$10k on First Wholesale Deal

54 Replies

So we wholesaled our first deal and made $10k, just closed Thursday! I put it under contract and had it assigned in just a few days and it closed 30 days after I got it under contract. I got a call from a mailer we sent out months ago from a nice gentleman that lives out of state. Within a few hours I'd gained access to the house and had a verbal agreement from him to sell at $35k. Huge house (5/2 2400 sq ft) in a rapidly changing area but the house is in really, really rough shape. Holes in the roof and floors, no back door whatsoever, small tree growing out of the brick in the rear on the 3rd floor, etc. Neighbors had gained access through the backyard and were feeding cats out of the house plus storing their stuff in there. From talking to the owner on the phone the place should've been empty. There were boxes of stuff, new-ish appliances, and lots of cat carriers and cat food and bowls. I have to give a shout out to @Mark Redmann because, without his tools and persistence, we never would've gotten into this place. The 6' high stockade fence had dozens of 3" deck screws poking out like barbed wire (both directions, facing in and out, you're not hopping this fence) and holding the boards in place. The back alley was so overgrown we could barely get through and the only spot we could even get to the fence was heavily fortified, again by the neighbors, with copious amounts of deck screws. Nevertheless, Mark busted out his cordless drill, sawzall, and hammer and got us in! 

The backstory is, the owner bought the house 4 years ago to fix up but, due to financial issues, hasn't touched it in that time. The house has deteriorated severely in those 4 years. I emailed him the contract and he signed and returned same day. I then called a realtor we work with quite a bit and gave him the particulars on the property. I think I put it up here on the marketplace and posted on Craigslist as well. I wasn't taking any chances! My realtor was able to put me in touch with a local investor he works with that buys in the area and, after a brief phone call, sight unseen, says "I'll take it". As my partner @David Ross said, it's like he's buying melons at the market. I priced the property right at $45k and he knows the area but I still wasn't comfortable with him purchasing sight unseen. I gave him the lockbox code and told him I wouldn't sell the property to anyone else until I heard from him, but I wanted him to go through it. The place is rough, check out a few choice pictures below! 

He text me the next morning and said, you guessed it..."I'll take it". My realtor set me up with a title company that he uses for assignments of contract and they were awesome. Everything was done via email and docusign and I never left my house for this deal other than to check out the property and put a lockbox on. I didn't even go to closing and the check showed up two days later in my mailbox. 

Can it really be this easy? Yep, except it took almost two years of marketing (off and on and likely poorly done) and a few connections to get to this point so it's not what I would call "easy". For those of you who are just getting started, stick with it! It takes time to learn, make connections and apparently for your marketing to work. This particular mailing went out at least a year ago and it's the only one (from me) this gentleman would've received...because when I got no results I changed my list. Great business plan, huh! 

We've been marketing off and on for roughly two years with no success, probably due to the fact that I never hit the same list twice and never really took wholesaling and direct mail seriously! To date we've spent roughly $4k on mailers and this is our only deal. We are in the middle of a serious campaign now, 5 touches, one every 3 weeks, to the same list. I'll let you all know how it goes! Oh, and we gave the realtor a check for $1k for connecting us with the buyer and the title company that made this process super easy. 

 

Nice job! And it just gets easer from here. One of my favorite lines I heard recently was "You'll can make a fortune in 5 years in real estate. It just wont be the first 5 years."

Originally posted by @Stephen McKee :

Nice job! And it just gets easer from here. One of my favorite lines I heard recently was "You'll can make a fortune in 5 years in real estate. It just wont be the first 5 years."

Thanks Stephen, that's a great quote and very, very true. I'll be using that one!

Wow what a project! @Troy S.  What do you think this property could be worth? I wish I could work with the investor on this one to see how it changes over time. Congrats!

@Troy S.

Congrats!

Great story. Your hard work paid off and it seems your experience now and connections you've made should help you to make the next deals easier. 

I've heard quite a bit about neighborhoods in Philly gentrifying recently. 

I read about the crazy price appreciations in Fishtown. Looks like properties there went up many many times in a relatively short period of time. It seems to make sense as people nowadays want to live in urban/walkable areas and many downtown areas are being revitalized. 

@Troy S.

Thanks for sharing your success story. Thats the truth about marketing, sometimes you may have thought you hit a dead end on a list due to not getting the right calls that transform into deals, but if you stay consistent, then you really can capture a deal from a marketing campaign that you have long forgotten about. I agree with the advice that is given very often when speaking about marketing, you must follow up with people, because they may not want to sell to you today, but who's to say they may not want to sell to you a year from now. Great job, and look forward to hearing future success stories from you. BTW, what was the ARV on that property? Looks like it needed a ton of work.....

Congratulations,Troy! 

