All Forum Posts by: Belinda R.
Belinda R. has started 20 posts and replied 90 times.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Patrick L.:
In reference to this one I'd definitely reconsider. If you took $50k the buyer would have a ton of equity in the house with a really low LTV. If you filed foreclosure the buyer could easily sell the house for more than the ~$20k left on the note and even if the buyer didn't you'd recover all of your unpaid principal, interest, fees, court & attorney costs, etc at the foreclosure sale or when you take the property back.
Patrick L. Good point! I never thought of it from that angle. Thanks.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Thanks everyone for the great advice!! The agent called last night and said the family is helping to raise the remaining $15k they need to fund the deal so we can close in two weeks. If they're not able to raise all the funding they need, after reading your suggestions, I will strongly consider taking the $50k and owner financing the remainder.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
@
Paul Timmins, I did reach out to online auctions but was told they only accept properties from private owners sold in bulk. Therefore my one house doesn't qualify to be listed on their site. So, I reached out to some local auctioneers and was told the min charge is $2500 to advertise and hold a live auction. If the reserve isn't met, Im out of $2500. I declined. Is that Barbara Cocohran in your photo? Wow! Her book is next on my list to read on how she turned $1k loan into a billionaire business! Were you at a seminar? Do Tell..lol! I really admire her :)
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Jon Holdman:
At this point you must completely set aside how much money and time you have invested in the deal. For buyers this is completely irrelevant. They're only going to buy your house if its a good deal vs. the competition. I've been there. I know its tough to list at house at a price that's going to be a loss. It just doesn't matter. That's water under the bridge. Price it right, get rid of it and move on.
Agreed :)
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Jon Holdman:
What's the market like in your area? That seems like a long time on the market if the property was properly priced. Price overcomes all objections. Seems to me like price is the issue here.
I've had a house on a busy street, and it was across from a high school. Both of these are incurable defects that require a discount vs. an otherwise identical property away from these defects. Further, only houses with similar defects are comps. If you're using comps away from this street you may be fooling yourself about the value. My bad deal had about a 15% discount for the busy street/high school vs. others. And, between the time we funded the deal (this was a fix and flip where the borrower defaulted and gave the house back to us) comps that supported a much higher value (about $215K) were stale and more recent comps supported a much lower value (only about $170K). So the comp situation just killed us.
You want to improve the house to be just above the neighborhood. Pumping extra money into it will return nothing because the comps just won't support the higher trims.
Sounds to me like this is a painful lesson. Cut the price and get rid of it. I'd have seriously considered that $50K with a $15K carry back. I'd certainly do that over a refi/lease option sale.
The agent just called back stating they are going to try to borrow the money from friends and relatives. I just want to recoup my losses and run! I figured with the rent to own strategy, I could rent the house for 3 years and still sell it at $75k and make a profit all while retaining 100% interest in the property until it sells.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Kirk R.:
@Belinda R. If you are willing to accept $65k why do you have it listed for $85k?
Maybe list it for $75k. Be patient as tax time is right around the corner and is the best time to get it done IMO.
The price has been reduced to $75k. I mistyped.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @J Scott:
Would you be willing to take $50K in cash and hold back a larger loan if the buyer were willing to pay more? For example, maybe the buyer will pay $80K instead of $65K, and then the cash flow from the loan payment might make it worthwhile for you.
Just a thought...
Btw, I assume you have an agent who is listing and marketing your property for you, correct?
I do have an agent. I did consider taking $50 and selling the house for $70k. Two issues I have with that is that I want to retain 100% interest in the property until it's sold. Second, After consulting with an attorney he advised against it. If the deal goes bad, I would have to foreclose and that could tie up the house for a year. I would only do a seller finance if I could recoup 100% of my initial investment up front of $65 and let the cards fall where they may.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Account Closed:
Greetings
What I usually do in a tough market is to start a marketing campaign myself. Sometimes just putting a for sale on the lawn is not enough especially in certain areas. The last flip I did, I marketed it myself on CL as a rent to own and I showed it to many people and i would prequalify them myself and one person in particular had no idea that he was so qualified to buy a home (Married couple, two income, state jobs, decent credit and a bunch of $ in their 401k). In the end I took a rent to own couple and converted them into qualified buyers and I have doing the same ever since.
Good luck
I'm trying this strategy now. The house is listed on CL as rent to own. My realtor knows.. Lol.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
Originally posted by @Jeremy Tillotson:
@Belinda R. have you tried to offer a free home warranty or something the feedback was good whats stopping them? What will it rent for? Maybe sell it as a turnkey? Just my .02
Tried all that :) the house bring on a busy road is the main drawback. Realtors and buyers say the house looks really good.
Post: Newbie Can't sell Flip!
- Investor
- Huntsville, al
- Posts 105
- Votes 34
BL: Purchased HUD property Dec 2013 for $32k, rehab costs and expenses were$34k. thats 66k cash of my own money in the deal. The good thing is that I dont have any holding costs other than utilities and property taxes, but $66k is still alot of money for me. Listed property for sale at $94k and have reduced price $85k since its been on the market since March 2014. All the feedback was great but no offers. Received a cash offer for $65k last week so I asked for proof of funds. I figured, I'd take the loss and take it as a lessons learned. Last night got a phone call from the realtor telling me the buyer has $50k cash and wants the seller to carry back $15k....NO DEAL!
Very frustrated here. Lessons learned from this disaster is to never over rehab. Never buy a house on a busy street. Never buy a house without a garage. My strategy was to appeal to first time homebuyers and make it a "wow" house to distract it from being on a busy street. WRONG!!!...LOL!
Current Exit Strategy: Do a cash out refinance. Pull out equity and do a lease option agreement. I don't want to be a landlord but its looking as if my options are slim.
Any other suggestions? Exhausted!