JV Wholesale Deal Santa Rosa

[Wyatt Postal]

Investment Info:

Small multi-family (2-4 units) wholesale investment.

Purchase price: $670,000
Sale price: $683,000

Contributors:
Brian Kraut

JV'd this deal with 2 different wholesale companies. Original contract was for $640,000 and it was daisy chained to me for $670,000, then I assigned it for $683,000

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

Low barrier to entry and you get to give a buyer a great deal

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

A friend put me into contact with the wholesale company who was holding the contract and we got it locked up the same day.

How did you finance this deal?

I assigned the contract to the end buyers about 20 minutes after it was assigned to me so I put $0 into the deal. The end buyers paid the EMD

How did you add value to the deal?

Found and negotiated the deal. We had a few other parties who bid significantly more than me right after it was assigned to me.

What was the outcome?

The buyers are now doing a full cosmetic rehab with a budget of around $60,000. They are going to put it on the market sometime in the next month or so for somewhere in the high 800,000s. If they don't get their price they will hold it and cashflow about ~1,000/month

Lessons learned? Challenges?

Daisy chaining and joint venturing with a lot of people complicated everything and made communication a giant game of telephone. The buyers purchased with a DSCR loan, so we learned the hard way that the DSCR loan won't include the assignment fees in the purchase price. The buyers had to come out of pocket an additional $45k unexpectedly on top of their already large down payment. With hard money loans this usually isn't a problem but bank underwriting is very strict.