Well, I have been working on this rehab for quite a while now. I initially closed on Feb 14th and began renovations myself with friends and family. Looking for any criticisms as to why I am having no luck selling or anything that I should be doing to improve.
Here are some pictures:
http://bubbleshare.com/album/32128.6cd3fa41636
I have the house priced at $158,000 which I think is priced competitively.
I did an entry only MLS listing, am running classified ads, and Craigslist ads.
I have tried to get feedback from realtors that have shown the property and have said that everything looks great but I have yet to have one single offer?
Getting very frustrated. Any advice, criticisms, comments are welcomed. Thanks
For anyone that is interested I will also give some info on the numbers.
I purchased the property for $126,500 as a HUD home.
I put 5% down and financed $120,250.
I have put approximately 12k into rehabbing.
I also have the holding costs associated with the mortgage, utilities, and debt financing as rehabs were put on credit cards and LOCs.
Here is the house on realtor.com
http://realtor.com/FindHome/HomeListing.asp?snum=5&frm=bymap&nearbyZp=&lid=
Enter+MLS+ID&pgnum=1&ss_aywr=&st=CO&mls=xmls&mnbed=3&js=on&mnsqft=
0&fid=so&vtsort=&poe=realtor&\mnprice=150000&ct=longmont&zp=&primaryZp=
&mxprice=175000&typ=1&exft=0&exft=0&exft=0&exft=0&mnbath=0&areaid=768&sid
=070C377AB480C&snumxlid=1060334021&lnksrc=00002
There are only 3 houses in the city that are cheaper and I don’t think they have been remodeled.
(change made) cheaper 3 bedrooms. There are other cheaper houses that are smaller and fewer bedrooms.
It looks good my 2 cents worth.
landscaping the lawn looks overgrown, and dead in spots. Cut the grass seed the bare spots or sod the yard which ever you can afford. Get rid of the grass growing thru the cement. and in the front flower bed plant something.
thats the biggest things i see.
but i would be interested to see what other think of this, as it was something i just noticed the stove and fridge look worn while the rest of the house looks new, if you are including them in the sale which i assume you are i would have gotten new.
And problably the most petty thing but something i noticed you used silver/chrome fixtures in the bathroom but the door knobs are gold. While i dont think that will make or break a sale just something i noticed. Also you might consider blinds on the windows.
like i said just my 2 cents worth, but i hope it helps.
My turn. Ditto on the lawn. Also edge sidwalks and power wash driveway. Weeds gone on sidewalk and driveway. Kitchen looks good, ditto on the fridge, and maybe you could get some door hardware for the kitchen cabinets. Would cost maybe $50 plus install time, but would really make the cabinets pop. Also when I stage a house I put in a little area rug in front of the sink, put some towels out, maybe some candles and whatnot. Make it feel like home. Great front door! Same thing with the bathrooms, put down a bath mat, soap dish, etc. Nice tile in shower!! Overall it looks like you did an excellent job!! Way to go!! I also stay away from all white paint. I use a sandstone paint everywhere with white ceilings. Makes is look softer and more homey. Thats just my personal choice, as we know that most people paint their house when they move in anyway. Good job and good luck!!!
I have to agree with the landscaping, you need some serious curb appeal. Landscaping is realatively cheap, compared to not having it look sharp.
I would recommend some serious attention to the outside. The first thing i thought when i seen the pic was, “Is this Pre-Flip”. The insdie of the
house looks good, but i would agree with the appliances, the look outdated and too small for the area. You might be better off taking them out
if you can not afford new ones. Anyhow, make some changes to that landscaping, it, along with Bathrooms and Kitchens are some of the most important things to consider when flipping.
Good luck!
You listed it in the MLS but are you offering a commission to Realtors?
