Updated over 5 years ago on . Most recent reply
Hoarder House Homerun Deal
Investment Info:
Townhouse wholesale investment.
Purchase price: $85,000
Cash invested: $4,500
Sale price: $130,000
Barbies, hoarding, Covid scares, mold, Resident Evil references - this story has it all. We bought this hoarder home in a great area in Omaha. It took 5 1/2 forty yard dumpsters to clean everything out. The cleanout cost $3,500 and made a huge difference. After the cleanout, we showed it to one buyer last week, and he is closing on it tomorrow for $130,000. With a few holding costs over 3 weeks plus the cleanout, we are into the property for $90,000 and will end up with a $40K profit. I love hoarder houses!
What made you interested in investing in this type of deal?
The house was in a great area with a lot of room for profit, we would just have to deal with a huge cleanout.
How did you find this deal and how did you negotiate it?
We got a call from the owner's brother (POA) off of a direct mail letter we had sent months ago. We did a walkthrough and videoed the whole thing, sending a link to the video to the brother and any other family members who needed to see it. This was so they understood how bad the accumulation of junk was. We made an offer that gave us plenty of room for mistakes and risk.
How did you finance this deal?
We bought it using a LOC.
How did you add value to the deal?
We did an extreme trash out. This took about 35 trips to the dump with our cleanout guy's box truck. He estimated 5.5 40 yard dumpsters full. That's really all we did.
What was the outcome?
We sold it to another investor who we are both friends and competitors with.
Lessons learned? Challenges?
Good cleanout people are invaluable. The challenge was that the owner had contracted Covid-19 and had been in the house prior to closing. We had to wait a week for the house to air out before doing the cleanout. Better safe than sorry. Was actually more worried about tetanus and the plague on this one that coronavirus.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
5 Points Bank and Missouri River Title for the win. Line of credit with 5 Points, super easy and fast closing at MRT.
