Hi BP,

On January 5, 2015 my partner and I put our first property under contract. On January 30, 2015 we closed the transaction and made $17k total profit. This thread will detail how we found the deal, obstacles we overcame, lessons learned, and everything in between. So lets get started!

It was early December and I was looking at deals in my email mailbox for leads while making lunch. I found one that looked promising so I called the seller. After a couple of minutes on the phone I asked when I could view the property. He said that he would be there for another 30 minutes so I stopped making lunch and rushed over to the property. It turns out the seller was selling the property for his deceased father, had two mortgages, and were late on payments for 2 months. The property was in a great location but needed new flooring, update bathrooms/kitchen, pool work, landscaping, a little demolition work in the backyard (the owner made a DIY gazeebo type thing in the backyard...it was a hack job), and foundation repair. My partner and I decided to make an offer for $180k and close in 15 days. At this point, we were planning on flipping the property. The seller thought about it for a couple days and told us that they accepted an offer for $190k. At this point, we thought the lead was dead but informed the sellers to contact us if their deal falls through. 

Fast forward to early January, I get a call from the seller saying their deal fell apart because the investor couldn't obtain financing. He wanted to know if our offer was still on the table for $180k. I gladly told him yes! The next day, we met the seller at the property to sign a purchase contract. I was able to negotiate the price to $178k because I expressed concerns about the foundation. We literally signed the purchase contract on the hood of my car in front of the property. The next day our contractor met the seller at the property to give us an estimate. He called us an hour later and advised us that the foundation is in pretty bad shape. He basically said he wouldn't take this project on as his first flip. At this point, we were trying to figure out what to do. Do we take the risk and flip it anyway, cancel the contract, or try to assign the contract? We decided to assign the contract so we called every investor that we knew. No one was interested because of the foundation repair. My partner ended up looking up wholesalers on Google. He found a wholesaler who said he has a list of cash buyers that would be highly interested in the property. We agreed to split the profit 50/50 with him. The next day, we scheduled a showing at the property and our partner brought 20-30 investors with him. Within an hour, we received several full price offers at $195k. My partner and I couldn't believe it...it was like a dream come true! 

It wasn't all green yet though because our initial contract with the seller was expiring in a few days. We only gave ourselves 15 days to close but we needed more time. So we asked the seller to extend the escrow period by 7 days. He responded asking for more money, roughly $1500 more. We said we cannot pay you more and he decided to extend the close of escrow date anyway. Luckily we worked with a great investor friendly title company who handled all the addendums. We had to extend the escrow period again because it took forever for Bank of America to send the title company a payoff. 

In the end, we cleared a total profit of $17k in less than a month! $8500 to us and $8500 to our wholesale partner. Not bad for our first deal. We learned that 15 days isn't enough time for us to close so we will use 30 days from now on. I also learned why I love being a real estate entrepreneur. We created a win win transaction for everyone involved. The seller got rid of his father's house after dealing with probate for over a year. Our wholesale partner made a nice profit, simply for knowing cash buyers. Our buyer hopefully will make a decent profit when they flip or rent it. And the El Dorado Lakes Golf Community has one less eye sore in the neighborhood.

We couldn't have closed this deal without the resources on BP, being creative and persistent, and a little luck. Thank you to everyone involved! Cheers to the future!