If not do so, 3%,will take a bite out of you profits, but so will holding costs. Pay 2k or 3k for a stager to come in and set the place up. If that is to much for you, go to one of those furniture rental places, like Cort, and rent a living room and a dining room set, bring some dishware from yuor house over, buy a few air matresses, and some nice comforter sets for the bedrooms, and buy some bahroom asse. That should cost you less than $500 (and most likely less than that), and will really attract buyes, they like to see themselves actually living there. They don’t want to just see a house, the want to see a home. As for the property itself, well I would have sodded it, but since it is not all bad you may want to get it cut (and keep it cut, and just spot sod. You really have no curb appeal, if I were driving by this place nothing would make me want to stop and look. Plant some flowers along the porch, so it looks softer. I alwasy say this about rehabs, and I guess it is a shoulda coulda woulda, but I would make the windows bigger. Those high windows make it look and feel smaller, and from inside it is kind of like you are trapped. Just something to make note of. Replace the fridge and stove. I like to go with stainless, or black appliances, but not matter what color you choose make sure thay match. It looks like your cabinets are the DIY kind from lowes or home depot (don’t worry they are the best kind to use), but you need to get some hardware, that looks nice. Personally I would go with black appliances, and stainless harware to make this kitchen pop. As for the bathroom, it is a real no go for me. This is the first thing I would want to change, because I hate bathrooms, that have all of this wood. But that is apersonal preference, one thing that is not an option is adding hardware. And I guess that is it for the house itself. Have you had an open house? I mean a real open house, not just a showing to one or two people at a time. Well you should contact some agents n your area that specialize in being a buyer’s agent(make sure you let the know you are offering 3% for whoever brings you a buyer), and invite them to view the property, and tell then when you are holding your open house. When the open house takes place make sure you are there to answer any questions, and if you are working with a few buyers without an agent you may be able to get a contract that day. Ohh I just noticed, I would trim that tree in the front yard, and the more I look the more I think you should just sod the whole yard.
I don’t think this is an issue of the door knob color or a patch in your yard. This is about the lack of buyers. I haven’t seen anything wrong with your house from the pictures. This is after all on the low end of the market. I sell an average of 3 rehabbed properties a week and have never furnished one of them. If you spend too much more money then you won’t make anything. Do what you have to do to entice agents to bring their clients around and create lots of traffic. If anything you should raise the price so it doesn’t appear to be a cheap house. I’ve never seen an interested buyer change their mind from a door knob color, patch in the yard, or an out of place tree branch. So your job needs to be to find interested buyers. Perhaps in your market more people are interested in more expensive houses. If I were shopping for a house to live in I wouldn’t consider buying anything for say $60k. Even if it was a 15 bedroom mansion. It just appears to be a cheap house that I wouldn’t care to look at.
P.S.- Is it just my computer or is this thread extra wide?
I would say rent it and move to buying your next one for 10k less. Funny, on my first rehab in CO I did the exact same thing, even down to buying my HUD foreclosure at the exact same price and am trying to sell at 162k, which is very competitive for the market. But we are at a 20 year high for oversupply of houses for sale on the market so it is totally a buyers market and I know GA has even more foreclosure than CO: You are #1 for foreclosure and CO is #2 in the US. So I am renting mine for hopefully about my payment and just chalking it up to learning. I put 14k into rehab with the hope mine would be such a wow house it would sell but not much you can do in a horrible market like we have. So I am just committed to only buying WAY below market in the future so at least I can rent for a strong positive cash flow. Good thing is we have such lousy markets we should be able to do that on future buys. good luck!
One other thing, I also listed mine on MLS and put a 4k bonus paid directly to selling realtor at closing. Even though a number of realtors got excited and showed it and told me mine is priced well, no offers. Very tough to sell any house in a horribly weak market but rental demand is incredibly strong here.
No Danny it is not just your screen. I hate when this happens, it usually goes back to normal after a while, oh well we’ll see.
Anyway I would resort to furninshing, because it is a cheap and easy way for a quicker sale. All markets are different and all have different requirements. One suggestion that I din’t make was to offer owner financing. It turns a buyer from seeing your property as an okay one, with the question in the back of there head “Do I really want to go through all of the bank red tape for this property?”, to seeing your property as one thatis just perfect, esp. because I don’t have to worry about the bank and can move asap. It also will allow you to up on the price, and then you can hold the note or sell it.
The “extra wide” was caused by the length of the second hyperlink…(fixed!)
Keith
The first impression - and that’s most important to selling any house…
Exterior - NO CURB APPEAL - crucial - don’t want to go inside.
