Skip to content

Posted over 7 years ago

Early Adventures of a Motivated Newbie

My wife Heather and I visit her parents a few times a week. This may normally be a husbands nightmare, but I love her family and we live very close. In their neighborhood, which is the nicest in here in our hometown of Alvin, Texas, their has been a vacant house that we talk about every time we pass on the way through. It is covered with bushes that need love, untrimmed trees, dirt, a really messed up fence and an ungodly blue paint color. The more I develop my love of RE and get excited about finding my first deal, the more I think about buying it. "I wonder what that house looks like on the inside," I say each time we go by. But it's not on the market, so I just go about my day. Yesterday I was driving for dollars alone when I drove by for the 100th time probably, and I stopped in front of it. "I'm tired of this burning curiosity I'm just going to call the owner," I said to myself (I talk to myself a lot). The house should be beautiful and worth a ton given the white brick and large lot it sits on. This neighborhood just had a house down the same street sell for $260K, which is a new high in the neighborhood! I had found the owner on our county's appraisal district website and googled his name to find a phone number earlier that day in another fit of curiosity, so this is perfect. "Just DO it" I told myself. A huge anxiety washes over me when I think of calling a stranger and asking if they want to do something as big as selling their property. In spite of my heart pounding and head sweating, I remembered again what Grant Cardone says in his book The 10X Rule, "Money lives on the other side of fear." This principle has been improving my life for the past few months. Each time I face my fear, I seem to get a huge positive result. So, I went through what I wanted to say for the 100th time and pressed the call button. Confirming the fact that FEAR stands for False Events Appearing Real, this guy turned out to be very nice. We chatted for a minute about the house and his plans for it that he never got around to. I inquired about his willingness to sell and to my surprise he had been asked before and already contemplated taking $150 for the house AND the lot next to it that he also owns. I immediately thanked him for his time and told him I would love to go see the home and gather more information. He agreed to meet us there as soon as he leaves his office.

Later we met him there. I bring my mother in law along because she will be my business partner in our flipping business (again, a normal husbands worst nightmare). She has a very talented eye for restoring old antiques and has a million and a half ideas for home designs. I am an idiot when it comes to design and creativity in this sense, so it works out perfectly. It turns out the gentleman had owned the property since it was built in 1974, and purchased the lot next to it later on. The place is on one of the first corners you come too in the neighborhood. The home's driveway is on the main thoroughfare, so his intention was to build a freestanding garage on the side-street, and enclose the current garage to make it a huge master suite. (We are happy he didn't, because this gives us the bright idea to possibly do it ourselves and add incredible value). It has one small leak in the roof where the flasher is separating from the chimney, all of the horrible 40 year old carpet needs to be replaced, which would remedy the stench in the house, and the bathrooms could stand to be remodeled and updated. I had a nice chat with the old lawyer, and discovered he had rented it do a tenant from hell, and that it has been vacant for a few months now. He didn't have it listed so it wasn't a rush, but he wouldn't mind getting rid of it as I could tell form our chat. We thanked him again and told him we would be in touch after some discussion and analysis.

The chat with my mother in law went a little like this...

Her: Michael I just wouldn't do all that for $150. It stinks and it needs all new floors. The master bath was tiny, and the garage is on the main street,

Me: Smells to me mean money, and the floor seems to be the worst of it. This place could really pop with some landscaping, paint, and a good pressure wash. Lets think on it and talk Monday when I can get some comps.

Her: OK well Im glad we looked at it but IDK. I would maybe do it all for $125-130, and put $25-30 into it. 

Me: I can tell you're negative about the home values, and doing a ton of work. To me though it looked great. I have done extensive analysis of the area and If I am confirmed by my agent's thoughts and the comps, we will go for it. Finding the money is what I do. I will see you guys later I'm sure.

So about a half hour later I'm on BP surfing the forums about hard money, remodeling bathrooms and floors, and negotiating when she calls me.

Her: OK the more I thought about it, the more I know this could be a gem. I have so many Idea's for making the master bath HUGE, and making the place look spectacular. (She ran through about 20 minutes of Idea, none of which I can remember lol. I told her to write it all down.)

I immediately called my agent and I'm set to get comps Monday. From my analysis, we could put $30K into this house with a little sweat equity and make it look badass. If the comps give this place the potential to sell for anything over $220, we will offer $125 with room to go up to $135, finance with hard money, and close quickly. This could leave us room for profits ranging from $10K to $25K. We might be well on our way to our first flip! 

Here's to dreaming! Even if it doesn't work out at the price we need I have learned that you need to just face your fears to find the deals. This is what separates successful people from the non successful....staying comfortable.


Comments (5)

  1. Good luck! Thanks for sharing.


  2. Michael, Inspiring story for a budding investor like myself. You make the process sound much less intimidating! I am excited to hear the results of your first deal.

  3. Good for you, Michael! I'd really like to follow your story through this process - please keep us posted.



  4. @Michael Koncaba Looking forward to hearing how it turns out!