Wholesaling for $256 an hour.
When I learned about "wholesaling" a few years ago my first thought was, "Why would anyone give up a great deal for a few thousand bucks?"
Really great deals can be hard to find when you rehab-to-rent or fix&flip, so I just couldn't see the intelligence in handing over a great spread to someone else for a little quick cash. There are tax implications and ongoing marketing costs, as well as just leaving lots of money on the table! However, after listening to BP podcasts all year and reading some great success stories, I have had a paradigm shift. Some great recent podcasts on wholesaling include SHOW 37 and SHOW 42, but there have been many others. When BP interviewees described the process, it just sounded so clean and tidy, compared to some of the big, messy rehab projects I've done.So, just over 2 weeks ago, I made a very low-ball bid ($40k plus fees) to a bank on a small house in an area where I would never look for a rehab project for myself. It's not a "war zone" by any means but it's more than an hour from my house and it's an older, working-class neighborhood. (ARV $95K) The bank took 5 days to respond but they accepted my offer. I immediately put on the and also on a few local websites. I made up 2 dozen flyers and handed them out at a local REIA networking lunch. By the next day I had an earnest money check from a local investor (and BP member). Within a week I had 4 cash back-up offers and about 8 people to add to a future buyer's list.
My Net was $7,700 and my total time spent was about 30 hours, including two trips to the property and two trips to Kinko's. Most of the time was spent in my home-office with phone calls and emails. That's about $256 per hour and No swinging a hammer... No sawdust... No babysitting subcontractors. I think I could get used to this. I just hope I can repeat it. Now, I just have to find some tax strategies that help reduce active income tax liabilities.