Just wanted to share a little success story from our first wholesale and about networking on Bigger Pockets. I connected with @Bill Kenny on BP back in the spring, we grabbed lunch and quickly realized we shared many of the same goals with investing. We decided to form a partnership on a gentleman's agreement and embarked on marketing to off market deals.
We hit many dead ends and fielded tons of calls from suspects, not prospects; however, we landed a good one. We got a lead on a house that was inherited, there were three heirs, it was vacant and they wanted to move on. Comps were in the 40-50k range and the house needed about 5-7k in repairs. We placed it under contract for $15,000 and quickly found a buyer at $28,500. Last week we closed on the deal and walked out of settlement with just over a $13,000 assignment fee. There were plenty of little issues along the way but determination persevered. We learned a TON by doing and it provided us with a better foundation to build on in the future.
So, if you are worried about taking action and going out there and doing it, don't be! You have to just learn as much as you can on here and then go DO. @Joshua Dorkin and @Brandon Turner have built a place where connecting with like-minded individuals is super easy. If you haven't got out there and done anything, take an investor out to lunch this week and talk...it might put a few bucks in your pocket.
Bill took down a nice owner financed deal off of our marketing last week, too. I will let him share that story though. Get out there and start doing, you won't regret it! Happy investing!
So motivating to hear these stories! Though the path is different for everyone, persistence and hardwork will get things started!
Your story is so congruent with how I picture my initial foray into REI going; hence it is reassuring to know that this is not phantasm.
Fantastic stuff here man, congratulations.
Sharing your success story helps remove some of the fear of those ofus who haven't started yet.
Can't wait to hear about the next one.
Thanks for sharing@Mike Webb . Your story was very motivating to me, and now that I have committed to doing some wholesale deals, your advice on just getting out there and making things happen hit right at home. Thanks
Congrats! I'm happy to hear that BiggerPockets was so helpful in you making this happen. On to the next one . . .
That's absolutely awesome.
I am on the hunt for my own 1st wholesale deal. Congratulations.
@Mike Webb mentioned
"There were plenty of little issues along the way but determination persevered. We learned a TON by doing and it provided us with a better foundation to build on in the future."
Can you share those details and how you overcame them?
Great job! Good luck moving forward!
@Wes Brumit I sure can.
First, this property was about 45-60 minutes from where my partner and I reside. This made vetting potential buyers a must in order to maximize our time and effort in going to show the property. While we did have a lock box on the property, we didn't feel comfortable just giving the code out without having a history with these folks. We had them do a drive-by of the property first, then sent them the file of pictures of the inside (about 30-40) to their email for initial review, had them ensure they understood what a "cash purchase" meant and then we would go meet to show the property.
Second, initially, we were not aware there were three heirs. As a result, our initial contract only had the executors signature and we had to convince and obtain the other two heirs' approval for the sale. We were able to do that by having the executor relay and explain the situation (we were investors and would be selling the house for a profit) to them. While not one of the heirs, one of their family members was, what was described to us, as a "pit bull lawyer" from a nearby County and he was going to review "our agreement". This ended up being a non-issue in the long run.
Third, our end buyer was using a family member to do a private money loan. We had to work with the lender and the title company to generate a promissory note that blanketed the subject property with another property the buyer owned free-and-clear. This was necessary as the lender was financing over 100% of the purchase price so that the buyer could do the necessary remodel work.
Lastly, there were some documentation errors on the promissory note at closing and they had to be rectified before the lender would "sign off" and we had a "done deal". We were able to correct these issues (primarily concerning the way the interest rate would be derived from the prime rate) at the closing table. In addition, the lender wanted to ensure the type of title insurance that he would be receiving and when he would receive sufficient documentation to clarify it...our closing Attorney was able to handle this well.
The lesson learned is: stay in control of your deal and keep an open-line of communication with the Buyer, Seller and your Closing company/Attorney. It isn't complicated but it isn't easy, either. Overall, once we were all done, we made over $300/hour on this deal and that was despite us being new and learning as we went. I'm sure the next deal will run even smoother.
Hope this helps you and go out there and get started.
Congratulations!! You will always remember the first one.. Make a copy of the proceeds check from title if you can. When things get tough, as they always will, look at that check and remember what it felt like. It will motivate you to be persistent and to keep going. Now you KNOW you can do it.. You know it works. Contrats again and best of success towards #2, #3, #100 etc.!!
Congratulations! I hope this is the first of many deals as you begin the your real estate wholesaling journey. You will face many different trials in the future but with each house you close on you will become better equipped to solve them. Remember a problem is just an opportunity for you to come up with a creative solution. Cheers!
@Mike Webb Truly inspiring story. I hope to complete a wholesale deal soon!
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