Door knock turned into 11,250% profit

[Andrew G Montoya]

I’m Andrew, a realtor turned investor, and I want to share my experience with a specific deal that worked out well. One day, while door knocking in Lake Hiawatha, New Jersey, I found a house where the owner, who was located in Buffalo, New York, was struggling with unpaid taxes and property upkeep. After some back and forth, we agreed on a purchase price of $500,000, with the owner willing to hold the note for me for three years, at 5% interest, with an interest-only payment structure and a balloon payment at the end of the term. The down payment was $27,500. (Borrowed from family)

I partnered with an investor who agreed to fund the renovations and holding costs. Initially, we had a 60/40 profit split, but due to delays with a court judgment and the fact that there were $29,000 in back taxes, we adjusted the split to 42/58. The total renovation cost came to $200,000. I paid solely for smoke cert and smoke detectors and fire extinguisher etc on purchase and sale. ($1,200)

Once the work was completed, I listed the property while renovations were being completed for $950,000. We received an offer within 3 weeks at asking price, which was great. After paying off the $500,000 purchase price, the back taxes, and the renovation costs, I was left with $135,000 in profit after the split. This happened over a 12 month period. It wasn’t an easy deal, but the numbers worked out, and the experience taught me a lot about patience and how relationships and renovation costs can effect a deal.

I had a lot of help doing this and leading me to this deal. Just want to give back.