What to do if your Next Flip Project Wont Sell!

What to Do if Your Flip Project Wont Sell!

A real estate investor buys a home, improves or renovates it, and resells it for a profit later. But even well-laid plans can flop no matter how much time you spent analyzing the latest trends.

Some house flippers have been left counting losses after fixing a house to flip for a high profit but never finding the right buyer. Are you in the same predicament?

You do not have to get into a dark room and sulk; it is not the end of the world. There are time-tested tips you can apply so that your flip project can sell before you accumulate more maintenance costs. Your flip can even generate temporary income as you wait for the buyer.

Try the following ideas if your flip project won’t sell.

1. Use the Internet to Reach Out to More Potential Buyers

We live in the age of the internet. If you do not maximize the use of social media sites and other internet platforms to advertise your property, your competitors will always flip their latest houses while yours depreciate as you wait for the right buyer.

To reach out to more buyers, you should be active in listing platforms such as Mashvisor, Homesnap, Zillow, Realtor.com, and Trulia. Learn to use filter options so you can reach your target buyers easily. Use the right keywords for a higher ranking in the search engine.

Part of the reason your flip project is yet to attract a serious buyer is that few buyers know about it. It is your job to tell them.

2. Seek Advice from Fellow Real Estate Flippers

Do not be a lone wolf — know when to hunt with the pack and when to continue with your “social distance.” Your fellow flippers may have helpful suggestions. They are your competitors, yes, but know when to stay your course and when to throw in the towel.

After all, not all of your competitors want to see you fail. Some are decent, kind people ready to offer insightful pieces of advice. Approach such good-natured, experienced flipping experts to seek advice on what else you ought to do to attract serious flip house buyers.

You may learn that your current cosmetics are not working, so you should go the extra mile by slightly changing things here and there. For instance, you may need to upgrade the curb appeal and landscaping on top of adding some smart home functions, such as security cameras.

3. Consider Lowering the Asking Price

You might have spent a fortune renovating the house and feel your asking price is justifiable and non-negotiable, but you have to look at things from a different perspective now.

First, residential real estate prices shot up in the early stages of COVID-19. You set your asking price based on the trend, but perhaps the trend has changed in your flip project’s location.

Other similar houses in the neighborhood could be selling at slightly lower prices. Buyers are not likely to buy your house at its inflated price just because you spent a high amount on renovation. That is asking too much of your potential buyers, especially when they have similar alternatives at better prices.

It can be painful to go for less to make a sale, but you may have to accept the realities: the longer your flip remains in the market, the less attractive it becomes. It may even need another round of renovations as you continue to wait.

4. Motivate Your Real Estate Agent with an Incentive

The real estate agent you enlisted may have better prospects elsewhere, so helping you sell your flip house is not a priority. This agent hopes to focus on your flip project after the rest in the neighborhood are off the table.

You can sweeten the deal with a bonus; for instance, the agent gets an extra commission if a buyer can be found within a specific period. The incentive can motivate the real estate agent to work extra hard on finding a willing buyer sooner than later.

5. Hire a New Real Estate Agent

Have you had to deal with a real estate agent whose phone seems to ring every minute? They never want to miss any call, even when talking serious business with you at your office? Or maybe you tried cutting corners and hired a “discount agent” of some sort figuring you would save a couple points on the commission?

Let’s face it: some agents stink, no matter how much you try to motivate them. The more you register your impatience, the less they seem to care. The bad apple estate agents serve many masters, and you end up with a raw deals from an agent who is all over the place. Sometimes what you get what you pay for.

Your flip project may fail to get a buyer in time because your current agent is playing games and quoting much beyond the agreed asking price. This can put off serious buyers.

If you feel you are running out of time, why not hire a new, more determined real estate agent?

6. Turn Your Flip House into a Rental

For whatever reason, the market may have moved. It may not be possible to get a buyer in the foreseeable future, at least according to what the local real estate economists say.

As you wait for the market to turn around, why not rent the place to short-term tenants? Check if the local authorities allow such an arrangement in the area. If allowed, renting it can help you recover some of the holding costs. You can consider a long-term tenant if the market is not swinging back anytime soon.

You can list your flip house on Airbnb, for example. Who knows, this can be a blessing in disguise. One of the short-term tenants might later be the buyer you have been waiting for. Alternatively, you can later sell it to other investors as a premium turn-key rental.

7. Walk Away, Cut your Losses!

If you have tried everything else yet no serious buyer seems to show interest in your flip project, a time may come when you have to face reality: close shop and walk away, cutting your losses. Occasionally counting losses is part of business, after all. Just don’t let it become a habit.

Move to the next flip project and make good use of your experience now that you are wiser.

As a flipper, you should learn to develop the maturity and discipline that can help you make timely decisions. You should not rely too much on your emotions, which may happen if you fall in love with a flip project that won’t sell.

Thanks to the holding costs, you could already be running at a huge loss the longer you hold on to the unlucky flip project you love. As you prepare to walk away, consult your financial advisor about the amount of tax write-off you stand to benefit from should you sell at a loss.

Always Be Prepared to Make the Hard Choice

Buying and flipping is a good line of business, but it has its challenges, just like any other type of business. Do not quit because your flip project has failed to sell; learn from your mistakes and apply the best strategies next time you invest in a flip project. Always be open-minded as you buy a house to renovate and flip. Hopefully it will sell quickly, but prepare to deal with a flip you can’t quit.

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