All Forum Posts by: Melanie Hartmann

Investment Info:

Single-family residence fix & flip investment in Baltimore.

Purchase price: $55,000
Cash invested: $30,000

We are in the middle of rehabbing this property. Will update once it's sold!

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

Even though it requires a gut renovation, the property was small (less than 800 sq ft with no basement) and is located in a great area!

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

We found this deal by cold-calling. I made an offer 15K less than what the seller asked for over the phone. The seller got back to me a few days later to tell me that if I could match the highest offer he received (55K) he would rather sell the property to me.

How did you finance this deal?

10K downpayment of my own cash and then used a hard money lender to finance the rest of the purchase price and 100% of the rehab.

How did you add value to the deal?

Renovating the entire property

What was the outcome?

To be determined

Lessons learned? Challenges?

Thus far, we have had to fire the contractor that we hired. It is incredibly important to only include reliable and trustworthy people on your team.

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

Yes, I am currently working with a real estate agent and his wife is an interior designer. We have gone over some rough ideas of what to do with the property moving forward and now I'm just waiting on bids to come in for what the work will actually cost to determine best next steps.

I haven't invested in this area but word on the street is, depending on the area, it is desirable for rentals and homeowners alike.

 Much better to walk away from a bad deal than potentially being stuck with one. Ask me how I know. Hahaha!

I look forward to hearing about the next one you do purchase and how all the numbers shake out. I watched a webinar on buying multifamily houses and how to add value and utilize the 1031 exchange. It reignited the fire for sure! One day...

 My pleasure! I hope some of it was useful. Keep us updated as you progress through your journey of investing in real estate!

These are excellent points! 

I have not employed the strategy of dual representation myself so maybe I shouldn't have suggested it. Jerry Norton swears by it, and typically it seems that strategy is best for those properties that are in distressed condition and have been on the market for quite some time so it's clear there are no better offers coming in.

And yes, when I assign a contractor to another buyer, I request proof of funds, especially those whom I have not worked with before.

Thank you, Mike! I wish they were all this easy! haha! 

Investment Info:

Other other investment in Baltimore.

Purchase price: $18,000
Cash invested: $21,000
Sale price: $65,100

The house needed to be torn down. I purchased this house for cash, did minimal work, and then listed it on the MLS and sold it to a builder.

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

The price I was able to purchase it at.

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

We found this deal via cold-calling. We reviewed the comps in the area and made an offer. Upon viewing the property with the owner, it was evident that it was in much worse condition than anticipated and we were able to renegotiate a price.

How did you finance this deal?

Cash

How did you add value to the deal?

We paid someone to board the front door and mow the grass while it was in our possession.

What was the outcome?

We made approximately 41K on this deal.

Lessons learned? Challenges?

That there is a lot of value in land, depending on the area.

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

Yes, a real estate agent did a flat rate listing fee for this property for us.

As an update, it took me quite a while to know very little about this wholesaling business to close my first deal (almost 6 months to the day) and several more months after that until things became more consistent.

We're now averaging 1 to 2 wholesale deals a month these past few months primarily from cold-calling. Most of these are closing from follow-ups. We're onto our second investment property and I can tell you, it's not going well. I'm having to fire the contractor and essentially start over from scratch. We're right in the middle of trying to correct course and see if that's even possible because in all likelihood the prior contractor provided completely bogus numbers. 

Hopefully by this week we'll have a better idea of what reasonable next steps are but flipping is a risk for sure. I'm writing about it in our house-flipping blog. This blog can be found on my profile but it will be further detailing my journey of building a house-buying company and how I've grown along the way. 

I can hands down say I am NOT the same person I was when I posted the first post of this forum. It has taken a lot of growing to overcome the fear and obstacles that come with doing something as crazy as leaving a relatively steady career to being self-employed and doing something you've never done before.

Even with the major headache and heartache I currently find myself in, I do not regret it as a whole. It has been the single greatest decision I have ever made. I'm just bracing myself for worst case scenario until I get some real numbers and plans in place. 

Thankfully, I've usually been able to quickly weed out the bad and surround myself with good people but occasionally one still slips in, such as the last contractor I hired for my current flip project.

It's not all fun and games, but it's certainly worth the ride!

Hi Jack! And Welcome!

Jerry Norton on YouTube has a lot of great material on how to do this. If you are just getting started, it still is possible to find good deals on the MLS if you are quick. You can also often negotiate a slightly better deal by contacting the listing agent and asking them to represent you in the transaction so they are able to keep the full commission.

Hi Kevin! And welcome! 

The most important thing is mindset. I know most folks won't say that is where to start but, after starting a house-buying company, at least in my experience, until I had my mindset heading in the right direction I was my biggest barrier. 

After that, you will need to decide on your ultimate goal for investing in real estate. It's ok if this changes, and it should really. As the more you experience, grow, and learn, you'll have a better understanding of how things work and what ventures may be best suited for your personality and lifestyle preferences.

For me, I ultimately want to own large multi-unit buildings where I am mostly hands off. My plan was to buy small multi-families and then work my way up over time. However, I decided to leave my career and start wholesaling. Then, as I've gotten my wholesaling legs, I've begun to use the capital from that side of the business to purchase properties to resell or fix-and-flips. Even though I never really wanted to get into flipping houses, as I was afraid of all that would go wrong. And of course, what can go wrong, sometimes will as I'm finding with the flip I've got going on in Baltimore, MD right now.

I've had to fire the contractor and start over from scratch essentially. So, that's pretty scary. 

It's all in your risk tolerance. You can get into wholesaling with little money and little risk but just make sure you have the right things in place and try to find a mentor who will guide you without gauging you, if you know what I mean