Hey everyone just wanted to quickly share the story of our first successful wholesale deal - here goes!
My dad and I had tried our hand at short sales at the height of the crash a few years ago, and came away with exactly ZERO deals closed after a full year of hard work. We both left the game for a while, but still had the itch...
I decided that I would try investing again, this time focusing on Wholesaling lease options - almost gave up on that after 3 months of no success, BUT stayed with it, renewed my enthusiasm and within a month had flipped a Lease Option for $2,500. Not Bad...
After a few weeks of arguing with myself, I partnered back up with my dad now that I'd had some success. That was January of 2013...after a LOT of struggling to make the partnership work (arguing over what type of deals we wanted to do, who would do what, etc) we finally zeroed in on wholesaling and threw up some bandit signs. I think it was only around 25 signs in a city of 45,000 residents...
The next day we received at least two calls asking us to take the signs down, a nasty voicemail, and after taking a drive to see how many were still up, we were utterly discouraged to see that 90% had been removed. I really thought I was just going to give up and look for some other business to pursue.
Of course it would be later that day that I got a call from a lady who saw one of our signs and she had inherited a house that she wanted to sell. 3 bedroom, 1 bath, needed a lot of work to be comparable to recently sold stuff in the neighborhood. When we ran the comps, we were ready to pack it up again...She wanted $12,000 I think, the house needed $25,000 to be on par with the sold comps, which were selling, rehabbed, for just under $40K cash...
Then it kind of just hit us - we were't going to be selling to cash buyers who would rehab it and resell it themselves, our targets were the buy and hold guys. In that light, the place only needed about $5K in work to be rent ready. It wouldn't be real pretty, but in our area, a landlord could rent a 3 bedroom to a HUD tenant for $850/mo - easy money. So, we threw out an offer to her that seemed ridiculous to us - $5,000, noting all the work that needed to be done. She asked for $8,000 - we held firm at $5,000...we honestly figured we'd be lucky to sell it for $10,000.
She finally agreed to $5,000 and two weeks later we had it sold for $15,000, closed the week after that. Seller sold the house she didn't want, we made a sweet profit, and the end buyer got a killer cashflow property, and he's begging us for more!
I haven't been very active here in a while, but I want to thank Josh for creating Bigger Pockets, anyone who's ever lent advice to me in the past, as well as the countless members whose blog and forum posts I gained so much knowledge from!
Dave
