Thursday, September 13, 2007

Selling My Fixer Upper - Real estate turns sour

I purchased a fixer upper using a short sale in February thinking I could make several thousand dollars. I initially priced the house at $25k FSBO and was probably too greedy. I had an interested buyer the first month but would not reduce my price sufficiently for him to bite.

After a couple of months I put the property on the MLS using a flat fee listing service. I got one bite from a NYC investor and thought we had an agreement to sell at $17k. But she backed out.

Last week I tried listing the house on EBay with a starting bid of $12,700. But I had no bids. Tomorrow I will list with a full service Realtor. The main problem is that local Realtors charge a minimum of $3000 commission. I bought the house for $5k but with closing cost, attorney fees, back taxes and ongoing tax and clean out I have $11k into this property. My dream of making several thousand dollars profit has been eliminated and I am just hoping to break even now.

Unfortunately, this past weekend a drive-by shooting occurred one block away with 2 people dying and several more injured, so I am not too optimistic about selling.

I got into real estate last year so that my wife could stay home, but with neither of the houses selling after 7 months, she has been forced to find work. Our other 2 properties are vacant which drains $3500 per month from us. A few more months of this situation and we will start facing the fate of the people that we have been buying from.


CS said...


Sounds like things are getting tough. I think you are on the right track with your other 2 houses, consider what the holding costs would be for another few months then subtract that amount from your asking price. With the adjusted asking price you may get some new interest and it will help you liquidate before it becomes a problem. The new deal is a tough one as well, sounds like a violent neighborhood, can you hold it and rent it out to section 8 tenenats (at least break even) then wait until spring to allow things to blow over a bit? Don't give up on things, remember it runs in cycles. Hope this helps.

Paul said...

unfortunately the fixer upper is not in rentable condition so even section 8 is not feasable. The furnace was stolen and I'm not willing to invest any money in this neighborhood. Your idea on reducing asking price on my other property for sale is a good one based on 3 months holding costs. Fortunately, I rented one of my vacant properties this weekend.