My first deal from a wholesaler

[Sachin Bhat]

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $47,900
Cash invested: $26,000

Bought this property from a local wholesaler that I met at a local meetup in California. Let me tell you this is the first property that I am buying from a wholesaler and I did not have a good experience. Overall I think if I hold the property for long term I probably do ok. But it is not a slam dunk deal by any means, it looked like it thogh when wholesaler told be about it. But what I learned from this deal is more valuable than the deal itself.

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

I wanted to implement BRRRR strategy on this deal.

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

Local Wholesaler

How did you finance this deal?

Hard Money

How did you add value to the deal?

Doing the rehab to the rental standards. We added new kitchen cabinets and counters, vinyl flooring and carpet, security door (front and back), lightings, reglazed bathtub, and bathtub surounding, railing to the basement, rewiring whole house, new ac and heater, cleaning up the basement and yard etc

What was the outcome?

Value came in lower that what we expected. Rented the house for $850 per month rent.

Lessons learned? Challenges?

1. Get local third party opinion on the value, neighborhood. Don't listen to the seller/wholesaler.
2. Don't give all the control of your investment to one company/person. It seems easy when you are investing out of state, but don't do it.
3. Get an inspection done before purchase.
4. Build a reliable team before investing out of state.
5. Hire a contractor who doesn't cut corners and give you written estimates. If they decline or make a fuss about giving you written estimate don't hire.

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

Yes. Hard money lender and my property manager was great.