First wholesale deal, 5-plex, tough deal

[Gus Muller]

Investment Info:

Large multi-family (5+ units) wholesale investment in Saint Paul.

Purchase price: $275,000
Sale price: $282,000

Found a motivated seller for a 5-plex that needed rehab. Original plan was to buy and hold, but decided to wholesale our contract position instead for a $7K assignment fee.

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

The building was in good shape and needed rehab of 2 units. We tend to stick to single family, so we ultimately wholesaled the deal. It was really cheap at $50/sqft at 5,500 sqft.

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

Found it on Craigslist. Negotiated with seller and asked him directly what his bottom dollar was. Took it under contract at $275K.

How did you finance this deal?

Did not finance. Wholesaled it.

How did you add value to the deal?

Took professional photos, marketed the property, did multiple showings to many investors.

Lessons learned? Challenges?

I learned that wholesaling is full of shady characters versus traditional MLS sales. Learned what a "double wholesale" is and got many emails with my property under contract listed by others much, much higher. I discussed my purchase price with the investor that bought it, and he fought hard to lower my assignment fee. The world of wholesaling surely is not transparent, and seller/buyer are still fighting over issues with tenants and the building itself. Dicey deal glad to be done with it.