Some things just don't work in life. Take Borat's swimsuit. It's not that he's an ugly man. But it just doesn't work. Another thing that doesn't work is an overpriced rehab house where the rehab work was done badly. Especially in this market.
I walked into a house today to review with a client. There had been a 16.2% reduciton of price yesterday and that caught my attention. I had seen the house before a few months back but couldn't remember what I didn't like about it.
Here is a list of what's wrong;
- Sloping floors.
- Sloping ceilings.
- No appliances.
- Carpet installed poorly...and I mean poorly.
- Mis-fitting wood trim.
- Loose vinyl siding.
- A chimney that will fall down within the next 5 years...guaranteed.
- Poor paint job.
Now there were some things right. The carpet did look newer along with the newer windows. But never-the-less it just won't fly. It's small, badly done and overpriced...still.
I've said it a thousand times and I'm going to say it again now. Buying, rehabbing and selling is not easy. You need to buy at the right price, hire the right guys for the repairs and sell at or BELOW market value for a quick turn.
By talking to the agent I learned that this was the first rehab for this seller, that they are behind on their hard money loan and that the price now is down to where he gets the payoff amount and real estate fees. And sadly, that probably won't happen.
Make sure you do your homework when you are looking at real estate speculating. Otherwise you'll be the next 16.2% price reduction waiting on a miracle.
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