21 months in, 15+ deals either done or in the pipe
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
@ you are right, I am dealing with that right now, flipping is great quick money but it's not wealth creating/long term which is what I am trying to do. All these deals are a side business to grow my nest egg. I realized after all those flips that I would have made 5-7 times more money just buying them renting them out and holding onto them. HMLs for 1 year at 12% were just my way in the door with sellers. I offered them cash and a 12 day close as is so they would accept my offer, after inspections, etc I would ask them if I could change to hard money, they said no problem, so I did. Qualifying to refi 3 rentals as a self employed person is proving to be challenging...worst case I evict the tenants and sell them, but I don't want to do that.
Great post ! Truly inspiring. Plan on getting license soon. Any other advice for a newbie from a recent newbie ?
@ find a mentor, talk to seasoned and successful investors. You will be surprised how open they are and willing to teach/coach you. Read books on flipping and property management and become as educated as you can. But don't just read 50 books and never leave your office. Read 1-2 books, then start making phone calls to owners, start knocking on doors of distressed homes. Learn what all the contracts mean, read and really know the main contracts you will use most often on each deal
An agent friend of mine door knocks 4-5 hours a week in his farm and gets out there and talks to people. He sold 55 homes last year and did 15 flips his average commission on a sale is $5500 and his average profit on a flip is $35,000. Not bad for a 30 year old guy
Also, follow this plan and you will be a millionaire before 10 years. Sell homes, every 5th home you sell, buy a rental for yourself, fix the rental, rent it out, and pay extra on the mortgage each month. if you sell 20 homes per year, that means you will be buying 4 homes a year, in 5 years you will have 20 homes, if those 20 homes appreciate by $50,000 each, BAM you are a millionaire. It's possible, get out there and do it
Very exciting and great conversation here. Congrats on the successful start and thank you for sharing.
Best. Most specific. Most replicable advice I have read in..... maybe forever.
Kudos. And thanks much for sharing.
@Peter Hanson that's an awesome track record. Well done!
RE: direct mail- I'm a big proponent of it. I get most of my deals off listed properties the same way you do- lots of low cash offers. I've started focusing more and more on direct mail though over last 2 years. Did 8 deals from direct mail last year and 3 so far this year with 2 more supposed to close this month.
I mainly do a version of the 'yellow letter'. No real trick I've found with it beyond having enough volume where you'll get something from it. I did 4,000 letters/mo last year and this year bumped to 6,000 letters/mo.
Originally posted by @Jonathan C.:
@Peter Hanson that's an awesome track record. Well done!
RE: direct mail- I'm a big proponent of it. I get most of my deals off listed properties the same way you do- lots of low cash offers. I've started focusing more and more on direct mail though over last 2 years. Did 8 deals from direct mail last year and 3 so far this year with 2 more supposed to close this month.
I mainly do a version of the 'yellow letter'. No real trick I've found with it beyond having enough volume where you'll get something from it. I did 4,000 letters/mo last year and this year bumped to 6,000 letters/mo.
John,
Who are you send the letters to? Absentee out of state?
@Peter Hanson Great Advice !! And thanks a million ! Truly impressed with your simple and direct approach to success.
Over 60 year old owners (owner occ and absentee) that have at least 40% equity in their properties. Ended up being like 28,000 names across the DC Metro area.
@Jonathan C. How do you find out how much equity someone has in their house ? Ask them after response to your letter ?
@Kevin Pfeiffer you can use a list broker to get that information. I use 'list source'. They have equity % options, total assessed value, homeowner age, and tons of other factors you can sort your lists by.
7.3.18 Progress/Deal Updates
Deal#1 8432 Frankfort Ave, Fontana: paid 85K cash for 2/1 SFR, spent $15K on rehab, sold for $135K with 10 offers
Deal #2 1396 N. Althea Ave, Rialto: paid $86K cash for 2/1 SFR, spent 15K on rehab, sold for $156K with 37 offers
Deal #3 1886 Northwestern Place, Colton: paid $104K used hard money for 2/2 SFR, spent 14K on rehab, sold for $170K (5 offers to purchase, picked highest and best offer)
Deal #4 11705 Ivy Ave, Moreno Valley, CA: 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%)
Deal # 5 and 6 - 38716 Tandika and 87 Conejo, Palm Desert: Tandika, purchase $168K, spent
$50K on rehab, sold for $272,000 - Conejo, purchase for $175K, spent $35K on rehab, sold for $247,000
Deal #7 - 305 N. Batavia St, Orange, CA: paid $265K used hard money, spent ZERO on rehab, sold as fixer on MLS in 12 days for $360,000
Deal #8 - 985 W. 57th St, San Bernardino, CA: paid $205K used hard money, spent $25K on rehab, sold for $300,000
Deal #9 - 10310 Orchard Ave, Adelanto, CA: $105,000 purchase for 4/2 SFR, spent 12,500 in repairs, sold for $160,000
Deal #10 – 9830 Alexander Ave, South Gate, CA: $275,000 purchase for 5/3, spent $35,000 on rehab, sold for $400,000
Deal #11 - 64380 Thumb Dr, North Palm Springs, CA - $75,000 purchase for 3/2, spent $5,000 on rehab sold for $97,500.
