Real Estate Deal Analysis & Advice

Best Deal Ever Show #18: How a $20K Property Turned Into $100K Net Profit

Expertise: Real Estate Investing Basics, Landlording & Rental Properties, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Wholesaling, Personal Development, Flipping Houses, Business Management
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With a fast, “go with your gut” approach, Shawn Wolfswinkle was able to find a gem of a property that truly is one of the best deals that we’ve seen.

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Shawn owns Texas Turnkey Properties and also owns a property management company. He has 18 staff members, two offices, and manages over 1,300 homes in the greater Houston, Texas, and Albuquerque, N.M., areas. Texas Turnkey Properties takes on the role of building new construction (selling at less than $100 per square foot), while also renovating properties to rent out.

All this to say, Shawn absolutely has a knack for finding the best investment opportunities!

How Shawn Finds Deals

One of the primary ways that Shawn has been able to get a phenomenal ROI with his new construction in the last three-and-a-half years has been by finding great deals on lots and building a large quantity of the same model. (He currently builds around 130 new units per year.)

While finding deals on lots can be tricky, one of the primary ways that Shawn is able to find deals on lots is through aggressive pay per click advertising and direct mail.

Shawn’s Best Deal Ever

One of Shawn's best deals ever was in a little town called Round Rock, Texas. Shawn heard through a contractor that an elderly woman wanted to sell her home after her son, a developer, said it wasn't worth anything due to some foundation leveling that needed to be done.

Related: Best Deal Ever Show #15: 2 for 1 Using the BRRRR Method With Brittany Arnason

What was incredible, though, was that the owner only wanted land value for her home, which amounted to $20,000—even though the home would likely have appraised for $135,000!

After looking at the property on Google, it almost seemed like the home was too good to be true. That same day, Shawn immediately decided to drive three hours to meet the owner and see the house in person. By doing so, he found out that the house only needed cosmetic work! Everything from taxes to the title were clean.

Shawn was ready to close the deal that evening. Writing a check and signing a warranty deed, the house became his on the spot.

The primary risk involved was that Shawn didn’t opt to have title insurance, but his company had the margins to absorb the cost if this investment didn’t turn out to be what he expected. He figured a potential title issue was worth the risk of potentially losing out on this killer deal—so he still decided to close then and there.

It was only 55 days from the time Shawn got the lead to when he re-sold the home for $165,000. Renovations only took two weeks and cost $25,000. All that was needed was foundation leveling, new lighting, hardware, flooring, paint, and countertops.

How to Apply This Strategy to Your Business

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Shawn’s advice for those wanting to do more investing is that hustling and acting quickly is key—or else you’ll get beat.

Related: Best Deal Ever Show #13: Investor Buys Entire Ghost Town—Wait, What?!

A book that he goes through with his staff and recommends to others is Relentless: From Good to Great to Unstoppable by Shari Wenk and Tim S. Grover. A theme from the book is that “when you’re in the zone, you don’t think, you just act.” He says that you need to be willing to move and be tenacious to get deals like the one mentioned above.

For anyone wanting to find a better deal, what are some strategies that you’ll start implementing to help you act more quickly?

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What’s the best deal you’ve ever found? Questions about Shawn’s story?

Let’s talk below.

