Thirty First Week – Time To Wholesale

Here is what happened during the Thirty First week of documenting our flipping houses business on this blog. If you missed the first post explaining what I am doing, please visit this page: See How We Are Flipping Houses.

These are the things I did this week:

Posted Before Pictures Of The Perp House

The details for the Perp House have now been posted. See the before rehab pictures, numbers and rehab scope of work.

Posted Before Pictures Of The Flatulent House

The details for the Flatulent House have now been posted. See the before pictures, numbers and rehab scope of work for this flip.

Def Leppard House Set To Close Tomorrow

The Def Leppard house is set to close tomorrow. I will post the final numbers for the deal next week. Profit from this one is looking to be pretty good.

Honk Your Horn House Post Updated

I’ve updated the Honk Your Horn House Before Post to include the rehab scope of work and materials specification, as well as the cost for the new contractor to do the work.

3 Rehabs Currently Going

Currently have 3 rehabs in progress and still need to have a contractor do minor touch ups at our old house so that we can get it on the market. Three at one time is really my limit. If they are light rehabs (which for the most part these are) it is manageable. Right now, rehabs are taking place at the Honk Your Horn house, the Perp house and the Flatulent house. The Front Yard Stink house is still awaiting rehab.

We are still unpacking and getting settled at our new house and all of this going on at once has made us really busy. My son is due in December and I don’t want to be in the middle of a ton of rehabs and other projects so I am probably going to be doing more wholesaling as deals come up. Quick cash is always awesome and I am looking forward to working the business a little differently.

Got Another One Under Contract

Signed up another one. This one is one that I had looked at a couple of weeks ago. I had to offer lower than what they owed. They wanted more and were waiting to see what a couple other investors were going to offer. I have a feeling the other investor(s) were not willing to make that low of an offer.

We ended up agreeing on what they owed which was my Maximum Allowable Offer (MAO).

The husband had a job transfer out of state and was already there. The wife wanted to move and join him but needed to deal with the house first. They were hoping to make 20k or more over what they owed, but opted for a quick sale instead.

This one will be wholesaled and I will post the details after it closes. The lead came from my website.

Mailed Postcards

Mailed follow up postcards to 178 addresses. These were to addresses found while driving for dollars months ago and that have already had several letters and postcards mailed to them.

Marketing

Total Motivated Seller Leads This Week: 9

Leads Analyzed

1. Lake House Without a View[Source: Website]

   Homeowner wants to sell a 3 bedroom, 2 bath, 1700 sf house in a good neighborhood.

   Here are the numbers:

   Asking Price:	$45,000
   Amount Owed:	$0
   Repairs:	Tenants Trashed (unconfirmed)
   After Repaired Value:	$??
   Max Offer:	$?? – repairs

   Homeowner lives out of town. They had started building this house years ago and then had to move. After moving, they decided to rent the house (guess it was in liveable condition if not complete). The tenants have since moved out, but only after trashing the place. This seller is motivated and wants to sell pronto.

   The house is on a 2+ acre lot and the seller owns the 1+ acre lot next to it. She is including both with the sale.

   My father went out to see this one because I was wrapped up with some things. I wanted to move fast and he helped by taking a look for me. Thanks.

   The drive for the house had been completely washed out from the hard rains we got here a couple of weeks ago. The house was built by the homeowners. Not contracted to be built, but actually built by their hand. Foundation was all wrong and it just got worse from there. Even with the acreage (which was in a bad spot as can be seen by what happened to the only way onto the property), the place was not worth the hassle at almost any price.

   The best bet for this one was to birddog it and try to make a quick referral fee instead.

   None of my investors wanted it either. You would think at that price it would be a good deal, but there are some real suprising things out there.

2. Got Out of an Abusive Relationship[Source: Website]

   Homeowner wants to sell a 3 bedroom, 1 bath, 800 sf house in a not-so-good neighborhood.

   Here are the numbers:

   Asking Price:	$20,000
   Amount Owed:	$7,000 (back taxes)
   Repairs:	quite a bit (unconfirmed)
   After Repaired Value:	$40,000
   Max Offer:	$15,000 – repairs

   Seller inherited the house and was living there with her boyfriend. The boyfriend was scum and now she wants to just get out of the relationship and the house. The area is not one that I work in, so I birddogged it.

3. House Fixed Up With Tenant[Source: Website]

   Homeowner wants to sell a 3 bedroom, 2 bath, 1400 sf house in a good neighborhood.

   Here are the numbers:

   Asking Price:	$110,000
   Amount Owed:	$0
   Repairs:	nothing (unconfirmed)
   After Repaired Value:	$110,000
   Max Offer:	$72,000 – repairs

   Seller has a house that she wants to sell to get some cash. She mentioned that the house does not need any repairs and that there is a tenant that has been there for years. She was talking about how much the house across the street just sold for and that it was a little bigger but hers was nicer. Not the kind of dicussion you have with motivated sellers. I made a ball park offer in the 60’s. She wasn’t pleased. Go figure.

   I was tempted to say that I was more interested in the house across the street. 🙂 Is that mean? Just thought it would ad some humor to this post. I wasn’t really tempted to say it.

