Property Manager Wholesale Home: $10k!

[Payton Pearson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $10,000
Cash invested: $12,000

I bought this property wholesale from my property manager, who is also doing light renovations on it to make it legal, safe, and rentable. As time goes on, I'll make the renovations Gucci, but at the moment, the goal is to remove a blight from the neighborhood while simultaneously providing a dignified place to live for Dayton residents.

What made you interested in investing in this type of deal?

The crucial points for which I am looking with my current acquisition strategy is whether the location is at least "blue-collar" in quality level, and if the foundation is sound. If the property meets these criteria, and the property is $10,000 or less, I will purchase it. Even if I let it run fallow for a few months to up to a year in order to gain capital for renovations, other expenses are so minimal that it hardly matters. I OWN it!

How did you find this deal and how did you negotiate it?

Property manager. Made a deal with him to give him some money on top of the purchase price for wholesale commission, and then some money for renovations. He will, of course, also get the monthly management pay.

How did you finance this deal?

Paid cash for it.

How did you add value to the deal?

The property is eventually going to be completely renovated, but for now, we are just making it legal, safe, and livable. When it comes down to brass tacks, we are removing a blight from the neighborhood.

What was the outcome?

So far so good. Property renovations are going smoothly, and it should rent well when completed.

Lessons learned? Challenges?

Always build into your finances higher-than-anticipated renovation/repair costs. A surprise $5,000 expense for re-running electrical popped up, and had I not had the funds, I would have had to wait a month or two longer to get the property rented. But again, with my strategy, allowing the property to run fallow for a while is not a gigantic issue, though should be avoided if possible.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Property Manager: Steven Leopold.
Wholesaler: Steven Leopold.
Real Estate Lawyer: Joe Lucas.