First deal done, $25,000 net profit wholetail!

[Oz Pariser]

Hi all,

I have always found success stories very inspirational and I've looked forward to posting my own for a long time. I can finally say that my first deal is done, and my partner and I walked away with a net profit of just under $25k.

I found this property through a direct mail marketing campaign. I mailed letters to a list of absentee owners with over 70% equity. The seller had a large delinquent tax bill and was defaulting on his payment plan due to a financial crisis. He told me he had a "gun to his head" - most definitely a phrase that a motivated seller would use. 

He owed 70k on a private mortgage and the delinquent taxes were around 22k. We offered him 97k so that he could walk away with 5k cash in his pocket, and he accepted. We initially considered rehabbing the project, but realized that selling as-is would bring us a bigger profit. So we cleaned it out, did some minor landscaping, and put it on the market at 140k and got a cash offer at our asking price within 2 weeks.

So now I have my check for half that profit and I'm ready to more than triple my marketing efforts using this money! I can't wait to ramp my business up and take things to the next level! Thanks BP for all the education thus far and here's to much more success before the year is up!

Oz

[Oz Pariser]

Thanks @Mateusz Prawdzik

I found the absentee owners list through listsource.com. 

I also do "drive for dollars" and have compiled those run-down/vacant properties I see into a list, and searched for the owner names and addresses through the town tax assessor websites. I'll be mailing to these for the first time very soon.

As far as the FSBO, my personal opinion is it's first wise to get a feel for what repair costs are like by looking through houses in your area and with a book like "the book on estimating rehab costs" which I found very helpful. I also had the opportunity to walk through a lot of houses with my mentor which gave me a good feel for repairs/costs. While this is tough in the beginning you eventually get better and better at estimating the numbers. I wouldn't waste a contractor's time having him quote a house unless you somehow plan on compensating him for it. The ARV you'll find by looking at comparable sales in the area. But without access to the MLS this can be difficult. Some people recommend zillow as a very rough starting point of what the ARV might be. So once you have the estimated repairs and the ARV you can figure out what you'd be willing to offer and go from there. Good luck