Way to hang in there for those two years. A lot of people would have given up. This story is encouraging!

Great job!  Did it really need a lockbox? :)

Great story! Where is the property located?

Nice job @Troy S.  . And just when you thought "Man these things aren't working..." BAM!

@Troy S. nice job! Risk rewarded.

I notice OP did not use the word 'checkmate', and that the wholesale shaders are not posting. Coincidence?

PERSISTENCE! Well Done!

Way to stay with it...now on to the next one!

Stay Hungry.....

Originally posted by @Bill Hinshaw :

Wow what a project! @Troy S. What do you think this property could be worth? I wish I could work with the investor on this one to see how it changes over time. Congrats!

Bill, ARV in this particular area is a tough thing to wrap your head around. This is a buy/hold area for sure but there area a few successful flips as well. Below is a link to a flip a block away that went for $280k. The investor we assigned to is likely going to convert this property into 3 units generating $2200/month or so in total. He'll be all in for well under $200k, closer to $150k if I had to hazard a guess. The zoning allows a triplex by right so it's nothing more than building permits to make it a triplex. He's also a contractor and has his own crew. He can blow this out much cheaper than most investors.

Link to a sold a block away

The other caveat to this is, we were prepared to purchase the property if we couldn't assign it. I only gave us 30 days to close as we fully intended to purchase if nobody else wanted it. It's not really in our bread and butter area right now and it's a damn big project to have to hire out, but I'm not a fan of wholesaling if you don't intend to purchase. I just don't think it's right to string someone along and then dump them unless you were really, really clear about what you were doing up front. 

Originally posted by @Ashley Jackson :

@Troy S., congrats!!!

 Thanks Ashley, long time coming to get our first one done! 

Originally posted by @Joseph M. :

@Troy S.

Congrats!

Great story. Your hard work paid off and it seems your experience now and connections you've made should help you to make the next deals easier. 

I've heard quite a bit about neighborhoods in Philly gentrifying recently. 

I read about the crazy price appreciations in Fishtown. Looks like properties there went up many many times in a relatively short period of time. It seems to make sense as people nowadays want to live in urban/walkable areas and many downtown areas are being revitalized. 

Thanks Joseph! This neighborhood, Sharswood, which borders the more popular neighborhood we focus on (Brewerytown), has some interesting stuff in the works over the next 10 years. It's certainly worth keeping an eye on.

Fishtowns growth and it's neighbor, Northern Liberties, aren't something we're likely to see again any time soon. It was the right place, right time with the economy and the housing market. We're seeing lots of development and appreciation around here (and of course still in Fishtown) but not on the same scale as pre-'07, which is a good thing I think. 

Originally posted by @Larmon Cummings Jr:

@Troy S.

Thanks for sharing your success story. Thats the truth about marketing, sometimes you may have thought you hit a dead end on a list due to not getting the right calls that transform into deals, but if you stay consistent, then you really can capture a deal from a marketing campaign that you have long forgotten about. I agree with the advice that is given very often when speaking about marketing, you must follow up with people, because they may not want to sell to you today, but who's to say they may not want to sell to you a year from now. Great job, and look forward to hearing future success stories from you. BTW, what was the ARV on that property? Looks like it needed a ton of work.....

 This is a great point, I never would've dreamt that a mailer sent out a year ago could still be working hard for us and follow up is where the real money is made! 

This property needed more work than most, it was rough! The sold flip I linked to above went for $280k. I don't think the investor that bought this is going to flip it, he's likely to make it a triplex, which is really tough to value in that area. I'd say it'll be worth, as a nicely done triplex, $240k or so? It's pretty subjective in these parts though! 

Originally posted by @Jay Johnson :

Congratulations,Troy! 

Way to hang in there for those two years. A lot of people would have given up. This story is encouraging!

 Thanks Jay, I'm not smart enough to quit sometimes...

Originally posted by @Geoffrey Hoffman :

Great job!  Did it really need a lockbox? :)

What's the old saying about locks only keeping honest people out? :) 

Originally posted by @Griffin Fehrs :

Congrats @Troy S. ! It pays off to keep pushing forward. 

Thanks Griffin, perseverance is one of the biggest indicators of success I've seen so I definitely remind myself often to keep pushing. It's easier when you're passionate about something though and I'm definitely passionate about REI.

Originally posted by @Roberto Lobrace :

Great story! Where is the property located?

 Thanks Roberto, it's at 22nd and Thompson, in Sharswood. 

Originally posted by @Marshall Downs :

PERSISTENCE! Well Done!

 Thanks Marshall, it certainly helps! 

@Troy S. YESSSSSS!!!! CONGRATULATIONS! This is an awesome story! It gives us newbies hope for success in the future! Thank you for sharing! Can't wait to hear more from you and about your subsequent successes. On the up!

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