A courthouse purchase turned into a wholesale

[Ryan Russell]

I thought I'd share an interesting deal I quickly put together a few months ago. I am a regular at my local courthouse sales. I value most all properties scheduled for auction prior to the sale and come up with an amount I'd pay for each property.

Anyway, I was high bidder (only bidder) on a home that was in a neighborhood I was very familiar with. Picked it up for $112,000 and ARV was around $150,000-$160,000. It was an unexpected purchase as the former owner owned about 1/3 more than the $112k I purchased it for.

I'm also a RE broker and I list a lot of REO homes. I have an extensive list of investors that are looking for a good rentals. As a matter of fact I had just sold 2 very comparable REO listings in a comparable neighborhood to an investment group the month prior for $135,000 each.

So, I called this group (2 attorneys) and we met at the property that same afternoon. The terms of the courthouse sale were that I had to fund the entire $112,000 within 24 hours. I offered the property to them at $130,000 (which was well below market value) with the contingency that they had to fund the purchase within 24 hours.

They agreed and I had the foreclosure attorney who conducted the sale prepare the deed in this groups name (rather than my companies name) and they funded it the next day for $112,000. The deed was mailed to my office and I traded them the deed for the difference ($18,000 profit). I was also able to offer them a title commitment as I have a team in place to regularly make these type of courthouse purchases.

I am pretty proud of how this deal went down. I had no expectation of even purchasing a property that day as none of the homes auctioning looked to have any equity. This was my first true wholesale as I typically buy and flip.

I just wanted to share the success story. Thanks for reading.