Insomnia = $10,000

[Owen Dashner]

During the latter part of last year, I woke up in the middle of the night and could not get back to sleep because I couldn't shut my mind off. I laid there letting my mind wander, and inevitably I ended up thinking about real estate. Deals I had in the works, things I needed to do, etc.

Finally, I gave up on sleep and grabbed my phone and got on the Craigslist app. I have a few keyword searches that I try to do every day on multiple sites to try and locate sellers in my farm areas, and I remembered that I had not done one today yet. I typed in the name of the small town I live in, and a new post comes up: "Fixer Upper - $15K". It's a post from someone selling a gutted 1000 sft. slab home (no basement, pretty common in some parts of my town). These houses are very cookie cutter and are generally very easy to rehab (I have done several). So I knew that this was a no-brainer at that price, even if it needed a total overhaul.

So I sent the seller an email saying I was very interested in it, I was a cash buyer, and would like to get the address and view it as soon as possible. This was at 2 in the morning, mind you, so I was not expecting a quick reply, and I was planning on calling in the morning anyway. But I also knew that the 5 or 6 other serious investors in my town would pounce on this deal if they got there first.

I fell back asleep eventually and woke up a little before 6 am. I thought to myself, "How early can I call this seller and not run the risk of annoying him/her and losing the deal?". So, I waited until 7 am and I called the number and a woman answers. I let her know that I saw the CL ad and was a serious buyer, had emailed her and I was hoping to see if I could look at the house. She agreed to meet me there, and it turned out that the house is on a street that I know very well.

I arrived a little before the seller, and the house is about what I expected: a shell on top of a foundation. The framing and foundation were in good shape, it had steel siding, and a roof - and that was about it. The seller pulled up, and before she even got out of her car, she said, "I know you!" As it turned out, her daughter was a volunteer coach on my daughter's tee ball team, and was someone I had struck up a friendship with. Through a nice conversation, I discover that the seller had been investing in real estate for a number of years, and had bought the subject property via a tax foreclosure. But she had too many irons in the fire for a big rehab and just wanted to cash out and free up some money.

She then told me that she had already had two other calls on the house, but would love to sell the house to me if I am interested. We end up doing a handshake deal at $15K, agreeing to sign the paperwork later in the day (which we did).

On the way home, I thought about all of the to-do’s I'm going to have with this big rehab. Then I thought, why not see if I can unload it as-is to another rehabber for a quick profit? So I called my friend and fellow rehabber and say, "I have a house for sale that's right up your alley". I tell him about it and that I'd sell it to him for $25K. He complains for a while about my markup and we joke back and forth, but we end up agreeing on $25K if I will pay for roofing materials and he can have a couple months to close.

I ended up closing on the purchase with the seller a week later.  Fast forward a couple of months, and I close on the sale for a nifty $10K (almost) profit.

Moral of the story: Sleep is for suckers!  You never know when you are going to wake up (literally) and find a great deal, and that is exactly why I get excited about this business every day.