My brother and I trekked to a house that we have owned and paid a mortgage on for 17 months. 4 hours round trip. It was my 5th time making the journey to do some work to try to get it sold.
It’s a vacant house that needs work that we originally thought would be fairly easy to sell to an investor or a handy person who wanted to buy it, fix it up, and make some sweat equity.
We spent six hours working on it this go round—a couple of hours throwing junk into a dumpster and we also did wall repairs, floor repairs, carpet removal, ripped up poorly installed flooring, and took down crappy light fixtures.
This is not what we expected to be doing when we bought it over a year and a half ago.
The Deal: What We Bought and Why
We bought this property in May 2024—which turned out to be an inopportune time. The real estate market was very optimistic. Since then, it’s dropped considerably.
It was a distressed property with a divorce situation. We bought it subject to the existing mortgage. Our initial strategy was to buy it subject to and then to sell it without touching it to an investor below market, so our plan was sort of a touchless flip or a sub 2/wholesale deal. Quick in, quick out, make a spread.
That’s not what happened.
First, we had to evict a non-paying tenant who was squatting there and running some weird Section 8 room rental business out of it. Then we discovered the house needed more work than we anticipated for the buyer pool we were targeting.
We’re currently into it for about $152,000 total. We originally thought that we were going to take it over for somewhere in the 140s, then sell it for $170-180K pretty quickly and make a large profit.
Lately we’ve been trying to sell it for $150K just to get it off our plate.
The repairs are not big, nothing major. Some flooring and a lot of paint and spackle and also some exterior repairs. But despite a lot of effort on the marketing side we have not been able to sell it even after multiple price drops.
Why It Hasn’t Sold
The hurdles that we have run into are:
It’s way out in the country- The rural location and the variety of house types- from mobile homes to nicer McMansions and everything in between- have made it difficult to establish good comps. (Comparable sold properties). This makes it hard for investor buyers to feel confident about what they’re paying.
Being 25 minutes from the nearest town with amenities and services is not great either. The nearest store is a Dollar General 10 minutes away.
As far as individual buyers who could potentially build sweat equity, apparently it’s the location and the scope of the repairs that’s been a deterrent.
The house is on an acre of land but the acre is wide open with no privacy and there are houses on three sides. That might be a deterrent for some folks. A bit of a goldfish bowl situation.
The market timing didn’t help. We bought at the peak and then watched values drop.
Once a property has been on the market for a while and not sold, it makes buyers more suspicious. There must be something wrong with it, they think. The house got stigmatized, and buyers were wary.
Early in our ownership, we were told by an HVAC contractor that we needed a new HVAC unit. This probably killed some potential sales for us because we were being honest and telling potential buyers what we had been told. Nobody wants to buy a house where they have to spend $8,000 on an HVAC system. Unless they’re getting a deep discount.
The Lowball Offer Parade
Over 17 months, me and my team have fielded dozens and dozens of calls, emails, and texts about this property. We’ve literally had 20-30 lowball offers. By lowball, I mean $100,000 when we’re asking $150,000. Or $70,000.
When we first bought the house, Zillow was saying that the estimated value was around $210,000. We were confident being in at $142k. We originally pushed it out at $170-180K on Zillow when the market was at its peak, and then we just kept dropping it after we got no serious offers.
I’ve grew so tired of $100K offers I had to start telling people, “If it’s a lowball offer, don’t bother. There’s not enough meat on the bone for it to be a flip. It’s only for an owner-occupant who wants to build sweat equity. It’s not for a flipper. It’s not for a wholesaler.”
The Contractor Nightmares
Some contractors, unfortunately, will try to take advantage of out-of-town investors. We’ve seen it multiple times on this property.
We had crappy contractors doing crappy work that I had to redo. One contractor told us we needed a new shower valve. We okayed him replacing it—even though in hindsight, I’m not even sure we needed a new valve. He proceeded to take a two-handle valve out of the wall and replace it with a single-handle valve, leaving the two holes from the original handles exposed in the wall because the single-handle valve’s trim plate didn’t cover them. He decided that the job was done in that state and worthy of pay. Ridiculous. What did he think would happen when people took showers with holes in the wall?
We had the HVAC guy tell us we needed a new $8,000 system. (We didn’t). We had another HVAC guy tell us he changed out a breaker and charge us for the job—but obviously he didn’t do it, because I changed out the breaker later and that’s what actually fixed the HVAC.
Between the lowball offers and the contractor games, this property has been an education in what happens when you’re an out-of-town investor trying to handle a challenging property.
What We’ve Done: The Grind
This was my 5th trip, driving 2 hours one way, to get to that property and do work on it to try and get it to a level where somebody will buy it or rent it.
The HVAC Save
Early on in our process, an HVAC contractor told us we needed to replace the entire unit.
I decided to have a look at it before we went ahead and spent $8,000. I’m a handy guy. I’m good at figuring things out.
I used AI for research and found that there’s a key part that often goes bad on HVAC units—the contactor. I replaced it. Cost me $40 and took 15-30 minutes. The AC unit ran for a while-Eureka! Then it conked out within 15 minutes or so. Ugh.
The next thing to try was to replace the circuit breaker, which is something that can wear out on an older HVAC unit. This time the AC ran and kept running. Amazing!