4. Big Improvements Made[Source: Website]

   Homeowner wants to sell a 2 bedroom, 3 bath, 2700 sf house in a good area.

   Here are the numbers:

   Asking Price:	$368,500
   Amount Owed:	$265,000
   Repairs:	master remodel (unconfirmed)
   After Repaired Value:	$250,000
   Max Offer:	$162,000 – repairs

   Sellers relocating soon. They mentioned having done the following: Big improvement made to the outside. Organic garden – adding fertile soil, rocks – landscaping, several garden shades convertible for green houses, 3 acres, rain water collection system, extra-large water tank, additional outbuildings.

   Sounds nice…and pricey. I think this may be a case where homeowners put a lot of money into improvments for a property and expect to get 100% and then some back on what they spent. Just doesn’t work that way. Next.

5. Doesn’t Need Two Houses[Source: Website]

   Homeowner wants to sell a 3 bedroom, 2 bath, 1300 sf house in a not-so-good neighborhood.

   Here are the numbers:

   Asking Price:	$48,000
   Amount Owed:	$10,000
   Repairs:	quite a bit (unconfirmed)
   After Repaired Value:	$55,000
   Max Offer:	$30,000 – repairs

   Seller has two houses and wants to sell this one. He says he’s been working on the house and it still needs a lot. There are also two bedrooms behind the house. Sounded strange. So, I asked him if there was a bathroom and a kitchen. Nope. Just two bedrooms that are not attached to the house. I’d call that a storage shed, but whatever. He wants a lot even though he says he’s negotiable. Birdogged it.

6. Can’t Afford Repairs[Source: Website]

   Homeowner wants to sell a 4 bedroom, 2 bath, 1700 sf house in a decent neighborhood.

   Here are the numbers:

   Asking Price:	$75,000
   Amount Owed:	$75,000
   Repairs:	foundation and cosmetic (unconfirmed)
   After Repaired Value:	$100,000
   Max Offer:	$65,000 – repairs

   Cannot afford the upkeep on the house and it needs foundation work. The numbers just don’t work as too much is owed.

7. Mother-In-Law’s Condo[Source: Yellow Pages]

   Homeowner wants to sell a 2 bedroom, 2 bath, 2000 sf condo in a decent neighborhood.

   Here are the numbers:

   Asking Price:	Make An Offer
   Amount Owed:	$0
   Repairs:	cosmetics (unconfirmed)
   After Repaired Value:	$80,000
   Max Offer:	$50,000 – repairs

   Selling Mother-In-Law’s condo as she does not live there anymore. Seller is from Mexico and will not be here long.

   The comps are all over the place for the condos near this one. They go from the 50’s to 90’s and it is pretty hard to get a solid idea. The seller believes this one is larger than the rest and does not need much in repairs. I am putting an ARV of 80k on this one and may adjust after I see it (if I see it). I will make a ballpark offer to see where they are at on this one being that they have no idea what to ask for it (I can see why after looking at the comps).

8. Foundation Work, Updates, Cosmetics[Source: Referral]

   Homeowner wants to sell a 3 bedroom, 2 bath, 1100 sf house in a so-so neighborhood.

   Here are the numbers:

   Asking Price:	Make An Offer
   Amount Owed:	$?
   Repairs:	foundation, updates, cosmetics (unconfirmed)
   After Repaired Value:	$70,000
   Max Offer:	$40,000 – repairs

   Realtor calling to help clients sell a house. He does not have it listed nor does he want a comission. The clients gave him my number and wanted him to deal with me.

   The house was a rental and is now vacant. It needs foundation work and all that comes with that (patching cracks, praying pipes stay intact and connected, etc.).

   Have an appointment to see this one tomorrow.

9. Wants To Move[Source: Website]

   Homeowner wants to sell a 3 bedroom, 2 bath, 1200 sf house in a not-so-good neighborhood.

   Here are the numbers:

   Asking Price:	$109,000
   Amount Owed:	$?55,000
   Repairs:	cosmetics (unconfirmed)
   After Repaired Value:	$75,000
   Max Offer:	$48,000 – repairs

   Seller wants to sell his house in a not-so-good neighborhood. These are newer (built in 2002) houses built next to older houses from the 60’s. The area is run down and has crime issues. The house looks nice and has updates (from pictures of listing, as he currently has it listed as well). Because of his updates, he has an very over-inflated idea of it’s worth. He was asking $109k but said he wanted at least $85k if it were cash. Still cannot come close. He owes too much for what I would want to get it for.

Summary

The leads have slowed quite a bit and it is due to my time being spent on starting and managing rehabs. If I am going to be wholesaling more, I will need to ramp the marketing back up. Will need to make a solid plan for that.

Plans For Next Week

• Finish Unpacking.
• Mail some more postcards.
• Manage rehabs.
• Move staging furniture (movers will do it) from the Def Leppard House to the Honk Your Horn House.

Please ReTweet and Like this post because it’s the nice thing to do and I truly appreciate it.

-Danny

Awesome quote this week:

“Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.” – Warren Buffet

Thank you for following along with us on our adventures in flipping houses. We hope you are enjoying it and that it is helping you to learn how to flip houses or improve your house flipping business, whatever the case may be.