Updated over 8 years ago on . Most recent reply
It's almost like our triplex was free
Actually, if you factor in the ARV it's like we got paid to make more money. Nuts
I seriously love real estate. Where else can your effort pay off to this level?
Our triplex is a full 203k loan. Our total mortgage amount is 165k and our total out of pocket is about 9k, that's closing costs, fees, insurance, appraisals everything. The property's confirmed ARV is 230k and we stand to bring in $500 cash flow while living in the bottom unit.
The 203k is a long process, we started looking for properties in April and didn't get an offer accepted until the first week in June. It took until Mid August to close the deal. In the mean time, we wanted to keep progressing on our real estate goals so we decided to try wholesaling. We kind of putted the idea around for awhile. Once we finally took action and advertised, we found a house, put it under contract, and found a buyer within a two week period!
The wholesale deal came with quite a few headaches. The owners had quite some unsavory people living with them and they were hesitant to leave. The house was also facing sheriff's sale and we had to file some court documents and get it postponed. On the plus side, the seller was super motivated and wanted to leave ASAP. In the end, it took about a month to get everyone out and get the seller ready to vacate and close. We made 10k off the deal before expenses.
I should add that both of the deals we made were very frustrating. Some people advised us to walk away and find something easier. But we kept trodding along tackling each problem as it came. None of the issues were very hard to solve though. 90% just required a phone call and some paperwork.
Our next step is to buy properties and wholesale deals in a 1:1 or greater ratio. So for every wholesale deal we make, we want to be able to buy one property. We're building a postcard campaign to market to the areas we want to hold in. We'll probably sell the "A" and buy the "B" and "C" deals. Our goal is to get a lot of good cash flowing property and then hoard money for the bubble.
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I love the part where you said "Some people advised us to walk away and find something easier". I recently pulled the entire list of properties for my county, and filtered it by duplexes. I then compiled a list of properties I will hand-write letters to explain I want to buy the duplex and house-hack (I won't use the verbage house-hack).
A few friends commented "that seems like a lot of work", "how long did that take?", "how did you know the county would give that to you?", "do you really think someone will sell to you?" To that I say, "it wasn't", "not long", "I didn't", and "yes".
My point is too many people don't want to do what others (yourself) are willing to do, and THAT is how you make some $.