Wholesale resulting from a wrong turn

[Bryan Hoyem]

Investment Info:

Single-family residence wholesale investment in Spring.

Purchase price: $90,500
Cash invested: $2,664
Sale price: $96,622

I found this property after taking a wrong turn in a neighborhood and seeing a For Sale by Owner sign. The owner had the property as a rental for a number of years and was tired of being a landlord. After negotiating the price and signing a contract, I reached out to my local real estate investors association and found an end buyer who was interested in the property and assigned the contract to him.

What made you interested in investing in this type of deal?

The property was actually not far from another house I was rehabbing at the time so I was very familiar with the area market. The price the seller gave on the initial phone call was interesting right away so I knew it could be a deal.

How did you find this deal and how did you negotiate it?

I found this deal by calling a for sale by owner sign in the yard. I negotiated with the seller initially by simply asking if she could accept a lower price which she did. After I had an inspection done and found there were foundation issues, the seller agreed to negotiate down a bit more to compensate the costs of foundation repairs. Negotiating with the buyer then was done with a fellow member of a local real estate investor association.

What was the outcome?

The outcome was an assignment fee paid to me at closing.

Lessons learned? Challenges?

In this deal, I initially was looking at the property as a flip or to buy and hold. When the inspection revealed foundation issues, I decided to pass it on as a wholesale. The seller felt as though I misrepresented my intentions so in future deals I will try to communicate even more clearly with the seller at all steps of the process. It did not seem to have future impact in this case but if the seller had owned other properties, I would have hated to have burned that bridge.