Hey BP community!
I run a wholesale team that sources and assigns 4-5 deals a month here in Virginia Beach. I just locked up a 3/1.5 1350 sqft townhome yesterday that is in GREAT condition. No work necessary. No updates necessary, it's market ready. Trying to figure out the best way to go about it
The Numbers:
$81,000 Purchase Price, closing end of April (Got at a GREAT price)
Rehab: <$1,000 (i would pressure wash and do some paint touch ups, but that's IT)
Closing costs ~$2,000
ARV: $150,000
The Options
Wholesale: I could easily wholesale this to an investor who will either rent it out or just buy and re-list on the market. Would assign at $100k. I would make $19,000
Wholetail: This is very similar to wholesale, I would actually use private or hard money and actually close on the property, then list on the market the next day after staging and getting professional pics. I am confident it will get $150,000. I'm looking at about $2000 closing costs on the front end, if I pay 6% for the loan over 90 days (it won't take longer than that to close and resell) that is $5000, and closing costs of 10% ($15,000) I am looking at ~22,000 in expenses from start to finish. $150,000 - 22,000 - 81,000 = $47,000 profit
Hold as rental: $81,000 purchase price, I get a loan on it for 70% LTV = $105,000. I cash out $24,000 (tax free, right?) and have about 45k in equity in the property. Because my credit history will not allow me to get a conventional mortgage (not bad credit, just no length of history, I'm 19 years old), companies like limaonecapital would charge about 6-7% for a 30 year mortgage, which would cashflow after all said and done about $200-250 a month. So I make $24,000 and add 45k to my net worth.
So before you ask the legendary questions "well what are your goals?" I am in a race to increase my network to $1MM (Currently at $50,000) so I can join the GoBundance mastermind (look them up! @Brandon Turner is in there). I am also moving out to LA in the next 2 months to go build an artificial intelligence company, so need cash for living expenses. Again, I have crazy dealflow because I built my business around that and will have 2-3 similar to this coming later this month and the next.
I currently own 1 rental property that I acquired as a sub2 (tenant moving out at the end of this month) Have a contract out on another sub2 and then negotiating final contract diction (not terms) with an owner of a vacant 4-plex.
I think just writing this out helped me decide which direction I would like to go, but I would love to hear some feedback to shed some light on possible blindspots! Have wholesaled 30 houses in the last 8 months but its good to feel like a newbie when it comes to buying to own!!! :D
