My Second Deal. How I Made 25k While On Vacation!

[Jarrod Frankum]

Investment Info:

Single-family residence wholesale investment.

Purchase price: $27,000
Sale price: $52,000

The house garage had burned. The rest of the house was intact, but had immense smoke damage. The whole house was as black as a brisket. This was a rental house with an investor in town. He already got insurance to cover the house, and wanted to sell the house for just the cost of land. ARV of this house is 150-155k. Getting it under contract at $0.18 on the dollar was a no-brainer!! The seller was very happy with this price and was happy we could close in 2 days.

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

A burned down house only means opportunity to me! I found this house the day before I went to Colorado for a vacation. I got the contracts written up while I was riding in the car on the way up. The deal was funded 20 minutes before I returned to town. It was truly an incredible deal.

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

Driving For Dollars. - Do not try to tell me that it is not a viable option!! The seller asked 30k for it. I got him down to 27k cash offer.

How did you finance this deal?

Did not need financing. Cash buyer

How did you add value to the deal?

I found a screaming home run deal. I gave private, discounted, first dibs to the two people who are directly responsible in getting me started in real estate. I knew that I could still get several cash offers at 60k, but I wanted to pay it forward to the guy who took a chance on me and really mentored me while getting off the ground. I gave him an extra 8k off of what I knew I could get, because I wanted to add value to his business, and build a good reputation.

What was the outcome?

I made 25k with 3 hours of work while on vacation!!!!!! My end buyer is actually planning to wholesale it again for 62k to our investor circle. I think its a total win/win/win/win to all parties who have touched this deal. The seller also told me that I could take anything from the house that I could use. Since it was just smoky, I just needed to clean up some stuff. I got plenty of kitchen and lawn equipment as a bonus!

Lessons learned? Challenges?

I learned the value of not squeezing every dime out of the deal that I can, but to leave plenty of meat on the bone for my end buyers. This deal caused a lot of talk within our REIA group and helped build my credibility. It sparked great conversation at the REIA I just moved back to Lubbock and started REI in February. This is not a zero-sum game, and it is so wonderful to mutually benefit one another in this business. The only challenge, was convincing myself to get up and drive that day!

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

My end buyer/mentor is my real estate broker. I had an excellent title escrow officer handle everything so smoothly. Sarah Kirk with Hub City Title is a rock star! Chase Marberry, and the guys with Laminin Investments are very quick buyers and are straight shooters. I can't speak highly enough of these guys.

[Jarrod Frankum]

I do hope that this post inspires and causes y'all to get out there and take action.  I do know that not every deal is like this, but there are deals like this out there.  Imagine if I did not take the action to get out and drive that day!!  You can't get all of the deals yourself, but there is no doubt that every deal will be taken by someone.  Get out there and become that someone!  Doing this deal gave me so much confidence that I can do it.   One of the business partners who bought the house from me sent me a text saying how proud they were of me, once they saw my assignment fee.  I thought they may be upset, but that text really meant so much to me. 

I am a campus minister with Christians at Tech, and serving there is my dream.   Doing real estate to enable me to do what is most important to me is incredible.  I tell people all the time, that I am already retired since I do not consider a single moment of what I do as work.  I give all praise and thanks to God!  Right now there are a shortage of deals in our market and houses dont stay on the market for long.  So to have found this deal while it is a seller's market should just serve as a testament that there is no replacement for getting out there and pounding the pavement.   I have a couple more deals that I am working on getting under contract and I hope to continue expanding this business.  I am so grateful for all the help that bigger pockets has been. For my mentors who have believed in me.  I absolutely love this!