A wholesale deal with two title twists

[Tai DeSa]

Investment Info:

Single-family residence wholesale investment.

Purchase price: $40,000
Cash invested: $1
Sale price: $50,000

This was a wholesale deal. A person whose house was up for tax sale contacted me. I went under contract to buy the house for $40,000. I knew a flipper who was willing to buy it in cash plus pay a $10,000 assignment fee. The deal worked out.

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

I sent direct mail to people whose properties were on the tax sale list. The seller was willing to sell it for $40,000. He had fooled his bank. The seller's name was the same as his father's name. The father had taken out a loan with the bank and then deeded the house to his son. The father passed away. The son opted not to pay the bank. The bank was willing to release the lien.

How did you finance this deal?

I wholesaled it, so I never owned it.

What was the outcome?

Right after the closing, the Homeowners' Association property manager invoked the first right of refusal clause. Even though they had verbally agreed to permit the sale, they reneged and demanded $5,000. I helped negotiate a $3,000 settlement, which was paid by the title company.