Ok. Here it is finally. The breakdown of the super secret historic house wholesale. The details of which I have repeatedly denied you. Wait no longer, here it is. We made just over……$50,000! The check above shows our proceeds from the final sale. We also received a check for over $8,000 when we bought it (loan overage for minor repairs we thought about doing).
This is a 4 bedroom, 2 bathroom, 2700sf house that was built in 1939. The house has a detached garage and mother-in-law suite that is a decent size. There is an inground pool and still plenty of space in the back yard.
Here’s a picture of the house:
You can view more pictures of the house here.
|Purchase Date:||June 28, 2011|
|Settlement Fees:||$2,588 (title policy, closing fee, insurance, loan fee)|
|Resale Date:||July 15, 2011|
|Settlement Fees:||$1,600 (closing fee, half of title policy, taxes, loan interest)|
Now you can see why I held off on mentioning any particulars of this deal. Some investors don’t like to see someone making this much on a wholesale deal and I needed to make sure that my position was not known. This one was actually wholesaled to another wholesaler who had the end buyer. So I made this and my buyer made a wholesale fee (I don’t know how much and I don’t really care).
The ARV for this house is about $300,000. I estimated the repairs at about $60k if you watched your expenditures closely. We did not do a single thing to this house (with the exception of dumping a ton of shock in the pool to keep it from becoming a swamp). I did not really have a detailed breakdown of the costs, just a rough idea for rehab because I knew I was buying with some room. My intentions were to sell the house at $150k to another investor, As-Is if I could. If I couldn’t find a buyer quickly, I was going to try and sell FSBO at about $200,000. Remember the old saying, “One in the hand is worth two in the bush.”
There have been several occasions in the past where we could have sold a house quickly for a decent cash price as-is and opted to fix it and sell for more of a profit. Inevitably, we ended up making less than we would have had we just sold to the cash buyer. Take this to heart. Especially in this market.Next: Follow Along As I Open Up My House Flipping Business
Danny, this is MOTIVATING! My biggest wholesale deal yet is $19,000 and I thought I was a ‘Baller’ – man, I’ve got a lot of learning to do 😉
$19,000 for a wholesale is awesome! Don’t you just love it when you calculate the hourly income on these sorts of deals? You are a baller.
When you wholesale do you purchase the property outright or tie it up with some kind of contract (do an assignment of sorts)?
When the deal is a great deal (likely to make more than 10k for wholesale fee), I prefer to close on it first to avoid any chance the deal could screwed by an unscrupulous investor going behind my back and contracting with the seller. Some investors will record a memorandum of agreement at the courthouse that shows the house is under contract. But, if the seller really doesn’t want to sell to you, are you really going to sue to get them to perform?
On the smaller deals, I have no problem just assigning the contract. I mostly work with people I’ve worked with in the past and they are smart enough to know not to try and cheat me. Wouldn’t you want to continue receiving good deals?
thats just crazy, man congrats!! I’m always thinking that if a house can be bought extremely cheap and then wholesaled then why hasn’t it been done so already. And that’s what keeps me from taking action more than I do.
I’ve put out very nice professional bandit signs in high traffic areas and run ads on craigslist and get hardly an response. It’s has gotten discouraging to say the least.
As you can see, I do a lot of marketing and take a lot of leads to get the good deals. Just keep on attacking it and you will breakthrough. That initial push is always the toughest and when most investors quit. Set yourself apart from the 95% that quit quickly and keep going. You will succeed.
Awesome! My biggest *retail* profit (to an end buyer) was $50,000 — wholesaling it is awesome, man! Which lead source did this come from again?
This was from a probate letter. I’ve since sent out a ton of letters, but to no avail. I’m sure they will produce another great lead. Right now they are just producing angry phone call. Of course, it only takes one good one. 🙂
Way to go Danny!
Truly inspiring! This goes to show that your persistance pays off. Many folks would have given up after only a few weeks and not much success.
Keep it up and thanks again for sharing your story.
