What To Do With Rehab....
Here's our situation.......2nd Rehab, nice brick 3/1 1/2 with office, large fenced in backyard--1650 sq feet, $78,000. We've had since March 04, took about (too long) 5 months to rehab, then we've tried to do FSBO, the only offer that we got was verbal offer of $10,000 down, then the rest in 3-4 months. That was fine, BUT that was 2 months ago. I think the guy is not going to go through with the deal--everytime I talk to him, it's always "everything is fine, I'll have in the money (he borrowed from retirement plan) in a few days, trust me... So, I'm gulliable and trusting and we have just been continuing to wait. Then he says a relative died out of state and he has to funeral. Two weeks later, he returns and now he won't return our phone calls So, we are thinking about listing with an agent. But, it will be tough to continue making payments, we could do it though. We really just want to sell it instead of rent it out. I learned some very valuable lessons--not to trust people just on their word. If it seems like the deal is falling apart, start looking for buyer somewhere else. You need lots of $$$$ in savings before you start REI. Anyways, sorry so long. We really do want to get into REI and make it a success, but after this house and depleting so much of our savings, I'm not so sure now.
What do you think is the best option for this house to get out from under it fast?
Thanks.
Well this is a good and bad time of year to be selling real estate. Good as if you do get lookers they are serious as most people aren't thinking about real estate this time of year, bad as there won't be many people looking for real estate this time of year.
I would list the property for sale, FSBO and find a mortgage broker that your buyers can work with, even better yet a broker that has a $0 down program that you may be able to "gift" some of the money to the buyer through a non-profit program. That way you can advertise your house as $0 down.
When you put it on the market I would also let your original buyer know that you have other buyers and if he still wants the home needs to act NOW and make sure he fills out a purchase contract with a sizeable earnest money deposit, while looking for other buyers.
Put it in the MLS as fast as you can at the very lowest price you will take. The best chance you will have of selling it will be the first time it appears in the MLS. If you price it too high with the intentions of seeing what happens you are squandering the very best chances you have of selling it. If you don't understand exactly what I am talking about talk to some good realtors and ask them when best chance you will have to sell it will be in regard to listing in the MLS and they can spend the time explaining the hows and whys and reasons behind it.
Cut to the bone of exaclty the lowest you would take, mark it up maybe 2% from there to allow for negotiations.
Forget that jack off with the $10,000.
Never stop selling your property until somebody signs a contract and hands you a check for earnest money. Until then it isn't sold no matter how much hot air they blow.
Please let the 63 year old guy wanting to get into real estate read this thread!
Based on your reserves, how long can you wait before the house is sold? Can you borrow some money from friends for short term? How long do properties take to sell in your neighborhood using a realtor? The 'No Money Down' method works very well if you are able to reach a lot of audience quickly. Listing with a realtor is good beause of the market from the MLS. Did you list your property in local newspapers and what kind of response did you get? You will have to use your judgement beacuse I don't know the $$ reserves you have and the feel of the market in your area.
Thank for the quick replies. We could probably continue to pay for 3-4 months. Another mistake that we made is using 15 year note so payment is higher than is would've been with 30 year note. I need to check with a realtor friend to see about how the market is in this area. I really don't know.
Thanks
Heather - Next time when you do a Rehab, you should know the exact pulse of your local RE market. You should plan for atleast 6 months of waiting time before you sell.
3-4 months is tight and you sound desperate to sell. Try one more shot at FSBO aggressively using local newspapers, your REI club etc. Your biggest disadvantage is the time of the year. If you don't get a Solid offer in 3 weeks, and I mean 3 weeks, list it with a realtor. Get the best realtor in town. Don't lose heart in RE because your were off in terms of timing and planning of your project.
Good luck