Wholesaling Hoarder Homes

[Caleb Reits]

Investment Info:

Single-family residence wholesale investment in Muskegon.

Purchase price: $25,000
Sale price: $50,000

This home was filled to the brim with trash and belongings. We actually saved this owner's dogs and cats from the freezing cold! She had no water or electricity in her home. We helped her find homes for these animals (6 of them) and helped her sell this home that she was sleeping in with NO electricity. She had no heat in the middle of the blizzards we were in and slept in the basement area. Keep in mind that no electricity also means no running water to the sinks, toilets, or showers! We were glad to help her get out of this situation and start fresh.

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

Wholesaling has a lower risk than taking it on and flipping it ourselves and sometimes is the better option for our sellers we come into contact with that have a home that's unable to have financing because of the condition.

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

We actually left marketing materials at her home in person. We spent a lot of time with her, taking her to doctors appointments, dropping off water because she had no electricity or running water, and helping her in other ways rather than just focusing on the "what's in it for me". We could have gotten it at a lower price, however that wouldn't of left her with enough to start over. We'd rather do the right thing than get greedy trying to make the most amount of money possible.

How did you finance this deal?

ZERO FINANCING. That's the best part about wholesaling. The end buyer brought the EMD and cash needed to close.

Lessons learned? Challenges?

Challenges - It's easy to forget to ask people WHEN they will be moved out by. We now have a specific area in our contracts that specify when the home owner or occupant will be out by - if that means vacant at close or needs an additional 30 days after close to move.

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

We worked with a local real estate agent who helped bring the buyer. He made the process easy as he maintained contact with the buyer while we maintained contact with the seller. For any wholesalers out there, it is GREAT to work with agents who are connected to many buyers to help dispo and sell your deals. Real estate agents specifically who work with investors are great agents to build a relationship with because chances are, they'll have a client who might end up being your end buyer.