Unusual but Easy-Money Utah flip - $36K

[Douglas Larson]

I hesitate to post this one because it's not the norm. It's also NOT the kind of thing that most brand new investors can do. That said, I think the story is repeatable and others can learn something.

In early March I got an email from a wholesaler about a very large home in a great neighborhood about 40 minutes north of me. The numbers looked great but a quick inspection revealed some significant issues with the property – hence a great price. The original home was in pretty solid shape but shoddy renovations and a poor-quality addition on the back of the home were real concerns. The Home had been vacant for over a year and there were frozen pipe issues with leaking water in the basement. Still, the math looked great so I tied it up with 5K EM within 24 hours of getting the email. The wholesaler had several other calls but he said he went with me because he "knew that I could close."

I estimated that a proper remodel would take three months and 80K, but could net 100K or more. I had just closed the week before on another large remodel project and subcontractors are always tough to nail down in the spring. I consulted with my retail RE agent @Jordy Clark and he suggested I just do a little cleanup and put it right back on the MLS, because the spring market "is so hot." He told me to put a price that made it "worthwhile NOT to go through the big renovation project."

My purchase price was 264K. I borrowed 100K of that at 1% origination and 11% APR (Pretty good terms for Hard Money). I funded in less than a week.

I quickly capped a couple leaking pipes and did some cleanup in and around the property. My agent had an MLS listing at 329K and a sign in the yard within three days of my purchase. My agent held an open house that first weekend and we had a few offers very quickly.

We accepted an offer at $322,500 and it closed in about 10 days. after commissions, concessions, title fees and the minimal repair costs, we had a true net of about 36K. Not bad for a couple weeks work. And just for the record, the wholesaler made 14K for his efforts.

This week I find myself in between projects so I'm a little sad I sold it, but I'm not gonna complain too much about an easy win.

I don't know if there is a Webster's definition for a "whole-tail" deal but I took my agent's advice to market a wholesale property on the retail MLS to see what response we would get, and it worked out pretty well.