My First Creative Wholesale Real Estate Investing Deal!

Back in 2004 I closed a deal with a house owned by a friend mine.  The houses was located in Montclair California about 35 miles east of Los Angeles.  It was a 3 bedroom 2 bath fixer upper home that had a lot of deferred maintenance. This property was particularly desirable because it was 5 minutes from the 10 freeway and about 3 minutes from Montclair Plaza Mall.

I bought the house on contract for $350,000 in as is condition. I noticed when I did my comps that the house would easily appraise at $430,000.  With a deal like this in its present location and condition it was hard to come by.  In this area and this time frame there was a lot of buying activity.  I knew I had a property with equity that appealed to investors and homeowners in this area.

What I did next was something from old real estate investing books I had read.  I took pictures of the property and marketed it for $370,000.  I quickly found a couple of real estate investors who lived in the San Bernardino California area.  They came out, saw the property and quickly agreed to price and terms.

I then contacted a friend of mine who was a real estate agent to put together this deal because my knowledge of how to wholesale a real estate deal was minimal at best. During the Escrow phase we agreed that the seller, my friend and the investors would pay all closing costs.My friend had a loan on the property of less than $50,000 and she was highly motivated to move to Texas.

The investors had some issues during escrow securing financing but 65 days later we finally closed the deal.

Here is the Breakdown of how it all worked out

• The investors got a property for $375,000 (the $5000 was for my agent friend who put the deal together)
• My friend sold her house to me for $350,000 on contract
• Both the buyer(the investor) and my friend(the seller) paid their own closing costs.
• I walked away with $20,000 check

Ultimately it was not a pretty deal, but I was patient and consistent and knew I had an area that was desirable.