Single-family residence wholesale investment.
Purchase price: $285,000
Sale price: $320,000
Property hit the MLS around 9:00am in the morning and happened to be just around the corner from my office. Toured it within 15-mins of it going live. Intended to fix and flip, so I arranged a meeting with the seller and his broker one hour later. I had an offer in hand that I gave a 1-hr expiration time frame. Seller agreed prior to us leaving the property. As I do with many of my potential fixers, I sent the listing to 5-6 investors including another investment group out of Seattle who had interest. We met the following day and were willing to take it on assignment, waiving all contingencies and close it within 13 days.
What made you interested in investing in this type of deal?
Large lot with shop, private location for being in the middle of the city, and plenty of upside for a BRRRR, fix & flip, or wholesale. I like deals with multiple exit strategies in place.
How did you find this deal and how did you negotiate it?
It was listed on the local MLS and I was able to meet with the seller and his broker directly within 2 hours of the property going live. Whenever possible, MEET IN PERSON with an OFFER IN HAND.
How did you finance this deal?
Utilized cash on hand for the EM, but wholesaled the deal prior to closing so additional funds not necessary.
How did you add value to the deal?
Marketed the property to investors looking for a project.
What was the outcome?
Wholesaled the deal for $25,000, and because I'm a licensed broker and the deal was assigned, I remained the broker of record for representing the assignee/buyer and collected the buy side commission.
Lessons learned? Challenges?
No challenges on this one, but a lessoned that was reinforced on this one is "meeting in person whenever possible is helpful for humanizing the process." Sellers are people and they have a variety of reasons for selling, so getting face to face to discuss these and work through the emotions is beneficial most of the time.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I'm a licensed broker, so I represented myself on the initial purchase followed by acting as the buyer's representing broker.
When timing, opportunity and preparedness all come together! Great deal and story Gabriel, thanks for sharing and much more success to you!
@Christopher Hill thank you Christopher, your comment was exactly right. Any investor could have done the same thing I did on that one if they were teed up and ready to go. I was fortunate to be located so close to the property, and my habit of scanning the MLS each morning and evening was key to seeing this one before others got to it. Preparedness is key!
Being prepared is so critical. And you already had systems in place to reach your investors. That's awesome.
Whoah, amazing work, @Gabriel Graumann . I am 100% with you that meeting in person in these situations is absolutely everything.
@Gabriel Graumann nice work on this one! How do you pitch meeting in person to the Listing Agent? With the market as hot as it is I'd imagine you hit some resistance, more from the LA than the Seller, to meeting in person at the property.
Appreciate any experience you can share. Cheers!
@Michael Haas Great question, as not all are receptive to meeting in person. In this case the listing broker let it slip that the seller would be onsite to meet him "in an hour" so I simply asked if it was okay to meet in person with our offer instead of emailing it. They both agreed and the rest is in the story. Many of the deals I get like this are off-market, so that is easy as I'm knocking on the door or calling them directly. My perspective is this: most brokers are lazy (70-80% at least) and they "assume" the seller doesn't want to talk to anyone except them since they hired a broker. I believe this is a fallacy we brokers like to tell ourselves to make ourselves feel more important than we often are.
Our true value comes from making great deals happen that benefit our clients, so why not ask our client what THEY would like to do instead of assume it. I often phrase it in this way to other brokers, especially when I'm the buyer:
"Mr. Broker, thanks for talking through the details of the property with me. As the buyer myself, I can be incredibly creative in the way I structure a deal to make sure it takes into consideration all of the sellers objectives and still works for me in terms of how the offer is written. Now, I can send a written offer and then we go back and forth a lot until we ultimately arrive at something, but that costs us and them time and often money. Wouldn't it make sense if we simply met for 15 minutes and talked as a group so they truly understood how to many options I can provide them? You're going to be there, so you're not at risk of losing your client or getting cut out of the deal, and I'll leave when were finished so you can talk privately with your client."
Position it in a way that it shows you're not trying to get around the listing broker but actually setting him up to look good for finding such a great potential buyer. Just a thought. I'll be posting another deal I'm wrapping up from the Boise market soon where I employed this method and it worked out amazingly.
Great writeup @Gabriel Graumann - thanks for sharing the process and conversation points! We do a bit of off-market as well with a similar approach, but hadn't ever thought of using this same approach when working with listing agents & on market sellers. Great move!
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