How I made $100,000 in 11 days with a phone and a pen!
I am new to the site, and I am trying to get involved as many discussions as my experience allows me. I saw the, "Success Story" heading, and a deal from 2009 or 2010 popped right into my head.
I had been involved in real estate for about 2-3 years at the time, and I was 23 or 24 years old. I had been working full time as a fire fighter for 3-4 years at that point, and grabbed every extra bit of side work in construction that I could at that time. I framed houses, did remodels, drove 10 wheel dump trucks, laid asphalt, you name it. If it was building related and paid, I did it on my days off so that I could squirrel money away for two things... real estate, and traveling.
At this point, I had been involved in some small to mid range real estate deals with some older guys who were looking to get into the game, one of them became wildly successful, and I still consider him a mentor to this day. We had moderate success rehabbing and flipping along with cleaning up and wholesaling. The pot was continuously split 4 ways, and we decided that wasn't fair if one or two guys were the rain makers finding the deals. So we amicably split but stayed in touch, utilizing one another as needed for deals, services, advice, etc.
I had posted advertisements everywhere I could think. I literally drove an hour to Cambridge, Ma and found books on marketing in Harvard's book store. Sounded like a great idea, but what a waste when you hear how this deal came along. The most simple things are what usually find me deals I learned.
Im on duty at the fire station one night, and my phone rings. Its a woman who told me that she wanted to sell her house. I asked her where she found my name, and she replied, "In your Yellow Pages ad". To this day, this is the one and only deal that I have ever gotten from the Yellow Pages. I start talking to her, and going through my questions thinking this is some schmuck who wants 200k for a 100k house. As I am going through the questions though, I'm realizing there may be a small deal here for me. She owes nothing on her house, is completely upside down financially due to years of mismanagement, and is chomping at the bit to sell.
I grab my laptop as she gives me the address, and look it up on the map. Im stunned when I look, so I ask again to make sure I have it right. I do. This woman owes nothing and is looking to get $130K for this house, but, because she answered my questions, I now know every single thing wrong with the house and have a pile of ammo to negotiate with.
Long story short, in a ten minute phone conversation, I get her to agree to $60K. Yes, 60K. She owns a 700 square foot cottage in the Town of East Providence, RI. Here is where it gets interesting. EVERY SINGLE OTHER HOUSE ON THE STREET WAS ASSESSED AT OVER $400K. This house sat on the waterfront in an area where all of the beach cottages were bought up by doctors and lawyers, and they built huge houses with large sets of stairs that went down to the water where your town provided boat mooring waited for you. Literally, a monster of a house sat on either side of her dilapidated and neglected cottage. Did I mention that her lot was also the largest on the street also? By far!
The second I got off duty in the morning, I changed my clothes and raced over there to sign her. In the time between the signing and the title being completed, I had to find housing for this woman who was completely unhygienic, smelled of wet dog, and never cleaned her house once. But, I found her an apartment that allowed her to take her Husky. I paid the landlord, first, last, and security on her behalf (which came out of her proceeds). I paid to get her son's car fixed because he had no job or money (no he wasn't 17, he was a grown man). That money came from... you guessed it... her proceeds.
So after jumping through hoops, we close a few days later. I see the potential, so I put up 3 smoke detectors, had someone clean it out and get it to a broom clean condition, and I had a tree company come and aesthetically trim the trees so that you could see the water. Underbrush was removed and the lawn was cut. Finally, it was time to call the real estate agent who knew to come right at sunset for the picture. The listing picture didn't even have the house in it. It was just the view from the backyard.
Not even a week later, at the closing table with a wholesale cash price of $160,000. So in reality, I made $92,000 all said and done, not $100k after everything.
The most important part of the story though. I look at that as a complete failure. Yes, it was a great confidence booster for a young kid to put that together and actually pull that off. Yes, it solidified some respect for those who told me I'd never make it in this business and that it was a pipe dream. I was too young, too this, too that. I believe that boundaries are made to be broken. My absolute favorite word is CAN'T because I love making the people who say it to me eat it. I don't mean that in an arrogant manner, but I know that if I work hard enough at anything, I won't let any obstacle stand in front of me. Why was this a failure? They aren't making any more water front property, and I didn't play the long game. I acted my age and took the immediate cash out.
I have failed a million times, and that is why I succeed. It took me 2 years to realize that deal was a failure, but when I did, thats when I got good at this. Every mistake I make and every can't I hear pushes me harder.
