Flip #3 · Uncategorized

Bachelorette Pad Flip 3 Update

Flip House #3 started two long years ago. Not long after Mac passed away, I purchased the beat up fixer upper from the estate, and that started this long, emotional labor of love.

Flip 3 Grandma's House 055

Two years of designing and decorating and cursing and planning. Even though this isn’t my first rodeo, I still get this overwhelming swell of anxiety. What if people hate my design? What if it doesn’t sell? What if nobody ever shows the house? I could have 500 successful flips under my belt, and I would still question everything.

Despite the anxiety, I knew it was time to pull the trigger and get the house listed.

And I’m so glad I did!

summer deals!

Unlike Flip 1, Flip 2, and Flip 4, I decided to take a different strategy all together. In years past, I have closely analyzed comps and tried to list my properties slightly UNDER their prices. My thinking behind that encompassed two things: during some of these, we were knee-deep in the recession, and I wanted people to flood the house in showings to see why it was priced below comps but with more updates. And, to be honest, that strategy has served me well.IMG_20160404_095500.jpg

But with this house, I tried a very different strategy. I found the highest comp in the neighborhood and decided to list well over that comp. I had toured the highest comp– it was a flip…a true flip. Investor came in flipped and fled. I had toured it to see my competition. They restored the wood floors. Replaced the cabinets. Added granite and new fixtures. But they didn’t replace the windows, squeaky sliding door, or fence. It was a midcentury ranch that felt like a dime a dozen new construction on the inside. The character and integrity of the original home was long gone. I had a suspicion that people like that original integrity and charm of a house rather than a gut with modern finishes.

And I was right.

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Not only did I decide to list OVER comps, I decided I didn’t want to be forced to play ball with the first offer I received. The first offer isn’t always your best offer. I wanted to be totally in control of the options, and I also wanted to create as many options as possible. Typically I list a house and if an offer comes in on Day 1, I counter….because it’s the first one on the table. But, as a Realtor, I see time and time again deals fall through all the time– most of the time because of financing. And since this house was going to be listed at the first time home buyer price point, there was a high chance that could happen.

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So the strategy I chose was to  list on a Thursday afternoon. I wanted as many Realtors as possible to have their eyes on the listing before their weekend showings. In the listing, I put that I would not respond to offers until close of business on Monday. They could submit offers all weekend, but I wasn’t going to accept/reject/counter until Monday. My hope was to create a bidding war. I knew it was risky, but I just had a suspicion.

And it worked.

[Disclaimer: I don’t think this strategy is appropriate for every house or every market. There are some clients that I would absolutely advise against this. It’s just about knowing the demand, knowing the supply, and relying heavily on gut feeling]

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By the end of business on Monday, I had close to 40 showings. 8 offers. All offers were over list price. 2 cash offers. And several heartfelt letters from buyers stating why they would be the best owner for the house. While I had hoped to create a bidding war, I wasn’t expecting the response I got. And while I knew midcentury and throwback charm had made a comeback, I didn’t realize the intensity of the midcentury craze.

I even had one offer that I didn’t accept ask if I’d be buying another midcentury to redo because they’d buy it after I was done.

I knew then that midcentury was big money. Forget your dime a dozen, contractor grade finishes. Buyers are sick of that. Something historic with unique character that has already been upgraded? THAT’S what they’re looking for. Granted, that may not be true everywhere, but in my little corner of the world, there is a high millennial population and they seem the most eager to purchase midcentury homes.

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While the heartfelt letters were compelling, I tried to make the decision on what would be the best for my wallet. With two cash offers, I knew I would most likely choose cash. In theory, they’re easier with less hassles. The first cash buyer backed out shortly after going under contract. So I went to cash buyer #2 who stepped in with an acceptable offer. Things haven’t been flawless in this deal. We are one week from closing and not sure if it’ll even close on time. These are all parts of the joys of house flipping. You choose cash to avoid the hassle and avoid appraisals, but you have to learn to roll with the punches.

Luckily, I already have Flip 5 lined up and it is not contingent upon Flip 3 selling…but it sure would be nice. I don’t know the timeline for Flip 3 or how the future of the escrow period will look. You know, going into selling Mac’s house, I was emotional. But maybe this insanity and anger from the escrow process is what I needed…I’ve really detached from the house and been so caught up in the “deal”, that I feel released from the house…if that makes sense.

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Whenever Flip 3 closes, it’s been a good run. It’s been a tremendous profit. 54 years this house has been in our family. It’s seen so much, but I think we all agree in our family, it’s run its course. Due to the nature of the family business, houses don’t stay long in our family. We don’t typically get attached to real estate. Mac’s has been the only house that has stayed consistent. It’s sad and, at times, gut wrenching to sell it, but I know Mac would be so happy for the financial freedom it not only brought her….but me.

 

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