So when last we met in the “I Bought a House!” series (Read part 1, part 2, part 3, part 4 , and part 5), you read about how I began finishing up the project by performing some DIY projects that were easy and I was able to do relatively quickly (Except for dealing with my plumbing demon).
A House Reality Show?
As I began writing this post and looking back over all the interesting things that have happened while dealing with this investment property, I couldn't help but think it might have made a good reality show. Maybe if I do this again I'll call a TV producer first!
Anyway…
Finishing the House
Thus far I've spent $52,238 and the project is almost complete, but there are still a few things to finish up.
First, I called my friend Janene to come and do a final cleaning of the inside of the house. Then I put out some fresh mulch and flowers in the beds to add a little color and up the curb appeal a bit. I also picked up some stray trash, bricks, and other articles in the yard and replaced the old mailbox with a heavy duty one to thwart any baseball bat wielding teens.
I even bought a couple of Glade Plugins to make the place smell nice when realtors came to show the place to prospective buyers.
At that point, all the details were finished and I was glad to be done with it all, and relieved that I didn't run into any major unexpected problems. The entire process of fixing up the house took close to 3 months. Here are some pics to show the finished product:
Selling the House
So the next day I called my realtor Sherril because I had decided to sell the house instead of renting it out. I figured that, right now, I'd rather make a “quick profit” and build up funds for the next investment, eventually building up enough to buy one house to rent, and another to fix up, then repeating the process until I have a stable of investment properties generating income every month. I guess you could call this a “hybrid” approach to building wealth in real estate.
When I called Sherril, she was very generous in that she told me to first put the house on the market FSBO (For Sale By Owner) for a couple of weeks to see if I got any offers and thus avoid broker fees and commissions.
So I set a sign out in the front yard and ended up getting a couple of calls, but none of them were from people that were really serious about buying. Unfortunately, I didn't know about Zillow FSBO listings then. I probably would have received more interest in the property if I had listed it there as well. So after two weeks I met Sherril at the house and signed the papers to put it on the market at an asking price of $80,000.
We both agreed that the asking price was just a little high but we agreed to try that price for a while and reduce it later if needed. The average time on the market in this area is about 4 months so I knew there would be a substantial amount of waiting involved to get any interest.
No Home Buyers Yet- Should I Drop the Price?
Now the story has finally caught up to the present time. The house has now been on the market for about 2 1/2 months. It's been shown a few times and gotten some nice feedback, but no buyers yet.
Sherril emailed me yesterday and said we should really think about a price reduction to hopefully reduce time on the market and generate some interest again. I do think it's about time for that, and I will be calling her right after I finish writing this to give her the go ahead.
I'm going to discuss dropping the price to $77,000. I'm not sure what her ideas are on this but I'll find out soon.
So for this almost final post, I'll start wrapping things up.
Final Costs
My total costs so far as of today after the finish work, utility bills, and all other expenses has come to $55,574 and will continue to mount a little at a time due to ongoing utilities until the house sells.
I have no idea when the next post will be (hopefully soon), because I won't write it until we get a sale or we give up and just rent the place out.
So for now, I sincerely hope you've enjoyed the “I Bought a House!” series and hope you learned something new from my experience.
Until next time!
Update: After talking to Sherrill, we dropped the asking price to $77,000 and we'll see if that generates any interest.
Read more in my series about flipping a house
This is a great journey. I’m interested in how much profit you make in the end, after taxes.
Me too! Fortunately there will be no taxes involved because I purchased it through my Self Directed IRA. No taxes until I take distributions at age 59 1/2.
Dr. Cabler, I know I tweeted it yesterday, but I wanted to let you know I thought this was an awesome series. Thanks for tracking everything so diligently, and nice pictures. It looks like it turned out nicely to me!
Thanks for the kind words. I’m very happy with how the rehab turned out, let’s just hope I can make a really good profit from the deal and I’ll be even happier!
Re: reducing the price in March. I’m not sure where you live and I’m not second guessing your realtor. Folklore and gossip in Minnesota says that prime house selling time is April through August for houses marketed to starting families with children–think about the school year. Buying breeds buying, so the whole industry heats up when one group starts to shop in earnest. Also, of course, in Minnesota you probably want to wait until the snow is gone to see what you are actually buying but I guess that doesn’t apply to where you are living since I don’t see snow in the pictures. Anyway: good luck to YOU!
Yes, that’s prime selling time here in Nashville as well. We reduced the price just a little because we knew the price was just a little high to begin with, we’ve only had a moderate amount of interest so far, and we wanted to generate a little more. I have plenty of room to deal on this house, and I’m ready to get it sold and move on to the next one. I think we are now at a more marketable price, and that, combined with the unusually warm weather we’ve had, will help things move along. Thanks for your comment!
Do the numbers make sense as a rental? I really want to try my hand at the buy and hold strategy, but if you sell it for $77K that is a good deal!
The numbers do make sense as a rental, mainly because I paid cash for the house. I could probably rent the house for $800-$850 and clear $600-$650 after expenses. If you buy with a mortgage the numbers don’t work nearly as well, of course.