Interior - PLAIN VANILLA -why do I want to buy this house? if its cheap … okay, but what other reason. It’s a home, but looks like an apartment. Where are the sizzle features?
It’s a nice house. There’s lots of other things I see that could improve it but won’t list them. The first two are the deal killers.
I’m writing a book about this very subject and some other things about rehabbing. 
To be out soon.
There are only 3 houses in the city that are cheaper and I don't think they have been remodeled.
That's a very important statement that I think is being ignored. This house already has something better to offer than it's competition.
Exterior - NO CURB APPEAL - crucial - don't want to go inside.
Interior - PLAIN VANILLA -why do I want to buy this house? if its cheap … okay, but what other reason. It’s a home, but looks like an apartment. Where are the sizzle features?
Low income buyers are not ultra-discriminating buyers. They are happy if the rats don’t eat all their food before they do. Curb appeal is very important but not crucial when this is all someone can afford. The “sizzle” in a low income house is a roof that doesn’t leak.
I have a hard time believing a buyer is going to turn around when seeing this house because of the color or the yard only to go look at the only other 3 houses in the city they can afford that haven’t been renovated.
Wow Danny, we seem to have very different philosophies. So you are saying that this is a low income home and the only people who could afford it have no taste, don’t want anything nice, and will take just about anything as long as the roof doesn’t leak and the rats don’t eat their food. Hmm.
For one thing, to qualify for this house is a pretty good payment. So how low income are you talking?
People are people. They all want nice things. High or low incomes. And people who have little money to spend on a house, don’t have the money to fix up the front yard and add some nice touches right away. Lower income people really want the most for their dollar because they understand that concept. It would take a couple hundred dollars or less to make this house look terrific out front.
So what you are saying is, if the people looking to buy this house are low income…just give them whatever because they don’t care anyway and they are lucky to get this much. I think that is way off base.
I’m not saying anything about low income buyers taste. My point was to say that you don’t put solid gold fixtures and marble floors in an inexpensive house. Ofcourse these are exaggerations just like saying the buyers only care about rats not eating their food. This house looks good enough for what it is- which is a low income house.
So how low income are you talking?
I’m talking 4th from the bottom. In your market maybe this is a large down payment but in say Manhattan where your average 2 bedroom apt is $1.5 million this would be considered nothing. In the market of the subject property $158,000 is very low.
Unless this house was painted pink with purple polka-dots, the color of it is not the reason there hasn’t been one bite from a buyer. If something this insignificant was the issue then it would be on the punch list of things to do before closing with the new buyer.
You seem to be applying the mind-set from your particular market and background in luxury home building to a house that is apparently lowest on the totem pole.
Okay, this house seems to be in or near Longmont, Colorado. I lived near Longmont in Loveland, Colorado - so this area isn’t low income. As others have said as well - it needs some sprucing up. . . making it stand out from the rest. Maybe he should raise the price. Who knows. I don’t know what the comps are there.
I’m not biased either way about houses. I love them all. This one is cute. You are the one who said this was a house for low income people… not me. Someone buying this house with 5% down will have a payment per month of about: $1000 per month and would have to make about $35-40,000 per year. That’s a lot of people who don’t consider themselves low income.
I never said put solid gold fixtures LOL - just snazzz it up - I’m talking nice lighting, new stainless appliances, under counter lighting, the house painted a homey color - nothing fancy - just make them say wow when they walk in. And do the landscaping. There’s easy - cheap ways to do this.
Also, the market is soft right now and maybe this range of buyers are not buying as rapidly as they were a year ago. Lots to consider.
Maybe he should rent it out or lease option it. He should definitely give it to a Realtor and get the exposure.
the market is soft right now and maybe this range of buyers are not buying as rapidly as they were a year ago
Bingo!- The house is fine, if you spend too much money on appliances, paint, etc. your house won’t sell any faster because there simply aren’t as many buyers. Sellers need to compensate larger holding costs when buying to offset this factor.
I have no doubt that the subject property isn’t in a low income area compared to national averages. Therefore 35-40k/ yr isn’t going to get you very far, just as it wouldn’t in Manhattan (You’d be lucky to buy lunch with that). For Longmont CO apparently 35-40k/ yr IS low income.
