I did what Josh Dorkin warns not to do

23 Replies

So I bought this house in Montgomery Alabama sight unseen on eBay for less than 4k$ it seemed like a good deal not in too bad of shape a previous duplex a few miles from Alabama state. I've worked construction my entire life and done 1 live in flip and one extremely extensive remodel where all we saved in the house was the floor and the exterior walls . So knowing I could easily drive from California where I live to Alabama to fix up this duplex and sell it or rent it seemed to be a no brainer. After I purchased the property it took me about 7 months before I had the time to fly out and see what this place really looks like long story short on the drive there we passed 4 bail bond places going deeper into hood. I wouldn't say I was afraid to be on that street in the daylight mostly because 90% of the houses were completely ABANDONED! By the time I pulled in front of my house I knew no one would ever want to live here. The house wasn't in much worse shape than I thought I could have easily fixed it up but I have since decided to cut my losses and sell it on eBay never buying sight unseen again! I mean unless it looks like a really good deal lol

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@Dustin Mathenia ,

Google maps is your friend!    ... you can tell a lot based on recent sales,  and how much houses are renting and selling for! 

One suggestion.. put lipstick on a pig! Go to the house,  with a sprayer,  and paint the interior and try and sell it for $$$!   If I would have known, what I know now... I  got the house for $5K, sold it for $9.5K... If I would have gone in and painted, maybe put in some cheap appliances, I easily could have sold it for $15K-$20K! 

Absolutely turn this situation into profits!   

Put a process in place so you can make good virtual investments. To avoid the cost of travel and time hire an inspector to do a full inspection before payment. 350$ loss is better than 4000$
Wish you much success in future ventures!

But hey, it makes a great story!

Sorry to hear that it turned out that way.  If you have a process, this can work, but for the average person -- especially new investors -- I believe this is a bad idea.

@Dustin Mathenia Sorry that happened to you. I admire your dedication to the deal though. That's impressive!

@Joshua Dorkin 

In my defense I bought this house before I discovered BP and I should be able to break even if the bid I have on eBay goes through.. I have not let this one bad deal detour me from investing in real estate just another lesson learned and on to the next deal .

@dennis l Lewis jr 

Auction ends Wednesday but I really hope so 

@Dustin Mathenia  Ok. So now you got me really intrigued. How did your Ebay auction go for the property? Did you break even? I'm just very curious. Also, I had no idea that you could sell a home through Ebay... 

@Dylan Barry 

Well it did sell but the guy who bought never paid or contacted me so I just kept it waiting for tax return season before relisting it I'll keep you posted if and when it sells 

@Dustin Mathenia

Sorry that happened, thank you for posting, I took some notes I know I probably would of made the same choice. 

@Carmelo Jimenez 

I will sell you the house if you want it haha ..you're welcome this site is for learning from other people mistakes 

Clayton Morris claims he doesn't even see any of his properties when he purchases anymore. Like everyone is saying, it's great if you have the right system in place but otherwise I think you should be physically involved. I'm a hands-on type of person in any aspect. I would want to go through any neighborhood and property before purchasing. At least until I was advanced enough to have a detailed system. 

Back in the early days I had done this several times sight unseen but trusting my guys on the ground.  Most of them I wouldn't even let my wife even see until we had it occupied.

All eventually became cash cows but my very 'patient' wife sent me this & it's framed in my office .....

Is the house still available?

@ Tarik Abdullah

Yes it is you want it?  Pm me and I'll send you the address 

@Dustin Mathenia - I requested the information

Don’t give up yet listen You could make out on this by doing a seller financing . Even a dump that needs everything is worth doing instead of renting . No one can get a loan in this area but everybody hates renting . Even hood rats love the idea of owning their own house even if it’s a dump ! Get a real estate mortgager to draft up a deal to sell this . It is a little involved but you can get out smelling like a rose . Sell it with 1000 down and 300 a month payments for 10 years . There’s a guy who specializes in this strategy . His book is “ man of 1000 houses “

@Dennis M. I like that are you saying to do that the way it sits right now ? It is far from livable ...but I really like the idea and always appreciate a good book recommendation thank you for your comment 

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Originally posted by @Dennis M.:

Don’t give up yet listen You could make out on this by doing a seller financing . Even a dump that needs everything is worth doing instead of renting . No one can get a loan in this area but everybody hates renting . Even hood rats love the idea of owning their own house even if it’s a dump ! Get a real estate mortgager to draft up a deal to sell this . It is a little involved but you can get out smelling like a rose . Sell it with 1000 down and 300 a month payments for 10 years . There’s a guy who specializes in this strategy . His book is “ man of 1000 houses “

 @DennisM.

Great suggestion!  I like your idea about seller financing this house. There are some gray areas about this process, though. 

How do you insure that the buyer pays you over the next 10 years?  What do you use to vet people’s ability to pay, especially in the hood, like this house is in?  

What forms do you file? And where do you file them?  If they don’t pay, do you have to go through a costly process to get the house back in your possession?

Thank you! 

@Cheryl Vargas I have never done it but I stayed at a holiday inn last night . Basically you setva low down payment entry(2-4k) .you need a licensed mortgager loan offIcer .must qualify an applicant . They must have to meet certain criteria on debt and income and a letter from previous landlord and employer that they have a job and pay their bills . You get them under contract you strategIcally set the payments so that it isn’t burdensome after the taxes insurance and bills are paid . Usually 3-500$ a month . It must be Slightly less than prevailing rent in the area . You extend it over a decade with amortized interest of 6-7%. They pay you directly . Clauses are in the contract that if they don’t pay you or the taxes insurance etc .. then you foreclose and take the property back and keep all the money that was paid in to that point . Then simply do it again with a new person . Dodd frank and safe act has made it a bit complicated to qualify and set it up but an expert could easily do this if you run it correctly and fairly .

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