Deal #12 – 700 E. Washington St #52, Colton, CA: $77,000 purchase, spent $7500 on rehab, sold for $132,500
Deal #13 – 11513 Grape Street, Los Angeles, CA: duplex $200,000 purchase, spent $35,000 on rehab, sold for $350,000
Deal #14 – 4167 N. F Street, San Bernardino, CA: SFR $150,000 purchase, spent $17,000 on rehab, sold for $210,000
Deal #15 – 2612 E. 132nd ST, Compton, CA: SFR $200,000 purchase, spent $53,000 on rehab, sold in 7 days for $360,000.
Deal #16 – 11999 Pecos Rd, Apple Valley, CA: SFR $120,000 purchase, spent $30,000 on rehab, sold in 10 days for $215,000
Deal #17 – 3776 Middlebury St, Los Angeles, CA: SFR $440,000 purchase, spent $60,000 on rehab, sold for $635,000
Deal #18 – 11709 Compton Ave, Los Angeles, CA: SFR $206,000 purchase, spent $14,000 on rehab sold for $255,000
Deal #19 – 1159 E. 28th St, San Bernardino, CA: SFR $227,000 purchase, spent $15,000 on rehab rented out for $1700/month in 1 day (current market value is $300,000)
Deal #20 – 1306 Fairview Ave, Colton, CA: SFR plus vacant lot next door, $160,000 purchase, sold lot for $23,000, spent $30,000 on rehab sold house for $245,000.
Deal #21 – 692 E. Johnston Ave, Hemet, CA: SFR $125,000 purchase spent $10,000 on rehab, sold for $175,000
Deal #22 – 45788 Bentley Ave, Hemet, CA: SFR $130,000 purchase spent $6,000 on rehab rented for $1450/month (market value is currently $260,000)
Deal #23 – 671 N. Allen St, Banning, CA: SFR $107,500 purchase, spent $6500 on rehab, rented for $1,100/month (market value is currently $210,000)
Deal #24 – 967 E. Hoffer St, Banning, CA: SFR $90,000 purchase, spent $7,000 on rehab, rented for $1,250/month (market value is currently $195,000)
Deal #25 – 7829 Airport Blvd, Los Angeles, CA: SFR $685,000 purchase, spent $50,000 on rehab, sold for $859,000
Deal #26 - 2415 N. Glenwood Ave, Rialto, CA: SFR $265,000 purchase, spent $30,000 on rehab, sold for $365,000
Deal #27 – 101 E. 69th Way, Long Beach, CA: SFR $360,000 purchase, spent $48,000 on rehab, sold for $499,000 all cash 21 day escrow
Deal #28 – 264 Stephen St, Colton, CA: SFR $128,000 purchase, spent $12,000 on rehab, rented for $1150/month
Deal #29 – 57330 Old Haggard Rd, Yucca Valley, CA: SFR $82,000 purchase, will spend $40,000 on rehab, will be listing it for $249,900
Deal #30 – 3753 Ruthelen St, Los Angeles, CA: SFR $510,000 purchase, spent $75,000 on rehab, sold for $759,000 in 17 hours, buyer closed escrow in 3 1/2 weeks with 20% down
Deal #31 - 7391 Sherman Hoyt Avenue, 29 Palms, CA: SFR $63,500 purchase, will spend $35,000 on rehab, will be listing for $189,000
Deal #32 - 869 W. Cerritos Ave, Rialto, CA: SFR $278,000 purchase, will spend $30,000 on rehab, will list for $399,000
There are more, this is just what I put together for you. You can look at all addresses on MLS for confirmation.
Nice work sir! makes me tired just thinking about it.
Don't let the secret out too much on Yucca Valley (looks like one of your best deals possibly)
I think I can speak on behalf of Uncle Sam and his entire family in saying thank you for all that tax revenue.
@David Jarvi you're right about Yucca, problem is all the contractors are on Meth...so it's a little tricky to get good rehab people
@Peter Hanson are you still using the same strategies to find deals? Lots of low cash offers on MLS deals or are you in direct mail or wholesalers bringing them to you?
@Rich S. I have never used direct mail. I have lots of agents and wholesalers bringing me deals. I also find a few on the MLS
Man you just knocked this thing out of the park over the past few years.
You must have a great network of agents and wholesalers to get this many solid deals!