Ken Corsini G+ is the host of the Deal Farm Podcast (on iTunes) and has 10 years of full-time real estate investing experience...
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    Michael P. Lindekugel Real Estate Broker from Seattle, WA
    Replied 6 days ago
    if the home appraisal would likely be valued as-is at $135k , then why would the seller choose to lose $115k and sell for $20k?
    Patrick Torres Rental Property Investor from Albuquerque, NM
    Replied 6 days ago
    Unless facts were omitted from the story, because she trusted her son who gave her very bad advice.
    Beau B. Bray from Gloucester, VA
    Replied 4 days ago
    I'll admit that it's a great deal, but is it just me? Or do aspects feel a little icky? Like an elderly woman was take advantage of...
    Michael P. Lindekugel Real Estate Broker from Seattle, WA
    Replied about 21 hours ago
    in WA State it is called elder abuse and equity skimming.
    Moyra Rasheed from Dublin, California
    Replied 4 days ago
    Yes I feel that this elderly woman was taken advantage of. I know we are on here to earn more, but I have my limits... I know that I am not as rich as investors but there are some things that are difficult to do- like not let her know that her house was actually worth something.
    Dan Sheeks Rental Property Investor from Denver, CO
    Replied 4 days ago
    I wouldn't be able to sleep at night knowing I stole $100k from an elderly woman. It doesn't matter what her son told her. I've found it's always best for the long run to be honest and transparent with people. But to each their own...
    Jill Curran from Little Rock, Arkansas
    Replied 4 days ago
    Agreed. "Deals" like this are what gives RE investors a deserved bad name.
    Hope Fick Real Estate Agent from Warrenton, Missouri
    Replied 4 days ago
    Not just you. People take bad advise all the time unfortunately.
    John Murray from Portland, Oregon
    Replied 4 days ago
    I just made $110K on a flip and zero taxes. I lived there for a few years and vacated for reno and put in 3000 hours of my work. I did not rip off an elderly ignorant women. Karma is a bitch and it's coming for Ken.
    Jackson Hart from Petaluma, California
    Replied 3 days ago
    agreed
    Jackson Hart from Petaluma, California
    Replied 3 days ago
    oops, yup I mean Shawn has karma coming for him?
    James McKenna from Northern New Jersey
    Replied 4 days ago
    John Murray - Why are you calling out Ken? The story is clearly about someone named Shawn....
    Jake Zamesnik
    Replied 3 days ago
    I'm very new here but this article made me disgusted at the way this dude took advantage of an elderly womans ignorance. I'm glad to see others on here felt the same.
    Jackson Hart from Petaluma, California
    Replied 3 days ago
    Hmmmm, I don't mean to sound like a troll (I love Bigger Pockets!) but doesn't this kind of sounds like he knew that an elderly women was misinformed, took advantage of her, then screwed her over for significant gains? Success is built upon good strategy. Maybe the bigger details are missing but this sounds similar to a con (Not saying it is one though).
    Joan Donnelly from Cincinnati, Ohio
    Replied 3 days ago
    This is a horrible story and why investors can get a bad reputation. Old people do not have the means or time to recover from this. Many times their house is their largest asset. They could also not have the mental facilities to make wise decisions. Shame on you. How would you like some jerk taking advantage of your grandmother like this?! Respect your elders and grow a conscience.
    Sherry Norman Wholesaler from Kenvil, New Jersey
    Replied 3 days ago
    If the son was a RE (not software, or something else) developer, he certainly should have been aware that the house was not worthless. I have a hard time understanding how a son who worked in this field would have told his own mother something so off-base. Like many other commenters, my reaction is disbelief.
    Sherry Norman Wholesaler from Kenvil, New Jersey
    Replied 3 days ago
    Sorry to add another 2 cents, but may I also point out with no disrespect to the author that the best blog posts are about things many of us would be able to use in our investing lives. I think that I can pretty safely predict that very very few of us will ever come across a deal like this. The part about Shawn being so successful b/c he acted so quickly is also not widely relatable to most of us. Even after overcoming any ethical misgivings most of us have instinctively felt and expressed here, how many of us have $20k sitting around like Shawn that we can take a flyer on? A situation would probably more often arise that the investor is being set up in some way and loses the $20k.
    Matt O'Brien Rental Property Investor from Plano, Tx
    Replied 3 days ago
    I wonder how he would like it if someone did that to his mother? He's a shark.
    Tim Kalliomaa
    Replied 2 days ago
    Wow, this thread really has me thinking. Yes, real estate investors need to find wholesale deals for the numbers to work on a rehab, but it is important to create a win-win for all parties involved. Many people should have been involved in helping set the asking price- the seller, her son, a real estate agent, a foundations contractor. Did the buyer know for sure the house could be releveled? Probably not if he was buying it on the spot without a foundation contractor on hand to appraise the situation. So while this deal turned out very lucrative for the buyer, the whole house may have needed to be demolished as well. Also, there is a lot of assumptions as to the financial and mental status of this "grandmother". With a real estate developer son, she should be financially well-taken care of and perhaps was moving in with the family now that her house is sold. Regardless, still time to make this right if this was not a win-win for everyone.
    Deb S. Rental Property Investor from Punta Gorda, FL
    Replied 2 days ago
    I don't know how some people sleep at night. This is just wrong and deceitful!
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied 1 day ago
    Well $100K ain't to bad at all...