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Updated almost 6 years ago,

User Stats

45
Posts
47
Votes
Alex Bradley
  • Flipper/Rehabber
  • San Diego, CA
47
Votes |
45
Posts

First wholesale deal was out of state!

Alex Bradley
  • Flipper/Rehabber
  • San Diego, CA
Posted

Investment Info:

Single-family residence wholesale investment in San Antonio.

Purchase price: $75,000
Sale price: $82,500

This is the first deal I ever did! Being that I am located in San Diego, CA I was initially intimidated about taking on a deal located in San Antonio, TX. This deal came to me after I called a homeowner in San Diego about his home that was going into foreclosure. He called me back and let me know that he had a rental in Texas that he wanted to sell (also in forclosure) and he wanted to sell it in order to have a chance at saving his primary residence in San Diego. This deal was especially challenging because I was not familiar with the wholesaling laws in San Antonio and the homeowner knew virtually nothing about his rental house. He had an old friend managing the property who did nothing besides collect the rent each month. The owner thought the tenants had been in the house for less than a year and were month to month. Turns out they had been there since 2008 and were in a lease that was good for another 10 months. This later became a hurdle when trying to work with investors in San Antonio to wholesale the property to. Some other challenges in this deal came up when we found out the house was in foreclosure. When we went into contract the owner said he was up-to-date on payments and the house was not listed as in foreclosure on the Bexar county website. It was not until we signed the assignment contract and started escrow that we found out the house was being sold at auction in less than two weeks. To make things more complicated when we started escrow we found out the owners deceased wife was still on the loan and even though she was not on the deed we had to jump through several hoops at the last minute to close on time. We were very lucky that the homeowners family was so helpful towards the end of the process especially in helping us to get the heirship forms completed. We were able to close escrow on the deal the day before the house was scheduled to go to auction. In the end, we were able to create a win-win situation for everyone that was involved. The homeowner was able to get the cash that he needed, the investor that we assigned the deal to got an amazing property to fix and flip, and we earned $7,000. The biggest thing I learned from this deal is that you do NOT have to know how to do everything to start! When we entered escrow I had almost no idea how the process worked but I took it step-by-step and day-by-day and was able to get it done!

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

I want to get into buying 10-20 unit multi family properties and fix and flip SFRs but need to raise some more capital before getting started. I decided to learn how to do wholesale to make some more money while learning more about other parts of real estate.

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

I found this deal by calling leads that I got from my local title company. I negotiated with the seller after letting the buyer I found walk the property with his contractor to get an estimate of rehab costs. ARV was $150-160k the house needed about $40k worth of work. I got it under contract for $75,000 and assigned it for $82,000.

How did you finance this deal?

I did not put any money into this deal.

How did you add value to the deal?

I was able to help a homeowner avoid losing his house to foreclosure and sell it instead and I helped an investor secure a great off-market fix and flip deal.

What was the outcome?

I was able to complete my first deal and make $7,000 even though it was out of state in a completely different market than me and I was able to help everyone involved along the way. Not all wholesalers are evil.

Lessons learned? Challenges?

You don't have to know how to do every step to get started! I literally learned every step along the way, while I was doing it.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with Vicki Roarck from Stewart Title in San Antonio and she was amazing!

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