I love wholesaling houses!

$14,456 Wholesale House Flip and Other Goings On

Danny Johnson / 28 comments

$14,456.38 to be exact.

That was the net amount to us. Not bad for about 3 hours worth of work.

I’m going to be sharing the details of this recent wholesale deal as well as what we’ve been up to lately. It’s strange to think that I haven’t shared much in the way of what we’ve been doing. Especially after sharing everything we did for 34 weeks in our house flipping business a while back.

What day is it?

2013. Already?

Time certainly flies much faster when you are busy. And busy doesn’t even begin to describe Melissa and my 2012. It was more of a flash.

The joy of fatherhood was given to me again last December. Weston is now a year old and I couldn’t be happier. He is 100% boy (our first and only boy). Which is a good thing considering we have 4 girls! He is a climber and wants to scale anything he can get his hands on. Guess he likes to get altitude like his dad. 🙂

If we can run this business with everything we have going on, you can too.

And you thought all I did was write this blog…

In addition to family, we’ve been wrapping up 4 simultaneous rehabs and have 4 more awaiting rehab. (It’s a good thing I decided to add that up because it reminded me of a house that I’ve been forgetting. Oops! Yes, that happens.) Some were recently vacated rental houses (which is why I forgot it).

The last house we finished rehabbing is being sold after only a couple days on market and multiple offers. That’s how the one before it went as well. I hope that is a long term trend.

The deals have been mostly from my we buy houses San Antonio house buying website. A couple from probate and driving for dollars mailings and a couple were rentals that became vacant.

Leads have been pretty steady. Just today I think I had 8 leads. Probably people waiting until after the holidays to take care of their house problems. I hope that trend continues as well. 🙂

We are continuing to buy houses to rehab and wholesale. Birddogging has also been a good source of quick $1,000 here, $2,000 there checks. I’d like to do more wholesaling this year as it is less time consuming.

I’ve also been working on something that I’ll let you know about pretty soon. It’s something that will help a lot of people finally get off the starting line and really take off in this business. My subscribers will be the first (and will probably be the only ones) to find out about it when it’s ready. You probably should subscribe to this blog if you haven’t already. You can at the top of the main page, or on the top right side of each page, or at the end of this post. No time like the present.

Goals, Schmoals

I’m sure a lot of you have already heard everybody under the sun talking about writing your goals for the new year, so I’ll save my breath on that. You already know how important that is.

Equally important, however, is that you focus on what you are grateful for. That’s not just for Thanksgiving. Really try to make this a year that you consider often what you have and are thankful for. You get more of what you focus on, so it’s best to focus on what you’re glad you have. Why not make it a point to think about these things every morning during breakfast?

$14,456.38 Net From A Recent Wholesale House Flip

That’s a great profit for very little ‘work’. Not quite the $50,000 that another wholesale house flip made us, but I’m not going to complain.

I recently did a live (and free) webinar for my subscribers that talked more in depth about this deal. If you didn’t know about it, I’m sorry. (yet another reason to go ahead and subscribe…)

I’ll go over much of the details here for those of you that did not make it or even know about it.

Here’s a picture of the house:
wholesaled house flip before and after

Not that bad. Looks can be deceiving though.

Repairs Needed

The house needed about $25,000 in repairs. The general list of repairs needed (main items) is here:

  • Foundation Leveling
  • Convert Garage Back To Garage
  • Gut Kitchen and Both Bathrooms
  • Refinish Hardwoods and Install New Carpet and Tile
  • Replace doors and hardware
  • Install new lights, plugs and switches
  • Repair drywall and paint interior and exterior
  • Replace HVAC System
  • Repair Siding
  • Landscaping

Lead Source: Website

This lead came from my website, the one mentioned earlier in this post.

The sellers didn’t appear too motivated just from their answers to the questions on the website. For the asking price, they entered, “Make An Offer.” For the ‘least they would take’ question, they put, “You First.”

Motivated Seller?

That doesn’t really sound like a motivated seller.

The reason for selling was that it was an estate. I liked that. They also didn’t owe anything on it. I also liked that.

Even though they didn’t seem motivated, there was potential. I went to meet them at the house.

I looked the house over and didn’t really care for it. The sellers were great people though and we talked for a long time about a lot of different subjects. One of the subjects was about the house and how much of a drain it was on them, time and money-wise.

Made An Offer Anyway

Being that I didn’t really care for the house, or the neighbors’ houses (trashy neighbors – junk in the yards), the bad addition on the back of the house, the amount of repairs needed and just the number of other rehabs I already had going, I decided to offer an amount that would make sense for me. An amount that would allow us to wholesale the house. Always remember to make an offer anyway.

Offer Calculation

After Repaired Value (ARV)$130,000
65% of ARV-$84,500
Repair Estimate-$25,000
———————————————————
Maximum Allowable Offer$59,500
My Offer$43,000
Difference$16,500

So the difference between what I could have offered had I wanted to buy, fix up and retail the house, and what I offered, was $16,500. That was the amount of room I had for negotiations and for my eventual wholesale fee.

They told me they wanted to think about it and talk it over with the rest of the family. At this point, I honestly thought my competition would get this one.

It’s Not Strictly About The Money

The next day they accepted my offer! They told me they liked me so much that they didn’t even bother calling anybody else. This just goes to show you that it’s not always about how much money you are offering.

Sold

I had purchase costs of $44,491.06 (Title Policy, Doc Prep, Escrow, Insurance, Taxes) and selling costs of $1,052.56.

I ended up selling it to the second person I told about the deal. They paid $60,000 and closed within 2 weeks.