Thanks. I just realized that this is the first time I’ve been able to talk about any kind of profit. I’ve closed some deals but they were from houses we already had before we started documenting it all. The next one, Hidden Iron House, is closing really soon and I will be able to talk about the numbers on that one too.
Glad you pointed out the persistence needed. So many people put forth a good effort and give up right before the breakthrough occurs. If only they’d stick with it long enough.
That’s big time!! Where did the lead come from again?
This was a probate lead. You get both extremes with probate, angry callers and awesome deals. Go figure.
Also, do you mind sharing how you got that house so cheap? The new people could learn from your negotiating skillz…..or did you just make your offer and stand firm?
It’s funny you ask. Honestly, I was a little skeptical about whether the house would sell at the higher price. I had enough of a gut feeling about it to go ahead and give it a try at that price. At the time, I felt that that price was all I wanted to pay and I had to stick to my guns. Thank God, I did. After contracting it, I took my wife to see it and drive the neighborhood again. When we did this, I realized that the deal was an awesome one. Before I bought the house, I only really looked at the comps (which can be all over the board in a historic area) and not really at what was currently for sale. The ones that were for sale were similar and the prices were far greater than what I had this one under contract for.
Did you use a private lender to close on this deal? If so, how did you pay him? A % of the deal?
Yes. We used a private lender. 1 point and 10% interest with interest only monthly payments (of which there were none).
Also, if you could, give us an idea what you are going to do with the profit? I think it would help the new investors out…..show them how you put money back into the business instead of blowing it all on some “consumer” item. But then again, you should always celebrate when you close a deal….especially a $50k wholesale deal!!
It’s good for the psyche!
I spent it all on a consumer item! Just kidding. 🙂
It all just goes back into the company for marketing and all of our expenses. When you close a deal and get a chunk of cash, and you are just starting, this is the time to figure out which marketing you want to use (based on effectiveness and cost) and really take MASSIVE ACTION! Spend the money. It’s easier when you know you will multiply it. What an awesome investment.
We like to buy cheaper houses that require little work and owner finance them to an end buyer. This is our retirement plan. 30 years of monthly payments and we don’t get calls for clogged toilets and our deposits (down payment) are much bigger. This is what we prefer and why we don’t do rentals.
We plan on doing a blog post about this strategy in the future that will go into much more detail.
Hell yea Big Danny! That’s a great take down. Those are the great ones that you can only get from being in the trenches every day. Congrats, you deserve it! San Antonio is a gold mine.
You are absolutely right and that is the main thing to take away from this site. You have to work at it and continue to work at it and all of the hard work will pay off.
Glad to see you hanging around Flipping Junkie. I really enjoy your blog.
Where in San Antonio is this property located?
[…] Finally, bought and sold the Historic House. I’ve decided to not share the details. Just kidding! Check them out here (Trust me, you will want to see this!): Historic House Wholesale Details […]
SCHWEET! Congrats, Danny!
Thanks. Wish I could come across these every month. But, I’m glad to get them every once and a while. 🙂
I wanted to know if you could give us a rough estimate on how much you spend on marketing per year? Thanks again..
Hey Ralph. Last year we spent about $15,000. Previous years, when we were doing more volume, we were spending between $20,000 and $25,000.
I enjoyed reading this
I am new to realestate as a wholesaler
And probates is my field of choice.
I would like to know if you have any advice
Vision Starr Investments
Glad you enjoyed it!
You were blessed to have a deal like that! Good for you.
I’m just wondering, how do you deal with the angry calls? Doesn’t those calls make you feel some anxiety? What do you say to them, and do they listen to you?
Have you ever turn an angry call to a deal?
Yes, we were!
It can be hard at first. The best thing to do is just let them finish getting it all out. Pause after they’re done and just wait several seconds. That’s usually the moment they feel bad about what they just said. Then tell them you’re sorry they feel that way and you will remove them from your mailing list. I’ve heard of others turning an angry call into a deal. I have not. I have turned one into an appointment, but I don’t recall it becoming a deal.
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