I said he might want to raise the price because in a high income town, where the average house is much more expensive, this property will be overlooked by buyers who want a more expensive house. It seems backwards but often raising the price gives properties a higher perceived value. I would never buy a car for $1,500, I’d think it either had 500,000 miles on it or something else was wrong with it. I wouldn’t even want to look at it.
Raising the price would then justify the snazzing up you were describing because it would open up to a higher income group of buyers.
Keith, thanks for fixing the width sorry about the long link.
I have decided to do a few things, I have made an appointment with a stager that came highly recommended from another investor. This shouldn’t cost me more than $400 and hope should be well worth it.
I have also made an appointment with my general contractor to fix a few very small things in the house.
Will do some more landscaping to increase the curb appeal. I do agree there isn’t really anything to attract someone from the outside.
I was kind of thinking on the same page as Danny in that I thought that at this price point this was a great value for someone looking to purchase a home at the low end of the market. However, for some reason this is proving not to be the case. Hopefully this will be remedied with a little landscaping and staging.
At the very beginning of the thread someone mentioned hardware for the cabinets. I didn’t really agree with that. IMO I thought that houses were moving towards not having hardware and a cleaner look. Maybe I haven’t been in enough homes. I would still consider this with a few more recommendations.
I also know that the market isn’t great right now (man am I tired of hearing that), but at the low end of the market as interests rates are rising this makes it so that people can’t afford as much of a home. Intuitively to me I would think that more people would be looking at homes in this price range? ie: a family can qualify for a smaller amount at 7.5% than they could of at 5.5%
I intentionally painted the walls a fairly neutral white color as I thought this would have been appealing for the family that moves in so that they could paint exactly how they wanted. My thought was that by choosing brighter colors I may eliminate buyers by doing this. Perhaps I was wrong here also?
I think this is a good start and I really appreciate the input. Next I need to come up with a plan to attract more buyers because the newspaper just isn’t cuttin it. I really question all of the gurus that say they are having great success with classifieds. I have ran many ads in the last 8 months with everything from very creative catchy ads to normal FOR SALE 3 BED ads to owner carry to rental ads with very little success. My current ad is an Owner Carry ad and I have had one call and this has been running for nearly a week.
Also yes I am offering a 3% coop. Whoever said the 4k bonus, was that on top of the 3%? Man that seems like a lot of money to pay one realtor.
This is where many rehabbers fall down or - probably purchased a house with not enough profit margin — LIST IT WITH A REALTOR… the exposure is tremendous! (I’m not a Realtor either) It will cost you approx. 5 or 6% - $9,000. If this is your profit, then you didn’t purchase wisely in the beginning. Holding costs will deplete your profit so you need to weigh the pros and cons. If you can’t sell - rent out the property until the market improves.
Sean it is true, the market is soft, but that may not be the only reason. The house is nice, but it really does need some aesthetic enhancement.
People don’t want to look at houses, they want to look at their future home. Most people just aren’t that imaginative, so you should dress the house and the curb in a way that helps people invision themselves living in their new home. This applies no matter how nasty or benign one’s views are about the potential buyer’s income level. Beggers can’t be choosers, but a low income buyer is a buyer no less, so they can be as choosy as they wish. And they just may not WISH to buy a home that doesn’t look good to them, even if they don’t see a single rat.
My mentor has his daughters buy inexpensive furniture and knick knacks to place in each house along with vertical blinds on the windows before he even starts trying to show them. He also has formal open houses from time to time if necessary (usually it isn’t). He’s been doing this for a very long time, quite successfully. Not saying it is the only way, but it is effective. Sometimes the people buy the fixings with the house because they totally fall in love. :-*
Not saying you have to do exactly that, but it works.
Another creative thing that I’ve seen people do is invite the neighbors over to look over the house after you’ve prettied it up. Then kind of institute a choose-your-neighbor program. Offer them a referral fee if they refer someone who buys the house. Enlist the assistance of a creative mortgage broker or two so that you can offer financing assistance.
So that is something to consider. Hopefully some of this will help. Good luck!..d