Wholesale #16, Acton – Sold & Final Analysis

Direct Mail strikes again!!

I closed on a great wholesale deal yesterday that came through my old driving for dollars leads that I haven’t mailed to in over a year. The seller called in June with a property she inherited from her parents. She originally thought she would hold onto it for her kids but after they continued to show no interest, she wanted it sold. This property was partially built in the 1960’s by her father. Unfortunately, he passed away while working on the house and it has remained vacant ever since. A lot of work was left unfinished so she felt that the only meaningful solution was to knock it down and rebuild. After speaking with her, Will could tell that she was motivated to sell to let go of the burden associated with the property and to take care of some personal issues she was dealing with. When asked how much she wanted for it, she said she was looking for land value, which was ~$290k. Seeming like a reasonable asking price, Will told me about the call and we did some research on that specific area of Acton. We found out that it’s one of the nicest areas of Acton with homes selling for $1M+. So Will followed up with the seller to set up a time to walk the property.

Since this would be a straight new construction, I didn’t need to be there to estimate the cost to build so Will met with the seller himself. Once there, he confirmed that the house would have to be a torn down and explained that we could pay her land value minus the cost to remove the house and add a septic system, about $250,000. She felt that our determination of price was reasonable and asked that we send her an offer. Here are a couple pictures of the house:

I sent her the offer and had the property locked up a couple days later. I ultimately decided to wholesale this one because it’s pretty far from my house and my other Acton project has been a pain in the ass to manage. Knowing that Acton is a desirable town and that the market is really hot, I could see that lots were going for low to mid-$300k. In an effort to build rapport with some newer buyers and to not be greedy, I decided to ask $322k for the lot (I know I could have sold it just as quickly at $350k). So I sent an email out to my buyers list and got a ton of interest. One investor came back to me and said he had someone who wanted it and asked if it was okay to market it to the buyer for $330k so he could make an $8k co-wholesale fee. I didn’t have a problem with that but told him there was a lot of interest and the first signed offer gets the property. Later that day, the buyer accepted and we had the property locked up.

Because I didn’t know the end buyer, I required that a $10k deposit to be sent to my attorney. He complied and we were all set to close on July 15th. In the midst of talking with the seller after everything was all set she said she went to the registry of deeds to make sure that everything was filed properly with the probate from years ago. Unfortunately, the woman who was working there said there was no probate on file which would have meant that she couldn’t legally sell me the property. So the seller had to collect all of her documents and go back to the registry. After all of that, a different woman who was working confirmed that the probate was in place and she got wrong information from the other person. That’s great!…but I was seriously stressed about the potential of having her go through probate again in the meantime.

Everything went smoothly after that and I closed yesterday. I think this is a great example of a win-win-win deal. I made a great wholesale fee, the co-wholesaler made a nice fee and the builder is going to make a great profit. I’m really looking forward to checking out the property once the builder finishes.

Here’s how the numbers break down: