Whats Your Thoughts ?
I v got 2 propertys for sale right now , A & B , i didnt plan on haveing property A, this long on the market , the intrest is killing me . Property B, will be listed in the next week . both are in the high end of the market compared to recent sales of the neighborhood.
Should i be prepared for holding them through the new year and tax season ? im holding open houses on the weekend and no one shows up . i cant afford property A , after next note pay ment and then my taxes . should i try just letting property A go for a lease option ? If so, give me some ideas on how to set up.
If you are not even getting calls, it might be your price.
You also want to know the average days on the market for that area to guage if things sit for awhile or not, probably something better to know before you buy but I would still find this out.
[addsig]
You don't mention where you are at but here in the Detroit area it's been a buyers market for a couple years now. I know you Vegas, West coast and East coast folks will find it hard to believe but we have trouble selling nice houses at a profit in a lot of the rest of the country. I got caught with several pre 9-11 houses that I still haven't dispositioned.
My experience with my rehabs has been
1. Make sure you have the BEST product in the neighborhood. It all starts with a great product. Not a gold plated house but one that is clearly the class of the area. If you rehab it like a rental, all you'll get are renters.
2. If you really want to sell, hire a top notch Realtor experienced in YOUR area of town and get it in the MLS. Don't hire the 3% discounters. Don't hire your sister-in-law the part time house mother. Yes, I know it's 6% of your profit but what are the monthly holding costs eating up? Like it or not, Realtors still control a lot of the market. Take the agent's advice and price it aggressively compared to the other properties available. Great product + value price = Sale.
3. Lease options generally attract glorified renters. The chances of them buying are low. Their credit is mostly shaky at best. And, although I hear of other investors getting $5000 as option money, I certainly have never seen it on my lease options. Look, if someone has $5000 and decent credit they can get a great mortgage deal these days and just buy the place. You can put a lease option tenant into your nice new house and two years later they'll walk and you'll wind up replacing carpet, repainting, etc... Believe me, I just went through that. On the other hand, the tenant made my mortgage payments for a good period of time.
The holidays can be very tough for moving inventory. But, I have a qualified (new loan) buyer for the house above and I hope to close before year's end. I should break even on this deal.
I've had to write off losses on a couple houses that I paid too much for back in the 2000 time frame. This was really my fault as I got involved with a couple "experienced" partners that did not hold up their end. Sometimes you need to take your whippin' and move on. I'll buy cheaper next time or won't do the deal and I won't work with partners. :-D
JohnStaley:
Interest is killing you? Do you have an HML loan on the porperty?
I have recommended this before and some people may not agree. However, you can always refinance the property to pull out some equity.....you should have quite a bit of equity if you bought the property right and rehabbed it right.
Payoff your HML loan and start making payments to your new loan with the same equity you pulled out. You should also be able to pay your taxes this way.
There are implications to this just like anything. However, this would keep you afloat and allow you to manage until you can sell both properties outright.