Moores Scary

Moores Scary

 

Have you ever started on a property just knowing it was going to be a homerun? I know we have. One that sticks out in my memory was a 2,000-square-foot, three bedroom, three full bath, brick ranch on eight acres.

 

We purchased this house for $40,000 and did a jam up rehab, including custom tile, hardwoods and new counter tops. We put a new roof on it, installed a new HVAC system, and we even built a 36-by-40-foot pole barn.

 

Moores Scary

Our total investment was $90,000 once we finished. We then had it appraised for $180,000. Like I said … home run!

 

We put it up for sale, and quickly got a full-price offer. But the deal fell through. It turned out that the buyer had put multiple houses under contract and decided not to go with ours.

 

We put it back on market and got another full-price offer. This time, the buyer was transferring from California here for his job. After he got his moving package, however, he noticed his salary would decrease. The company tried to explain that moving to Georgia meant the cost of living was much cheaper and that he would actually have more buying power with his new salary.

 

He couldn’t wrap his mind around that concept and decided not to move. That gave us two cancelled contracts in a very short period of time.

 

We put the home back on market and heard metaphoric crickets, which was not a good sign.

 

After a couple of weeks with no activity, we dropped the price. We immediately got an offer. However, it was retracted before we could even answer it. We put the place back on market for a third time, and the silence of activity became deafening.

 

We dropped the price again and then again with no effect. After a long time on market, and many price reductions, someone finally offered us $155,000. We accepted … but the buyers’ funding fell through.

 

We couldn’t figure out why this house wouldn’t sell. It was a great house with a great rehab at a great price. After seeing how crazy this deal was, my private lender started referring to this property, which was located on Moores Ferry Road, as “Moores Scary.”

 

We finally sold it to a great couple for $137,500. At the closing table, I asked the buyers how they had done on the appraisal. The husband said that I’d never believe it. I leaned forward and said, “Try me.” He said, “It appraised for $180,000.” Without missing a beat, I smiled and said, “You gotta love instant equity.”

 

Moores Scary

 

Boy that felt like a kick in the teeth. It had taken us a year and half to sell this house. The closing disclosure states that after paying our mortgage back, we received $5,258. What that number represents is some of the money recouped. We actually lost money on that house.

 

So how did this homerun turn into a whiff? I don’t know. As we can tell from the buyer’s appraisal, our numbers were correct. But for whatever reason, we couldn’t get that house sold for a profit.

 

The sale date for Moores Scary was January 31, 2017.

 

Last week, I learned that the house recently sold for $203,000. Looking at the pictures on the listing, the house looked almost identical to when we sold it a little over a year and a half ago. In other words, my buyers made $65,000 just by living in it. That was a sweet deal for them.

 

I phoned my private lender to give him the news. “That’s just got to make you mad, doesn’t it?” he asked.

 

I told him that it didn’t. I’m glad my buyers made some good money. I just wish we could pinpoint something we did wrong so we can improve. You see, we pored over that deal trying to figure out how we messed up. And this new sale just confirmed that our deal analysis was correct. So far, this was just one of those crazy deals that didn’t go right for us.

 

Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.

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3 comments

  1. Joe, I’ve noticed that once a house drops off the market, only to inexplicably return, and then drops off again, only to return again; it can cause a sense that there is something wrong with the house. From that point on offers dry up. No real reason for it, except the house has a “stench” to prospective buyers. I don’t know if there’s a real solution, aside from time; which is why the buyers were able to then sell for a reasonable price.

    Just my thoughts. 🙂

  2. Joe, I’ve noticed that once a house drops off the market, only to inexplicably return, and then drops off again, only to return again; it can cause a sense that there is something wrong with the house. From that point on offers dry up. No real reason for it, except the house has a “stench” to prospective buyers. I don’t know if there’s a real solution, aside from time; which is why the buyers were able to then sell for a reasonable price.

    Just my thoughts. 🙂

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