All Forum Posts by: Andrew Taylor

What kind of work are you looking to have done, @Mark Coleman?

Yeah, I'm not super happy with the "fish-eye" photos. I wasn't there the day the photos were taken, so I don't know if it was an actual professional (which I kinda doubt) or the realtor herself with an iPhone (which I kinda suspect). If/when we go through the unlist/stage/relist process, we'll do a better job with the photography.

Again - thanks to all of you for the thoughtful replies. I once read a quote by Stephen King that went something like, "Show your work to everybody you can, and ask for feedback. If they all say something different, you can ignore all of them. But if they all say the same thing, then you need to fix it."

What I'm hearing is that pricing and staging are the two big issues. I'm leaning towards doing something akin to what @Steve Vaughan mentioned in his post above: remove it from the market, stage it, set the price to whatever the comps support less commissions, and then re-list using FSBO/Zillow etc. By doing that, my break-even number actually drops by about $10k, giving me some more breathing room.

Question on staging: is it normally left staged until it sells? Or is it staged just for photos and an open house? Something in-between? I've never done it before, so I'm not quite sure what I'm getting into.

Actually the black countertops were a conscious choice. We felt like the rest of the house had such a 'cool' pallette that we wanted something that popped. They're actually really pretty (to us, anyway) figured/veined quartz, and they cost less than granite.

I actually wouldn't mind refinancing into a long-term loan and renting the property until the market improves, but I'm not having a lot of luck there. Maybe I just don't know where to look. My hard-money payoff is about $321k, so I've got a significant amount of equity in the property, but I'm being told (by the one lender who's answered me) that I can only borrow up to $260k - and only after I have a tenant in place. That's less than I paid for the house when I bought it and, obviously, doesn't even pay off my hard-money loan.

AirBNB would be an option, but I'd have to furnish it, which I'm not in a position to do. Same deal with corporate housing, although if I could get a long-term(ish) commitment from a corporate housing tenant, I'd be tempted to figure out a way to furnish it. I'm not opposed to owner financing it for the right buyer (that's actually how we put together the cash we used to buy this place), but I'd still have to refinance out of my hard-money note. Not sure how that deal would work.

This is a cautionary tale for a different post (deal diary, maybe), but we made some stupid mistakes and managed to not only bust our budget, but also blow completely through our cash reserves, and now I'm paying the price in Tums and bourbon. (The mistakes weren't construction-related; rather, they were project management-related - taking too long to complete the rehab, scope creep, etc. Stuff I've read about around here a hundred times, but didn't realize it was happening to me until it was too late.)

Thank you all for your thoughtful input. I'll address a few issues, in no particular order.

I can't really fire the listing agent. I've signed a 180-day listing agreement, and I'm going to end up paying her one way or the other. FWIW, it's kind of a full-service flat-fee deal, where you pay on a graduated scaled based on sale price of the home. Total nut there is going to be $4,950, which saves me about $10k in commissions on her side. She deals with photos, lockbox, negotiations, MLS listing, etc. She's quick to respond when I have a question, I just don't always get an answer as detailed as I'd like.

I haven't addressed it with my wife yet, but I expect we'll go this weekend and spend some time & money on accessories for the property. I've blown through my original rehab budget and nearly all of my reserves, so there's no room for a full-on staging, but we can put a few hundred dollars of knick-knacks in to spruce things up.

Regarding the appliances, it might not be clear from the photos, but there are brand-new black stainless appliances in the kitchen. It never occurred to us to install a refrigerator, because we've never bought or sold a house that included one (unless it was a POS left by the previous owner). In fact, I work for an iBuyer, and I'd say 95% of the homes we buy and sell do NOT include a refrigerator. That being said, we're not opposed to putting a unit in there to fill the hole (although it likely won't be black stainless).

Here's a link to the listing: https://www.har.com/s/10C96289...

I spent a lot of time checking out the other houses on the market in the area, and tried to make ours match in overall finish quality. I would like to have installed higher-end wood floors but we were already over budget so I had to go a less expensive route there.

Our realtor has been, uh, less than helpful. She refuses to answer a question re: pricing, or gives an answer that makes my eyes roll. Example: "A pool doesn't add any value. Lots of people don't want a pool." Which to me is as stupid as saying, "Extra square footage doesn't add any value because a lot of people want a tiny home."

When I ask her about pricing, she sends a CMA. I can look up comps myself; what I need is an actual professional opinion. She did the same thing when I asked her about potential rental rates.

I asked her opinion on lowering the price, and she said I was still marketing to the same shoppers at $479k as I had been at $499k, because people search for price ranges that end in 00, 25, 50, and 75 - which kinda makes sense, until you look at real estate apps where the search criteria are either every 10k or every 50k.

The work has been well done. I've been a builder in Houston for 20 years - I didn't just watch a few episodes of Chip & JoJo and decide I could make a living at this. As someone said above, I think I know what the answer is... It just stings.

My wife and I just finished our first flip. We put the house on the market about a month ago and have had almost zero traffic (two showings). Empirically, I know this means it's overpriced, despite an initial listing price that I *thought* was under the market, and two price drops since then.

We've also listed the house for lease but aren't getting any bites there either. Again, I think I've got it listed at or below market rent rates but so far, crickets. The house is in a good area, has been tastefully updated, never flooded, has a pool and sits on a corner lot.

I thought the house was probably worth $515k, but we initially listed at $499k to capture the "below $500k" searchers. Dropped the price to $489k after about two weeks, then stopped again to $479k after two more weeks. I can drop it as low as about $460k before I'm in danger of losing any money on the deal (I've got somewhere between $120k-$170k of equity, depending on actual selling price).

My question is, what now? Should I try to refinance into long-term and lease it out until the market improves? Drop the price again? Wait it out while I continue to make $3k/mo in interest payments? Some other option I'm not seeing? Obviously I'd rather not lose any of my cash investment, because losing sucks and also I don't want the wife to rescind her blessing with respect to my investing - but I also don't want to cut off my nose to spite my face. I'd rather lose a few thousand dollars and chalk it up to a learning experience than lose all of my investment and not be able to try again.

@Rolando Caceres I did read a lot, but I meant that I learned the hard way to ask those questions up front. You'll need more cash than you think when you're getting started.

What are the draw inspection fees? Amy limit to the number of draws? Any mandatory "rest" period between draws (i.e. we won't do a draw within six weeks of your previous draw)?

If you're just starting out and don't have a lot of cash reserves, these questions are almost more important than the interest rate/points/fees questions. None of that matters if you can't afford to have any actual work done because your lender won't release the money (that you're already paying interest on).

Drawn balance interest payments are what you want. If you're paying interest on the entire amount from day 1 then the lender has no incentive to disburse the remaining funds.

Ask me how I know all of this...

@Jeremy Hicks Define "work with investors." That's going to be the catch, I suspect. Builders won't give you a deal because you're an investor; to them you're simply another customer - likely one who's more concerned about price than anything else.

You might be able to work out a deal where the builder shares in the profits at sale in exchange for a lower margin on the construction, or some other funky profit-sharing arrangement, but I wouldn't lead with that offer unless it's an especially juicy deal.

I'd start by hiring a guy you feel comfortable with and then building a relationship. Show him you're reasonable, trustworthy, and interested in building a mutually profitable partnership, and you'll have a valuable team member that can help you in lots of ways beyond just building new houses.