were on different floors and she wants her kids to be on the same floor at bedtime. It's not even something I would think of because I'm not a mom. Agents can also relay feedback after they show the house to clients. 

How did you arrive at the amount for repairs? Maybe others see something you don't, maybe people think there are structural issues that your appraiser/GC didn't pick up on (an architect could tell you if there's structural issues).

Some other things that could affect it are the school system, crime rates in the area, amount of privacy, and little things like whether the driveway is on a busy street and it's difficult to pull out of the driveway. Savvy buyers will look up houses on Google maps before they go out to see it. Also, have you tried putting a handwritten "For Sale" sign in the front yard? 

As others suggested, it may be worth it to consider a different strategy instead of beat yourself up for a strategy that isn't working. Maybe lease-option. Maybe find a partner and rehab it instead of wholesaling it.

Maybe you can add pictures to this thread in case that helps people give better feedback?

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