Awesome April in Arizona!

[Shiloh Lundahl]

April has been awesome for us in Arizona.  

This month we:

• Purchased 1 flip
• Purchased 3 buy and holds for lease options
• Filled one lease option
• Closed on one flip
• and just got under contract today for 1 more flip in Mesa, AZ.

I credit the success to the awesome team that we have put together over the past 2 years.  Without them, we wouldn't have been able to any of this.  Real estate is truly a relationship business. Thank you team!

[Shiloh Lundahl]

@Michael S. Here are some more details of April

At the very beginning of the month we closed on a property that we found off of Zillow. It was a for sale by owner (FSBO) property selling for 193k in Apache Junction. We have flipped several houses in that area and have found it to be pretty profitable. Come to find out that the FSBO was actually a wholesaler which was fine for us. Here are the numbers:

Purchased 1 flip

Purchase Price = 193k

Estimated ARV = 285k (conservative numbers)

Estimated Rehab = 35k

Estimated Closing = 20k

Estimated Hard Money = 12k (for 6 months)

Estimated Holding Costs = 2k (for 6 months)

Estimated Profit = 23k

It may not seem like a big profit but it falls within our numbers.  Also, we are partnering with someone we met through a BP post on this property so that is exciting.

Purchased 3 buy and holds for lease options

We found one property with 2 houses on it that rents are at $1300 a month from a wholesaler.  We just closed on it but we plan on approaching the renter in the first house and asking them if they would like to purchase the property on a lease option.  This will minimize some of our capital expenditures.  We have a bank lined up where we are going to get a loan on it for 4.59% for 20 years with a 5 year adjustable rate.  So the option is for 5 years.  We got the property at 102k and we will be selling it as a lease option for 135k. Estimated profit over 5 years is around 57k

We found another property in Coolidge that we bought for 17k but it needs about 62k in work. The ARV for this one will be 110k - 120k and it will be completely fixed up at around 85k. We plan leasing it out at $850 a month and selling the option for 130k on a 5 year option. We will be able to put this property in another loan at 4.59% and have very little of our own money in this one using the BRRRR method. We found this through my partner's advertising. Estimated profit over 5 years is about 45k.

We closed on another property in Eloy. This was a beautiful property that we were able to purchase for $87,500. It had a flood and needs about 20k - 25k in work. The ARV for this one is about 180k. We plan on either doing the lease option or doing a seller finance deal were we sell it for 180k at 7% interest and we carry the note. Really we would wrap the note around a bank loan that we get with a 5 year term at 4.59% where they will need to refinance after the 5 years because the rate will adjust. Estimated profit over 5 years is 85k

Filled one lease option

We finished a rehab that we purchased at the end of November 2016.  We bought it for 70k and put 38k into the rehab.  After hard money and holding costs were were into it about 115k or so (I am still finalizing the numbers).  We were able to get a loan at 4.59% for $112,500 because it appraised at 150k.  After we collected the option fee we were ahead and we will cash flow on the property about $200 a month.  So this one we were able to get all of our money back out and keep the asset and create cash flow.  In 5 years when the option gets exercised (if it gets exercised) we should make accumulatively 60k over the 5 years and with the sale.

Closed on 1 flip

This is probably the deal I am most grateful for.  Not because it was the most lucrative.  Because it was the opposite.  I partnered up with a flipper last year in April and May to flip 2 properties.  One in Scottsdale and one in Phoenix.  I was busy at the time so I was just going to be a money partner on the deal.  The rehab whet fine, but then the properties just sat there for months and months.  After 7-8 months of no decent offers and very little activity, I asked the flipper if we were going to make money on these properties and if I was going to get my investor monies back.  He said he didn't think so.  Right after he said that, I met with my hard money guy and asked for advice.  He told me to take over the properties.  So I called in this flipper that I had partnered with and I told him that I had to take over the properties.  He agreed to sign the deed of trust and my hard money lender notarized it and set up new hard money loans on the 2 properties.  We staged them and dropped the price and one sold at the end of March and the other at the end of April.  My contractors had to go and do some more with the rehab to sell them but, in order to help me out, they only charged me cost for their guys to go out and do the rehab.  So the reason I am so happy with this one, or both of these, is because my team helped stop the bleeding.  I learned a ton from this very expensive experience and I learned how to do partnerships better so that they work for everyone.  Total loss between the 2 properties in estimated between 30k and 40k (I am still finalizing the numbers).

New flip under contract in Mesa, AZ

I got an email from a wholesaler at 4 pm on the 28th.  I saw the value in the property by the pictures and the video.  I called my assistant to run a cashiers check to him about an hour away which she was kind enough to do.  In the morning I called my realtor buddy/partner to run the numbers:

Purchase price 220k

Estimated ARV 350k (conservative)

Estimated Rehab 60k

Estimated Hard money 14k (Estimated 6 months)

Estimated Holding 3k (Estimated 6 months)

Estimated Closing 24.5k

Estimated Profit $28,500

Again, I wouldn't be able to do any of this without such a great team of hard money lenders, my realtor partner, contractors, insurance experts, assistant, gardner, stager, and everyone else that make it all happen.  Thanks team.