After doing those two fixes, which cost a total of about $80 and probably 3 hours of my time, including research and a trip to the store, the air conditioning was working great.
Shame on the HVAC contractor who told us we needed to replace the entire unit. He was just trying to take advantage of us because we were not local and he assumed maybe we didn’t know anything.
But the damage was done. We’d already lost months—maybe a year—with buyers thinking they needed to budget for a new HVAC system, which skewed the margins of the deal.
The Laundry leak
One trip I took solo was to repair a leaky pipe in the wall of the laundry room. The floor and wall had been damaged as a result, so I had repairs to those as well. Te pipes ended up being an old rigid plastic pipe called CPVC that cracks very easily. Each time I thought I had it fixed, the crack would travel further up the pipe because of the friction from my cutting. It had to be handled like an egg. By the time I was done, I’d cut a 3′ chunk of wall out, removed a cabinet, and used every fitting in my plumbing tool box to finally fix the leak on the 4th try!
The Dumpster Day
What did we do this day? We had a dumpster dropped off and we emptied the storage shed that was packed to the hilt with a bunch of personal belongings that once mattered to somebody but were just total trash- clothing, decorations, a box of wigs (?!), misc outdated electronics, a ginzu knife. Not much of value, but it nearly filled a 15 yard dumpster! (about 5′ x 6′ x 12′).
We also tossed in the ripped up carpet and laminate flooring and misc other junk from around the yard.
The Wacky Neighbors
The people who live next door used to own the house. There’s a woman who’s in her probably late 60s who built that house and then moved out later when she and her husband divorced. She feels a proprietary sense over the house. And she’s been trying to get junk that we think is trash but that she values- broken kids bikes, an old cooler, a camper shell, a dilapidated bench, etc.
There was a trailer there built out of wood that I was going to break apart and throw into the dumpster, and she really wanted it. So it was hilarious to watch her and a nephew, a cousin, a sister, and her husband all puzzle over how to get this crappy, broken-down, semi-rotted wooden trailer that was about six feet by 12 feet off the property. They finally did it but took them about three hours and some straps, and they actually put the trailer onto another trailer in the end because it wasn’t road worthy.
They also wanted a broken down old bench, an old weathered, camper shell that goes on the back of a pickup truck, and a variety of miscellaneous things that would have gone in the dumpster that they diverted into their personal stash and lord knows what else because they took stuff off the junk pile before we got there that day. I think they salvaged all of the metal to sell at the metal yard.
The Pivot: What We’re Doing Now
After 17 months of trying to sell, we’re changing strategies.
Today, I had three different painting companies come by to give estimates on painting the entire house to get it ready to rent. The painting will cost us ballpark $5,000 to paint the whole house. I also had one potential tenant come who found the property on Zillow, and she walked through and sounds like she would like to rent it if we want to rent to her.
I may end up going down there and just staying for a couple days to install laminate flooring and tile on the floors. I can save money by installing laminate flooring in a couple of the rooms and tile in the kitchen and laundry room.
The mortgage is $850 and the rent will be $1,200. So if we rent it out, then we’ll have positive cash flow.
If we were able to sell it on owner financing, we would make way more than the $150K sales price. Compound interest is money making magic.
Or, we can rent it for a couple of years and then we might see the market go back up and have more equity in it where we could make a profit just selling it on MLS.
Another option is to find someone who wants to rent it and eventually own it. They might rent it for a year or two, and then we could owner finance it to them.
So even though this did not turn a profit on the timeline we expected or in the way we expected, there is still potential to make money on this deal. Either by renting it and letting equity build and the market turn back up, or by selling it on owner financing and making hundreds of thousands of dollars in compound interest.
The Lessons
Not all deals work out the way you expect them to. On the timeline you expect. (If you want to make God laugh, tell him your plans”).
Having a cushion is a good thing, which we did have on this deal. At least we’re in roughly a break-even spot.
Real Estate Lessons:
- Market timing matters—we bought at the peak
- Multiple exit strategies are essential when your primary plan doesn’t work
- Once a property sits on the market, it can get stigmatized
- Sometimes you hold longer than planned
- Cash flow can keep you alive while you wait for the market
- Bad contractor advice can set you back- as with out HVAC experience
- Being an out-of-town investor can make you a vulnerable to crooked contractors if you’re not careful and don’t verify work and/ or credentials. We now require a video walk through of the issue prior to approval and the same prior to payment.
The DIY Advantage:
My carpentry skills and willingness to research and fix things myself saved us $8,000+ on the HVAC alone. And more on the plumbing leak and other repairs. I’m fortunate to have developed the skills to be able to save money on labor, which is a big part of a lot of home improvement or repair projects.
The Mental Side:
This has been a big energy drain for our business to have taken this property over and then not having been able to sell it or rent it over a lengthy period. Paying a mortgage and electric on an empty house for months on end is no fun.
The market dip didn’t help.
But I feel good having done some work there and having had my brother help me. We’re making progress. A dumpster full of junk and debris went away. The property’s closer to rentable. And we’ve got options.
Real estate isn’t about perfect deals. It’s about having enough tools in your belt to turn imperfect ones into profitable ones.
What’s a deal that didn’t go as planned for you? Drop it in the comments—I’d love to hear how you pivoted.