OfflineMy partner and I finally finished our first wholesale deal! We've done some other deals, but this was our first wholesale. We originally locked up the property at $175k. Needed about $70k in rehab and ARV of $330k. This deal was an ABSOLUTE rollercoaster!!! Here's how it went down!
At first we had a funder on board with us to fund the deal 100% and split profit 50/50. Then they decide to drop out...With one week to closing we were scrambling. We started shooting it to prospective buyers and weren't getting luck. Thinking we were going to lose the deal we finally decided to go and talk with the owner. We had built an awesome rapport with him, so this was an easier convo than we thought. What we got him to agree to was a contract for deed on a 12 month term with $25k down.
We then found a buyer who would be willing to buy that contract from us and give us a $15k assignment fee. We were pretty happy! Then, yesterday, the day before the closing the new buyer started trying to strong arm us for a couple items in the closing costs, which totaled $642. At first we were upset about this and were very annoyed a guy with this much money would do this last minute to us over such a small amount. Our cooler heads prevailed and decided to just eat the $642 for the sake of the deal, after all we figured $14,358 is a lot better than 0!!
We're pretty happy with the deal, the only thing we really took from it was that instead of worrying about things, to just ask. If we would've asked the seller if a CD was possible the second our funder fell thru, we would've saved ourselves some serious worry! So from here on out, we are going to JUST ASK!!! It definitely can't hurt!
All in all, we've now wholesaled a deal, and can't wait for the next one! Our I BUY HOUSES car magnets just came in the mail, so the leads should start flowing even more!!
Jonny Carlson
612.963.3445
"Looking to invest in properties in the Twin Cities"
#FLIP-Faith.Love.Integrity.Positivity.
You were very smart to keep a cool head and realize the profit you had to gain, over what you had to lose. Way to get it done! Can you explain the Contract for deed more? This is also known as a Land contract. I thought there is sometimes problems with this that someone mention on here before, but not sure what it was. As a realtor what problems would one have to watch out for? Thanks, Tammy
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
Thanks Tammy! This particular contract looked like this: $175k purchase price, $25k down, 5% interest based on a 30 year ammortization schedule and contract length was for 1 year. We were able to do such a short contract because we knew it would just be rehabbed then sold right away. Pro's for the buyer are that buyer is only bringing $25k to the table rather than the whole $175k, basically saving him $150k out of pocket. For the seller they still get their purchase price they want, although they have to wait a year, but are also getting monthly payments as well.
I'd say if you are going to get into a contract for deed scenario and planning to do rehab on it, make 100% sure this is in the contract. The seller has to know that you will be doing work on the property. Make sure you have that all agreed upon before taking the contract. Also, make sure it is recorded in the county which you are purchasing. I'd also suggest having a title company do a title search to ensure there are no other liens or mortgages on the property. Other than that, they are an awesome way to gain control of a property for much less money into it.
Jonny Carlson
612.963.3445
"Looking to invest in properties in the Twin Cities"
#FLIP-Faith.Love.Integrity.Positivity.
Yes, that was it to record the contract with the county and to make sure of no other liens and mortgages. Thank you for the breakdown. This truly sounds like a good way to be able to gain control of properties. Tammy
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
This post goes to show everyone don't give up on your deal if your buyer backs out. Scramble up and find another exit strategy. Have faith and believe it could happen. I love reading post like this, gives me motivation and determination to succeed.
Reynold Orozco
Thanks Reynold! I'm a strong believer in keeping the faith no matter what! I believe you will succeed to!!
Jonny Carlson
612.963.3445
"Looking to invest in properties in the Twin Cities"
#FLIP-Faith.Love.Integrity.Positivity.
Nice job assigning the C4D Congrats!
Cathy B
Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...