All Forum Posts by: Andy Sabisch

Interesting and informative . . . . do have to ask if this was AI / ChatGPT generated content

As Bruce said, photos and options can make a listing pop.  We offer floor plans that most photographers can provide easily and cheaply.  Virtual staging is another option that has come into its own recently . . .  here are a few businesses in your area that might be able to look at the listing and see what is missing . . . and fix it for not much money

No Worries Photography

Square Foot Photography

True Homes Real Estate Media

As Chris said, they are not the magic tool they may have been a few years ago. They all pull from the same lists that 10,000 other people are using and owners are getting tired of the noise (I know I am with wholesaler wanna-be's bugging us on your rentals). I find the way to focus on deals is to find a quality wholesaler that deals in the properties you want to work with and let them spend the time and money on whatever tool they prefer. I have no problem paying a finders fee for a quality lead - the problem is a lot of those doing it now think they will be making money by under estimating the reno and over estimating the ARV so find one that is good on both and focus on the flip / rental rather than finding a deal with these over used tools . . unless you want to try wholesaling and then hopefully you approach it better than the majority of those out there

As several have said, at this point in the market, price sells. It is no longer a seller's market where a flip sells instantly. This is where over improving or having underestimated the reno costs and overestimated the ARV will be a death blow.

Understand that Zillow's Zestimate is just an approximation, when you pull up the map and see the values on Zillow, there is only one property higher than yours and most are $25K to $50K less. What did you have set for a sales price when you started the project? Did the reno budget get away from you? It looks like you started at $409K which is pretty high for that area regardless of the finishes . . . remember, never want to be the most expensive house in the neighborhood. You have had 6 price reductions since initially listing the property. How many showings have you had? Have you received any feedback from them? If not, I would be questioning if you have the right agent as they are trying to earn a commission without the work. Has your agent provided any suggestions? Did the agent simply list it at your price rather than providing a CMA to support a list price? If so, a flat fee service would have given you that at a fraction of the pending commission.

As far as the property itself, looks like you did a great job.  A comment is at least around our area, sterile white is no longer in demand - a pastel or light gray to contrast the trim stands out and yours is blindingly white throughout.  Too late to do anything about it now but you might want to see if that is still a look people are wanting.  Did you fill the pool in or was it that way when you bought it . . . seems pools in Texas might be a plus.

Did you pull it off the market and relist it to switch agents?  Taking it off the market and putting it back on three days later does not reset it.  Remember the public can see the price drops and it comes across as being desperate to sell.  Price right initially and it sells faster.

At this point I would suggest looking at the numbers to see what you have to sell it for to break even and then what the carrying costs are.  You might be able to get out without losing money and see it as a lesson going forward . . . remember, you need to buy right and stay within a realistic budget and projected list price (and realize that both can change in the bad direction).  

If I can toss out an option which is to get feedback from others on why the property has not sold in 5 months since the market is still positive there.

Try posting the address and the link to the listing if possible and we as a family here on BP can see if we can provide some specific insight for you

We have been using commercial loans (DSCR) for rentals with positive results . . . we are finding that the rates and closing costs we have been getting from a local bank are not available in a new area we are going to (out of state) and rates from those advertising DSCR loans are costly . . . love to find a lender that is able to provide better terms than what we have been finding. But in answer to your question, DSCR loans allow you to scale with properties that generate cash and do so without limiting how many you can have.

If a lender that offers DSCR loans has decent terms, love to talk . . . feel free to PM me.

Remember the saying that you make your money on the buy not the sale.  Overpay and you will be burnt on the back end.

Good wholesalers are hard to find . . . bad ones quite easy.  Many watcxh a few YouTube videos or pay a guru for the secret formula and know little about the process and even less about what reno costs or ARVs are.  We have received "deals" from some that were pure fantasy so you might need to find a better source to get deals from.  If you know ARVs for the areas you are looking in see how they compare to what the wholesalers are claiming.  Same for reno costs.  If they are far apart, move on and find a better wholesaler that can actually find you a deal that works.  There is a reason regulations are coming to wholesaling and those that make claims that they cant back up or hope a buyer will fall for their claims is the reason.

The thing you need to keep in mind is that there is more to a deal than the famous formula.

Do you have a solid reno cost or is the $30Kish a swag?  $30K goes quick in todays market so  you need to make sure of that cost - for a moderate rehab at your price point, that seems light.  You always need to have a contingency even if you are solid with your numbers.  We are doing one know that an $8,000 expense we had not expected but had set aside a contingency for You will ALWAYS have surprises.  

The ARV is another area where many first timers (and even seasoned investors) fail to have the current pulse of the market and then over price it and the property sits. The bad thing is if you based your reno on the higher sales price and are stuck dropping it to move it - carrying costs can kill the deal and if you have to sell, you are underwater.

You really need to come up with the ARV and be realistic - we undershoot the market and get deals locked up in under 2 weeks. Then get a solid reno cost and build in a solid contingency . . . we use $10K to $20 for most renos to address the unexpected which always come up. We have trades that can give us solid numbers and draw from past experience. Then look at closing costs, carrying costs for at least 3 months longer than you are expecting it to take and then the sales costs. When you have these numbers, you can build in your profit and see what makes sense.

Hope this helps - be happy to give you more details if you want them

The thing is the process to buy, renovate and sell is not that complicated although the Internet gurus will make it seem mystical to most and sell their services to navigate through the wickets.  Then there are those that watch a dozen YouTube videos and are ready to become instant real estate moguls.

Both find the pitfalls and unfortunately many are expensive ones that turn people off from the start.

Understanding the market you will be investing in is key and many are doing remote flips in areas they have never set foot in.  They look for cheap properties compared to their home area and think they have found a hidden goldmine when in reality, experienced flippers are doing their thing across the country.  So thinking you have stumbled across an untapped cheap market is a fallacy.  We invest in areas that without knowing the areas you can be in a war zone or a great area in the matter of a dozen blocks - investing remotely will never get you that intel.

Another pitfall is the reno budget (under estimate), the time line and carrying costs (under estimate) and the ARV (usually over inflated). A wrong call on any of these three can drown a project from the start. There have been stories here of newbies that could not sell in the window they thought at the price they needed to cover their investment. We have bought properties from these investors with supplies in place that simply ran out of time and money. Always expect a project to run into issues, cost more than expected and sell for less than expected and you will make money.

The biggest advice I would give first time flippers is try and get with a seasoned flipper in your area and see how the process works . . . buy a few lunches and roll up your sleeves if possible and it will be a cheap education that will save you a fortune in the long run.

It is easy once you get the machine moving but making sure you do not find yourself with the machine in flames at the start is key.

The best recommendation to anyone flipping especially in today's market is to over estimate the timeline especially when dealing with hard money which can kill you especially if you run out of time.  Remember a rehab on TV takes 60 minutes but even with a team, minutes turn into months and your profit can go out the window in no time.  Over estimate the timeline and you will avoid sticker shock or desperation when the note is coming due and it is not even on the market yet.