Christmas Bonus Wholesale Deal

[Owen Dashner]

Investment Info:

Single-family residence wholesale investment in Omaha.

Purchase price: $129,000
Cash invested: $450
Sale price: $153,000

Contributors:
Brandon Tauber

This was an off-market deal from a direct mail letter just off of 50th and Leavenworth in Omaha. The house was in a sought-after redeveloping area in midtown, and the owners needed a quick sale with some extra time after closing to get things moved to their new house. This house needed quite a bit of work, so we got a pretty sweet deal on it. We decided to sell it to another investor who was looking for a rehab project instead of rehabbing it ourselves over 3 months during the winter.

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

Off-market single family homes needing work in good areas are our favorite deals.

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

We got a call from one of our direct mail letters. The owners were pretty negotiable on price in exchange for us making it a really easy transaction for them, with post-closing possession. They left a lot of things behind that we ended up cleaning out.

How did you finance this deal?

Line of credit

How did you add value to the deal?

All we did was a cleanout of all the stuff left behind, which was quite a bit. It ended up costing $450 for the cleanout.

What was the outcome?

We sold the house directly to another local investor who we had been talking with. He was excited for a good rehab project with some room for profit. We were able to sell it quickly and profit about $21K after soft costs.

We got the deal bought and sold within 1 month, which meant a nice little Christmas bonus for Red Ladder.

Lessons learned? Challenges?

We debated quite a bit about doing the work to the property and selling it as a retail flip, as the ARV supported around $230-240K. But with 3 full floors of the house plus the basement needing work, we decided to punt and make a quick $20K profit instead of a slow $35-40K with a lot more risk and time.