From a housing investment board (great insider reading!) - here's a post from a would-be flipper in Tucson. You know this is going on around the country (and perhaps the world). Thanks GF for the link.
I purchased a home in south Tucson (Vail) through Chris Szabo and closed on it 1 month ago. The market is flat and there is now competition and plenty of homes for sale in my neighborhood. I had planned to flip this right away but I have had NO offers and very FEW lookers. I'm feeling seriously burned and need out!
Here are the numbers:
Payments (all inclusive): $2500/mo first payment due 7/1
Loans (100% financing): $299k
Lowest competitor on mkt priced at $298k and not sold.
If I COULD sell it at $299 I would lose the RE commissions and closing costs estimated to be about $14K. Of course, the longer I hold it that $2500/mo starts to really add up. I want to prevent getting even deeper into this.
I need to either dump this asap and take a sickening loss or...? Should I contact the lender and tell them I can't make payments? What would foreclosure/ short payoff/ deed in lieu do to my credit? Given the way the market is going(looks flat) is it worth it to try and lease option? Can you think of any other options?
I acknowledge I have made a huge mistake so please no flames. I know there are great minds on this board so any help would be greatly appreciated.
and this follow-up
No exit strategy. Bought on speculation and made big mistake. Will never do this again! $1500/mo will kill me over a period of a few years. Reduction in price seems to be a reasonable strategy. Hope it works!
June 25, 2006
Posted by blogger at 6/25/2006