What’s a Good Backup Plan If a Flip Doesn’t Sell?

Fix-and-flips can be very profitable if done correctly. However, even the most well-planned projects can run into unexpected challenges–like a property that doesn’t sell after renovations are complete. Whether it’s due to market changes, pricing mishaps, or low buyer interest, a delayed sale can quickly dig into your potential profits. That’s why it’s crucial to have a backup plan in place before you start your investment project. Today, we’re reviewing why some flips don’t sell, signs they might not sell, and backup plans if your flip doesn’t sell. 

Contents of This Article: 

• Why Some Flips Don’t Sell
• Signs Your Flip Might Not Sell Quickly
• Top Backup Plans If Your Flip Doesn’t Sell
• Find the Right Financing Option for You

Why Some Flips Don’t Sell

Maryland Hard Money Lenders know that even the most experienced investors can run into trouble when trying to sell a fix-and-flip property. After all, the market can be unpredictable, and there are plenty of obstacles to run into that can impact your sales. 

However, understanding the most common reasons a flip may sit on the market can help you plan ahead and avoid costly mistakes. Here are some of the top reasons some flips don’t sell right away. 

• Overpriced Property- Overpricing a property is one of the fastest ways to delay a sale. If the asking price doesn’t align with comparable homes in the area, buyers may pass on it without a second thought.
• Poor Location- Even the best renovations can’t overcome a poor location. High crime rates, a lack of amenities, or distance from city centers can make a buyer hesitate.
• Low-Quality Renovations – Most buyers want a move-in-ready home and will likely walk away if a flip is done poorly or is unfinished. Using cheap materials, rushing work, or leaving repairs unfinished can turn potential buyers away.
• Poor Timing or Market Conditions- Rising interest rates or economic uncertainty may impact how quickly homes sell. That said, listing during a market slowdown or off-season can limit the number of interested buyers.
• Ineffective Marketing- If your investment property isn’t seen, it’s not going to sell. A lack of professional photos, weak listing descriptions, or no online visibility can result in low buyer interest.

Signs Your Flip Might Not Sell Quickly

It’s important to recognize early warning signs that your flip may be sitting too long on the market. That said, the sooner you recognize these issues, the faster you can adjust your strategy. Here are some common red flags to watch for. 

• Very Few Showings- If you don’t have many people interested in or viewing your property, it could mean that it’s priced too high or you’re not targeting the right audience.
• Negative Feedback- You’ll want to pay attention to what buyers and agents are saying. If you’re hearing the same complaints, like outdated fixtures or a lack of curb appeal, you’ll want to address these issues ASAP.
• High Days on Market (DOM)- In a competitive market, most properties attract some interest within the first few weeks. If the property sits too long, it may be a sign that you need to adjust the price or switch up your marketing tactics.
• Nearby Comps Are Sitting- Sometimes, it’s out of your control that your property isn’t selling. If you see that other similar homes are also sitting on the market, it could be due to seasonal timing or other market trends. 

Top Backup Plans If Your Flip Doesn’t Sell

If your fix-and-flip doesn’t sell as quickly as you expected it to–don’t panic quite yet. There are several backup options that can help you protect your investment while still earning a profit.

Here are some backup plans to consider. 

1. Turn It Into a Rental Property
2. Offer a Rent-to-Own Agreement
3. Refinance and Hold It Long-Term
4. Lower Your Asking Price
5. Improve Your Staging or Add Curb Appeal
6. Consider a New Real Estate Agent

Turn It Into a Rental Property

If the market isn’t cooperating and you’re unable to sell the property in the timeframe you expected, consider renting out the property. This can help you earn monthly income while you wait for better conditions. That said, it’s important to ensure you set a rental rate that will cover your mortgage, taxes, insurance, and maintenance costs. 

Offer a Rent-to-Own Agreement

A lease-to-own option can be attractive to some, as it gives tenants the chance to rent the home and the opportunity to buy it later. This especially appeals to renters who are working on their credit or saving for a down payment. It can be highly beneficial to you as an investor, too. You’ll earn consistent rental income, and if the tenant buys the property, you still reach your goal of selling. 

Refinance and Hold It Long-Term

If you used short-term financing, like a hard money loan, to fund your fix-and-flip, you’ll want to refinance into a long-term mortgage. This will relieve pressure and give you more time to sell the property. If you go this route, you can hold the property as a rental or simply wait until the market changes so you can sell the property. 

Lower Your Asking Price

Sometimes, a price reduction is all it takes to attract more buyers. If your property has been on the market for a while, lowering the price can create more interest and help you sell the property before holding costs eat into your profits. However, you’ll want to be strategic with your pricing. Base your new price on comparable properties in the area, not desperation to sell as fast as possible.

Improve Your Staging or Add Curb Appeal

First impressions are crucial when it comes to selling real estate. Buyers usually form opinions within seconds of arriving at a property. If you’re having trouble selling, look at your curb appeal or interior staging. Small upgrades like fresh landscaping, exterior paint, or professional staging can make or break a potential buyer’s first impression. These changes are relatively low-cost and can make all the difference. 

Consider a New Real Estate Agent

If the real estate agent you’re working with isn’t getting results, it may be time to switch. You’ll want to find someone with experience selling fix-and-flip properties and a strong local track record. If you’re dissatisfied, remember that a new agent can bring better marketing strategies and attract more eyes to your listing. 

Find the Right Financing Option for You

Fix-and-flip investment properties can be highly profitable, but not if your flip doesn’t sell. Fix-and-flips are quick-moving projects, often requiring a short-term loan, like a hard money loan. Hard money loans allow investors to obtain quick financing to purchase real estate, fund renovations, and sell for a profit–all within a tight timeline. 

If you’re looking for fast, flexible financing from a team of real estate loan professionals, Maryland Hard Money Lenders can help. We work with many Baltimore investors and provide competitive rates, fast approvals, and funding when you need it most. Contact us today to learn more about our lending process, or fill out our initial loan application today!