I made $185,00.00 this week on two sales!
While this statement is technically true, there is much more to the story than the headline.
First, both sales represent a bit of a let down as I actually thought my net from these two deals would be closer to $250K. Second, each of the sales represents weeks or months of work and lots of patience. I don't actually make 185K each week.
The first property sold on Monday. It was a large home in Alpine, Utah that I purchased from a wholesaler in May of this year for $420K including the $10K wholesale fee. Renovations took 2 full months and about 8 different sub-contractors including landscapers, painters, an electrician, wood floor re-finishers, granite installers, cabinet makers and carpet installers. I am a hands-on rehabber and while I am supervising the subs I swing a hammer too. The home fell out of escrow once and took almost 7 full months to sell from purchase to close. My net was $44K. Not bad but not great. It was especially frustrating when the first buyers could not get financing and we went back on the market in early September. The hard-money loan on $360K was costing me about $120.oo per day! Ouch! The final purchase price was 565K. It was really a nice home and my wife and I discussed moving into the home ourselves. In the end I'm quite relieved it sold.
The second property sold on Tuesday and it was a large, view lot in the Salt Lake area. I bought it from a bank 4 years ago. The asking price was 99K but I eventually got the bank to accept $38,500. Of course, 4 years ago it was easy to find great deals on vacant land almost anywhere in the western states. Builders were just not building and banks had entire subdivisions on their books. I did not do any physical improvements to the property but I did spend many hours with engineers and city planners defining exactly what could be built on the lot and with what modifications (like soil retention, drainage, engineering requirements, etc.) I had the property on the market at $269K for many months and thought about building a spec home but a cash offer finally came in and we settled on 190K. I decided that a 400% increase was acceptable. No need to be greedy.The true net after 4 years of taxes, surveying reports, HOA fees, title fees and agent commissions was 141K. Overall, it was a very good week and I feel blessed. I'm just finishing up another rehab project and I hope to have a mellow winter including a tropical vacation, some family time and some good snowboarding!
The first pic is the big home and the second pic is the view while standing on the lot.