I chose to close on this one first and then resell, instead of assigning the contractor for a couple reasons.

  1. The sellers had stuff in the house and wouldn’t let me put a lockbox on it to allow others to come through. This would make it more difficult to wholesale as I would have to schedule with the sellers to bring potential buyers by the house. Of course, the buyers would have to be business associates or contractors.
  2. The spread on this one was going to be decent. Some buyers don’t like to buy when they know you are making a good profit on an assignment. This alone doesn’t really concern me much as real buyers don’t worry about how much the wholesaler is making.
  3. I was going back and forth on whether to rehab and resell it.

When all was said and done, I ended up pocketing $14,456.38.

$60,000 (final sale price) – 44,491.06 (buying costs) – $1,052.56 (selling costs) = $14,456.38.

Not bad. Gotta love wholesale deals.

Thanks for visiting the blog and reading along.

Ok, here’s your chance to subscribe. What are you waiting for?

Danny
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28 awesome responses to “$14,456 Wholesale House Flip and Other Goings On”

  1. @buyhousescheap on

    Great post Danny. Really enjoy seeing the way you look at deals. I just picked up a small deal from the bank which based on the recent sales in the area it could go for about 89K. It needs about 13-15K in work. Would like to wholesale it but if I don’t get close to my wholesale fee I am really considering rehabbing it. At what price would you try to pick up a deal like this?
    Thanks

  2. Brooks on

    Great Deal Danny! It’s the only thing that makes filtering through all the leads worth it 😉

  3. Elizabeth Blazina on

    Great wholesale deal Danny! I am always a bit apprehensive about foundation issues. Is there ever a level of foundation issues where you say to yourself “nope , not gonna touch this one” ?

  4. Jay Palmquist on

    Fantastic post with real-life details!!! I love it. Glad you’re back online, too. 😀

  5. Andrew Howerton on

    Danny, I really enjoy the blog and all the rich content provided. Thank you! Question though: from your newsletter on the 31st you mentioned you were going to be discussing more about birddogging and wholesaling for beginners in your forthcoming article. Needless to say I was very excited for this but didn’t see a lot of this besides the recent story on your wholesaling endeavor. Is this still to come? Looking forward to it!

    Thanks, Andrew

  6. MikeC on

    Danny, great deal and post. Actually, let me take this oppertunity to say thanks for all your blogs posts and email you send out…FOR FREE!.

    One question – did you know the ARV of the property and make the offer at the initial meeting with them or did you get back to them after some research?

  7. Nate K. on

    Danny,

    I really appreciate you getting back with me earlier today. I have been reading nonstop for the past several weeks and am thrilled to have come across your website. Earlier this morning you responded back to me that it would be beneficial for me to consider bird-dogging and wholesaling to reach my goals of perhaps doing some rehabs faster. I understand the concepts of both, just not the how to. I am in the military (for another 2 years)and dont really have alot of friends with bank full of money sitting there waiting for me to come to them to sell them a house that I struck up a deal to sell to them for $50k and the homeowners are going to sell to me for $45k. From my understanding this is wholesaling, and the investors do the rehabbing. I never took ownership. My first question is where do I find these investors? And second, my credit isn’t exactly an 850, wouldnt I have to be approved from a bank in the first place for me to make that offer to the homeowner? If not, what keeps the investor from seeing what the homeowner was willing to sell to me and not just undercutting me by going straight to the homeowner. Please forgive my naive to the real estate world, I want to get in badly, but am trying to figure out where to start. Thanks again for taking your time to answer everyone back.

  8. Adam C on

    What are some good ways to get comfortable with determining accurate or reliable ARV numbers? My greatest sticking point getting started is gear of investing on a turkey that seemed right on paper.

    Thank you very much for making this information so personable and relatable.

  9. Seth Williams on

    Hey Danny, how often do you assign deals rather than wholesaling them? Do you have any posts explaining your step-by-step assignment of contract process? I’m always interested to hear how others handle this process.

    Another great post, btw!

  10. Alison on

    Hi Danny,

    Would you be willing to share your numbers for offers/contracts/closes? For example, in 2012 I made 14 written offers, got 12 contracts, and closed 4 deals. Another 4 deals are still under contract and may (better!) close in 2013. The last 4 fell apart.

    Anyone else want to compare stats? Is there an average for these ratios that anyone knows about?

    Thanks, Alison

  11. we buy denver homes on

    @Danny – what % of leads do you think you screen out? Meaning, when you by 1 out of 8 how many more do you think you didn’t make offers on?

    Thanks!

  12. Alison on

    Over the last 6 months I’ve run into several that had deal-breaker title problems. Danny, how do you avoid these? I don’t want to spend the time and money to get a title search run before I even get the property under contract – somebody could grab it out from under me while I’m waiting for results. Any suggestions?

    1. Seth on

      Hey Alison,
      Sorry to jump in here, but what kind of contract are you using to make offers? I typically don’t pull a title search until the property is under contract. The contract I use doesn’t require me to put down a deposit, and there is a contingency for an acceptable inspection and title search (which we worry about AFTER the owner has agreed to sell to us). I understand your frustration, I used to get caught up on this problem too when I was starting out.

  13. Steve on

    Ok, as a newbie here. it appears Wholeselling is the way I am going to have to get started. If you meet with the seller and they have agreed to sell the home to you, then you wholesale to someone else seems like it would make the seller a little uneasy. I assume you had a buyer lined up before you even made the offer? Also where are you getting the contracts?

    Great stuff here.
    Thank you for your time.