All Forum Posts by: Tai DeSa

Investment Info:

Small multi-family (2-4 units) wholesale investment in Wilkes Barre.

Purchase price: $55,000
Cash invested: $1
Sale price: $75,000

This was the wholesale deal where I made my biggest wholesale fee, a total of $20,000. Through direct mail, the seller contacted me. We agreed to a $55,000 contract price for this duplex. I found a cash investor willing to pay $75,000. Since the Sheriff's Sale was imminent, I had to get the investor to buy quickly. It worked out. I believe he rents both sides for $750 each, which brings in $1,500 a month for him on the $75,000 purchase.

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

I sent direct mail to people facing foreclosure. The owner responded.

What was the outcome?

I got a cash investor to buy the property right before the Sheriff's Sale. He bought it for $55,000 and paid me a $20,000 wholesale fee. I believe he rents each unit of the duplex for $750 a month, bringing in $1,500 a month on his $75,000 purchase.

Investment Info:

Single-family residence wholesale investment.

Purchase price: $90,000
Cash invested: $1
Sale price: $105,000

This was a classic assignment of contract. I ran a $25 "We Buy Houses" ad in a Homeowners' Association newsletter. A seller called me and said he wanted the house sold in 14 days. I told him it would have to be a low price to attract an investor. He said he'd be fine with $90,000, as he had no mortgage. I found an investor 3 days later through word of mouth. He paid me a $15,000 assignment fee and bought it within the 14 day period.

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

I ran a $25 "We Buy Houses" ad in a local Homeowners' Association newsletter. A tired landlord called me. He wanted quick cash. I found the cash investor through a networking group I was a part of. The whole thing came together in 14 days. The investor agreed to pay me a $15,000 assignment fee and buy the house for the $90,000 price. The investor installed new paint and flooring, and then he sold it for $150,000.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $60,000
Cash invested: $90,000
Sale price: $100,000

This was a flip where things didn't go as planned. We bought it as a short sale in a desirable neighborhood. We mismanaged the renovation and never completed the project. We ended up selling it to a landlord who finalized repairs and rented it.

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

It was a short sale brought to us by the listing agent.

How did you finance this deal?

Cash

How did you add value to the deal?

We started a major renovation project, yet we went through three contractors before deciding to sell the unfinished project to a landlord.

What was the outcome?

We wasted our time and learned valuable lessons. Thankfully we bought it low enough that we recouped our money.

Lessons learned? Challenges?

I allowed a business partner to run the renovation, and he picked low bidder contractors who failed to complete the job. I should have taken a more active role in the renovation, or perhaps I should have encouraged the sale right away to another flipper.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $210,000
Cash invested: $40,000
Sale price: $306,340

We bought this as a short sale at the height of the housing bubble. We fixed it up and sold it via an auction as the market was shifting downward. We're lucky to have sold it for what we did.

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

We mailed out letters to people facing foreclosure. The seller contacted us.

How did you finance this deal?

We obtained a mortgage loan.

How did you add value to the deal?

We performed cosmetic improvements.

What was the outcome?

We luckily sold it for a profit at an auction just as the real estate bubble burst.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $95,000
Cash invested: $35,000
Sale price: $151,000

Bought this as a short sale. Should probably have offered a little less and probably would have gotten it. Sold it 51 weeks later for a modest profit.

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

It was a desirable neighborhood.

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

I did direct mail to people facing foreclosure. The seller contacted me.

How did you add value to the deal?

I renovated it pretty extensively.

Investment Info:

Retail buy & hold investment.

Purchase price: $116,000
Cash invested: $35,000
Sale price: $69,000

This was a bad deal yet a good lesson. I was the only one who showed up at the auction. The seller owned a failing mattress business. There was only 1 parking spot. My gut told me not to buy it. I rented it out to a variety of businesses who struggled there. Eventually I sold it at a loss.

