Hey Bigger Pockets!
Once again, I would love to post a lot more often, time just keeps getting the best of me though and there are so many deals to do in this market!
As normal, I like to post the unique deals that I think you can learn the most from. This house in particular is in Portland Oregon, and I live about 3 hours away near Seattle Washington. One of the things I constantly seek to improve upon, is spending less and less time physically at any of my houses. I believe I can help people a lot in this arena.
The DealThe biggest key to my success in real estate has ALWAYS been finding and building a great team and networking with the best at all times. When ever I have gone into any new market, I always spend the time head hunting the best, and I constantly do it in my main market of Seattle (like tonight there is a BP meetup I need to hurry and get to...).
This house was brought to me by a fantastic realtor in Portland, OR. Can you believe this was on the MLS?? The deal was tied up by a developer who planned on fixing this house but also sub dividing the back half of this large lot and building a few units back there. Apparently after their feasibility period, the builder dropped out and left the sellers desperate for a new buyer. My agent jumped on it and I put a lower then list price offer in right away the day it fell out, 3 day inspection, close in two weeks. This got the sellers on board.
Granted, I did NOT want this house, I did not think it was a deal at first. One of the problems with being outside of the market (me seattle, this Portland), is not always knowing up and coming areas. But I trusted my team, that's what they are there for.
I went to the house the 1st time after we had in contract during the 3 day inspection, I still didn't like it, I then told my realtor to counter at inspection with a lower price (I thought they wouldn't take it, and then get me off the hook without upsetting my team)...and the sellers took my new price which was 10k less then my original...now I was STUCK with the thing and had to make it work.
How to do this from afar?
While walking during inspection, I took about 100 photos from all angles, why? Because I don't want to come back to the house. I need to have all angles of the house so I can work with my contractors via pics from afar and not wonder or remember anything.
I then, over the phone with my realtor, went through the whole house with pics and agreed to the rehab plan (most of which we did in person during inspection). I then sent my local GC there (the one I trust and found). He then confirmed my rehab numbers, we set the contract and he started working the day after close of the property.
2nd time I went to the house was when I was in town looking at other houses to buy.
In between this time, I have local friendly agents and other investors I've networked with that would drop by and take 50-75 pics of the house for me during the weeks, and drop box the pics to me so I can see progress.
3rd time I came by was to drop off some material we can only get for cost in Seattle.
4th time, the house was done and already listed, I only went by because I was in town.
The key is local people, boots on the ground, and then have more local people to watch those people. For instance, have more than one person a week go by and take pics for you, drop box them. Have more than one realtor (I usually find 5 in a market and work with all of them until the cream rises). Have IRON clad specific contracts with all your contractors with specific scopes of work, and have them be part of the team so they feel good about taking care of you when you are not there. Don't get cheap on them when afar, be fair, always, you don't want them resenting you when you are a couple hundred miles away. I can write pages about how to do this better, one day I will.
Purchase with closing costs: $178,061
2 points to lender (Private Money total borrowed $225,000): $4500
3 months holding cost and 10% interest (utilities/taxes/interest): $1850
Rehab Costs: $46,391
Selling Costs (5% commission, escrow, etc): $17,394
Sales Price: $289,900
NET PROFIT: $36,470
The moral of the story, is build your teams with the best people you can find at the level you are at. CONSTANTLY look for great people to surround your self with. If you are looking around and you cant find great people, maybe you are not looking hard enough...maybe you need to become a great person your self? Always do what is right and fair with everyone you interact with. This real estate world IS VERY VERY VERY small, believe me. Your reputation is all you have and you want to be the one people want to work with, bring their deals to, refer you to money lenders, etc.
Good luck to all of you, message me any time!