Pre-Foreclosure Sold To Conventional Buyers

[Joshua Dees]

Investment Info:

Single-family residence wholesale investment in Wylie.

Purchase price: $205,600
Cash invested: $3,000
Sale price: $260,000

Pre-foreclosure for 20k in late payments. House has 3 Liens total.
UL Mortgage was 183k.
Mechanics Lien for 21k.
Unpaid HOA Dues for 3k.

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

Location, great neighborhood, good spread on the numbers.

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

Our neighbor called us and said "I need to sell my house, will you buy it?" To which we replied, "Will you sell for what you owe?" He agreed to that, plus some money to move.

How did you finance this deal?

We financed the repairs with our own money. Paid all closing costs and Agent commissions at closing.

How did you add value to the deal?

The house was in need of repair. There was a pretty bad hail storm back in 2016. The roof has been repaired, but there was no carpet, and there was some moisture damage in the ceiling and the house smelled like cigarette smoke. We painted the entire house, patched drywall, laid new flooring and carpet. Pretty much just did a normal Make-Ready.

What was the outcome?

Our original intention was just to sell it to another investor, but nobody wanted it. So our only other options were to Take it as a rental ourselves, or make it look good, fix the minor things and figure out a way to sell it to a Conventional Buyer.

Lessons learned? Challenges?

-Don't repair something until you own it.
-Don't feel obligated to pay for work that looks bad.
-Use your networks
-Get used to not knowing everything.
-It's not over until it's over.
-Buying a house without actually buying it.

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

Agent- Jeanine Thames Glassman (Keller Williams)
Title Company - Republic Title in Plano on Coit near Frisco (Tracy Horne)
Flooring - MP Carpet (Eduardo)
Windows- H&H Services (Robert)
Roofing - Norwood Roofing Systems (Mike Norwood)
Gutters- AMLU (Mauricio)