$80k+ So Cal Wholesale

[William Bratrud]

Investment Info:

Single-family residence wholesale investment in Homeland.

Purchase price: $250,000
Cash invested: $3,500
Sale price: $370,150

13 Acre Ranch wholesale. Picked up this 13 acre ranch with a 3000 s.f. single-family residence and a 1100 s.f. guest house in need of major repairs for $250K. After cleaning up some minor code violations we immediately put the property back on the market for $120k more than we purchased it for. Everyone else was afraid of this property, We saw the potential! Story of my investment life..........

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

Affordable Acreage is hard to come by in Southern California especially with improvements on the property.

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

Lead was sent to me by a friend referral. I contacted the listing agent and negotiated it directly through them.

How did you finance this deal?

Paid $195K personal cash & borrowed an additional $70K at a flat 10% interest on a private unsecured 6 month note.

How did you add value to the deal?

Corrected code violations which equated to essentially cleaning up a pile of trash and removing some minor dead brush piles and greenhouse disassembly. Total cost was about $3000k

What was the outcome?

We put the property back on the market for $379,000 and went into escrow in about 10 days. That buyer got cold feet so we went with a backup buyer who kept it tied up for another month only to not perform. Finally we entered escrow with a third buyer who closed the deal 45 days later and cleared about $80k profit after paying all of our costs.

Lessons learned? Challenges?

The code violation thing was a surprise. It came from a disgruntled buyer who didn’t get the property for a much lower price $320 to be exact. I’m glad I didn’t sell to him and I’m glad he called code enforcement it ended up getting us a lot more for the property in the end. As we dealt with the code issues the market continued to climb and the final buyers were relieved to have a clean Bill of Heath on the property which was issued by the county after our corrections. Roll with the punches....

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Brad Freeman, with Freeman & Associates. This guy is an animal! He always gets me the best price getting in and out of my investments and is a pit bull when it comes to playing hardball with the other side of the deal.