Real Estate Deal Analysis & Advice

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Peter Hanson
  • Flipper/Rehabber
  • Orange, CA
63
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67
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21 months in, 15+ deals either done or in the pipe

Peter Hanson
  • Flipper/Rehabber
  • Orange, CA
Posted Jan 31 2014, 00:45

All deals done in Southern California....over the past 21 months

Deal #1 got offer accepted at $100K for a duplex, wholesaled it for $107,000 to a cash buyer, netted $3500 +/-

Deal #2 got offer accepted at $105K for 3/2 SFR, wholesaled it for $112K to same cash buyer, netted $3500 +/-

(decided I wanted to be able to buy the next house cash, locked myself in my office, worked my butt off 7 days a week 10-14 hours a day, saved every penny for 9 months, now I was ready!)

Deal#3: paid 85K cash for 2/1 SFR, spent $15K on rehab, sold for $140K

#4: paid $86K cash for 2/1 SFR, spent 15K on rehab, sold for $156K

#5 paid $104K used hard money for 2/2 SFR, spent 14K on rehab, sold for $170K (put 20% down, plus rehab, and holding cost, total investment was $40K, netted $30K in 90 days, show me another way to make 75% return in 3 months with little to no risk!!!) - It's funny, now that I have the money to pay cash I have made contacts and met other investors, turns out there's so much cash laying around looking for deals to invest in, I no longer have to use all my cash to buy

#6 paid 85K used hard money for 3/1 SFR, spent ZERO on rehab, sold for $127K (buyer paid $110,000 cash, and agreed to a $17,000 1 year balloon note at 9%, which will pay off next month, created $125/month income for 12 months, and a nice pop is coming!)

deals 7 and 8 had a partner - he found the home, I fixed it up, managed the rehab, he sold it, we split the net profit...these were ok deals we split $20,000 on each deal but they took 5 months and 9 months respectively due to issues with contractors doing shoddy work....so if you figure our profit at an hourly rate these were not barn burners...but hey it's $20,000 I didn't have before, so I am fine with that

#8 paid $265K used hard money, spent ZERO on rehab, wholesaled it in 12 days for $360,000, that was a nice one (sad back story on this one, owner of the property was busted for selling drugs and arrested, then deported to Mexico, so wife took over the drug selling biz...then she got popped, in order for me to be able to close on the home, Escrow had to go to the jail to have the wife sign, then hire a mobile notary to drive down to the SD/Mexico border to have the husband sign) death, divorce, drugs, disease....the 4 D's that create real estate opportunities, sad but true

#9 paid $205K used hard money, spent $25K on rehab, sold for $300,000

#10 paid $90K for 3/2 SFR, used hard money, spent $3500 on rehab, rented out for $800/month, slight negative cashflow currently (-$150/month), market value is $130K now, plan on refinancing into better loan in 3 months, will cashflow $300/month after the refi

#11 paid $108K for 3/1 SFR used hard money, spent $3000 on rehab, rented out for $850/month, slight negative cashflow currently (-$190/month, market value is $140,000 now, plan on refi into better loan in 3 months, will cashflow $150-$200 after the refi

#12 paid $125,000 for 4/2 SFR used hard money, spent $0 on rehab, house already had a tenant in it paying $900/month, will be raising rent to $1150/month, market value is $160,000, plan on refi into better loan in 3 months, will cashflow approx. $500/month after the refi

#13 invested $50,000 with my parents to buy a triplex, for $530,000, property cashflows $1000/month from day one, and value has increased to $650,000

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in current pipeline/in escrow - thru these deals I've made good friends and I've made my hard money lender some good money, hard money lender let me know he has $5,000,000 +/- sitting in the bank looking for houses to invest in, and he's given me the green light. So if I think it's a deal, he is on board

deal #14 $75K purchase for 3/2 SFR, needs $7500 in repairs, will sell for $130,000, will use hard money, fix and flip, or might keep as a rental, will rent for $900/month

deal #15 $105,000 purchase for 4/2 SFR, needs 13K in repairs, will sell for $150,000, will use hard money, fix and flip, or might keep as rental, will rent for $1100/month

deal #16 $140,000 purchase for duplex each side is 2 bed/2 bath, monthly rent $1800, will use hard money to buy then refi after 6 months seasoning, should cashflow $800/month +/-

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Real estate has allowed me to create over $500,000 in cash and equity in less than 2 years, I'm still pretty shocked by that, but very happy as well

I've never done direct mail, these were all done by networking with agents and writing 300 + cash offers to purchase on properties listed on the MLS. If somebody knows anything about direct mail I'd love to learn that part of the business. Direct mail gets you to the seller directly, no agents involved, I know working directly with sellers is the way to get great deals.

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BP is a great source if information, and the contributors are so positive, I love it here and check back often. Thank you for what you do.

Please let me know your thoughts. Am I doing the right thing moving away from flipping into buying and holding? should I still flip some/keep some or should I try to keep everything that makes sense as a rental? I don't want to have success just to have it blow up in my face just as quick...I want to keep loan to values as low as possible with the goal of paying off the properties in 5-10 years, and have cashflow for life

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