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

I had a mentor who wasn't a good mentor. He was an auctioneer trying to auction off the building. He convinced me to buy it even though I was the only one at the auction. I was new to investing and naive. I didn't perform any due diligence.

How did you finance this deal?

I did an installment contract (owner financing) for one year. After 12 consecutive payments, I did a cash-out refinance. I did pull out a lot of cash.

How did you add value to the deal?

I helped three different tenants try to grow their business here. In the end, it wasn't a high traffic location and we all struggled.

What was the outcome?

I sold the property via a short sale to someone who could improve it and make it better.

Lessons learned? Challenges?

I should never had bought a commercial property with only one parking space. Also, I should have performed due diligence. When I was the only one at the auction, I should have walked out the door and let them chase after me. I trusted the auctioneer to represent my best interests, which was foolish on my part. I should have purchased a building much closer to where I lived, as this was 60 miles away. I'm actually glad I learned these lessons.

Investment Info:

Single-family residence fix & flip investment in Pocono Summit.

Purchase price: $65,000
Cash invested: $1
Sale price: $90,000

The vacant house had frozen pipes and bowed wood floors. My business partners and I offered $65,000 cash. The seller agreed. We found a flipper who was willing to pay $90,000. We owned the house for about half a day. This deal was one of my first 10 deals. It was a good one. I still work with that flipper today.

What was the outcome?

The flipper bought it for $90,000 from me. I helped put him into a $215,000 lease purchase sale. After four years, that sale didn't work out. I sold the house for him for $130,000.

The year was 2008. The market was shifting downward rapidly. I based my $129,900 ARV purely on my agent's belief in that being the ARV. I didn't see the market values dropping as fast as they were. We also assumed renovation costs of $10,000, without actually getting a bona fide contractor estimate. At those assumptions (bad ones), the purchase price of $76,000 seemed reasonable. I borrowed $100,000 and was lucky to get out of the deal in 2010. The buyer who bought it from us later was - sadly - foreclosed in 2016. A flipper bought it for $53,999 in 2016 and sold it for exactly $129,900 in 2017. That flipper wasn't me.

Investment Info:

Single-family residence fix & flip investment in Freemansburg.

Purchase price: $23,500
Cash invested: $24,000
Sale price: $40,000

I made an offer of $23,500, and it was accepted. I found a flipper through networking. The flipper was willing to pay $40,000 for the house. I bought it for $23,500 and sold the next day for $40,000. The flipper sold it later that year for $79,900.

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

I found the seller through networking, and I also found the buyer through networking.

What was the outcome?

The flipper bought the house from me for $40,000 and sold it later that year for $79,900.

Investment Info:

Other fix & flip investment.

Purchase price: $1
Cash invested: $3,000
Sale price: $100,000

With the help of an attorney, we helped a seller with the deed-in-lieu of foreclosure on their house at 4794 Spring Drive. The septic system was on 4802 Spring Drive. The seller said he would deed us the lot at 4802 Spring Drive as our compensation. We had a buyer pay us $40,000 toward the $100,000 purchase of the lot, but he defaulted. We found a buyer willing to pay $63,000 for the lot once we got the bank that owned 4794 Spring Drive to sell the house. So, we made $100,000.

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

We sent direct mail to people facing foreclosure. The seller's house at 4794 Spring Drive was being foreclosed. The septic system was on the adjacent lot at 4802 Spring Drive. The seller said he would deed us the lot if we negotiated a deed-in-lieu of foreclosure. Once the bank took ownership of the house, the only party they could sell to was us. We had a buyer default and forfeit his $40,000 deposit. Then another buyer paid $63,000 to buy the lot. We netted $100,000 after expenses.

How did you finance this deal?

The deal only involved putting up money to pay the attorney and the transfer tax on the lot. That was it.

How did you add value to the deal?

We helped the seller achieve his outcome. The flipper fixed up a house and lot and sold it for $200,000.

Lessons learned? Challenges?

The keys to this transaction were patience and bringing in an attorney.