My most profitable flip ever

[Tai DeSa]

Investment Info:

Other fix & flip investment.

Purchase price: $1
Cash invested: $3,000
Sale price: $100,000

With the help of an attorney, we helped a seller with the deed-in-lieu of foreclosure on their house at 4794 Spring Drive. The septic system was on 4802 Spring Drive. The seller said he would deed us the lot at 4802 Spring Drive as our compensation. We had a buyer pay us $40,000 toward the $100,000 purchase of the lot, but he defaulted. We found a buyer willing to pay $63,000 for the lot once we got the bank that owned 4794 Spring Drive to sell the house. So, we made $100,000.

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

We sent direct mail to people facing foreclosure. The seller's house at 4794 Spring Drive was being foreclosed. The septic system was on the adjacent lot at 4802 Spring Drive. The seller said he would deed us the lot if we negotiated a deed-in-lieu of foreclosure. Once the bank took ownership of the house, the only party they could sell to was us. We had a buyer default and forfeit his $40,000 deposit. Then another buyer paid $63,000 to buy the lot. We netted $100,000 after expenses.

How did you finance this deal?

The deal only involved putting up money to pay the attorney and the transfer tax on the lot. That was it.

How did you add value to the deal?

We helped the seller achieve his outcome. The flipper fixed up a house and lot and sold it for $200,000.

Lessons learned? Challenges?

The keys to this transaction were patience and bringing in an attorney.