All Forum Posts by: Brock Thomas

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $150,000
Cash invested: $25,000
Sale price: $210,000

Purchased this property subject to the existing financing. It was a simple rehab of just paint, flooring and a handyman scope. I used the prior owners insurance to get a new roof with no money out of pocket. This was a win-win-win deal. I stopped a foreclosure from going on the owners record and gave them walking money, made money on a flip and gave a buyer a nice house.

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

It was in a high demand price range and great school district. The seller was willing to let me buy this property subject to their financing.

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

SEO/ PPC marketing. This was a divorce situation so it was difficult to get them both on the same page. It took a little patience but being direct and honest got this one done.

How did you finance this deal?

Subject to the existing mortgage.

How did you add value to the deal?

Cosmetic updates including paint (inside & out), flooring throughout, some updated light fixtures and hardware.

What was the outcome?

Net profits were around $25,000 with only a few trips to the property. There were 6 offers in the first few days it was on the market. We were under contract for $215,000. Covid-19 scared the buyer and back ups had moved on. Once it relisted it sold quickly to a strong buyer.

Lessons learned? Challenges?

I want more subject to deals. The challenge was working with the husband who didn't want to communicate unless he needed something from me.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I am the agent. I worked with a friend to create a very profitable marketing program. The profit is in the people/ connections

@John Neff

W myth for real estate investors is a great one

@Sameer Kh yes sell it and buy one without a hoa. They eat up cash flow. Look for one that is profitable and cut your ties with this one. The market is liquid so time to move on.

@Miles Stanley don’t do it unless most of your comps did. I never replace the two wire that doesn’t have the ground other than when I remodel the kitchen and baths when I am getting them. Find another electrician. He doesn’t understand the business you’re in.

@Rick Oaks this is very common and most small multifamily in my area are the same. I took historic water cost over the year and added a water fee to each tenant in addition to their rent. So at my 12 unit that is $360 per month in additional revenue that offsets the expense. Separately metering is too expensive. It’s all in the presentation to the tenant/ prospective tenant.

@George Yu. What was your land cost plus site work? What percentage of that was of your overall building cost? How big was your lot and what is the minimum size you look for? I have a similar but smaller plan I am going to build in KC. I may have the ability to expand the project if I can buy a house for the right price, rezone and tear it down. It sounds like a similar model as you are using. Prices are getting to the point you can reproduce for the same amount so I’d rather find lots and build affordable housing but not section 8 stuff.

@Mariyah Trammell find a successful brokerage in your area and ask to shadow a successful agent or two. I would recommend starting on a real estate team. Make sure it’s a successful team with a admin so you can find your way. I find a lot of new agents have a false impression on what it takes to be successful. YouTube videos on real estate lead generation. If you can successfully lead generate it will all fall into place.

@Bryan Carleton Back in 2007 I put an offer on a hud home for a investor I had known for about 2 years but never done business with. He backed out last minute for some reason I can’t remember. He came to my house and gave me $2000 cash for my time and effort. A month later I called him on a opportunity. He made $40,000 on that flip. Then we did another one and another. To this date we have done well over 100. We have had a ton of success with each other. I called him on the opportunity because of the respect he showed me when I could have called a number of other ones I had worked with. Point is everyone’s time is worth something and relationships are important in this business. You never know she may have a few deals to bring to you. If you want longevity in the business treat people with dignity and respect. My bet is your priced too high to sell. Either that or she has no clue what she is doing which it doesn’t sound like. Good question and best of luck!

@Carly M. Contact me I can help you price it and inform you if the market conditions. Waldo is great and there is a lot of people looking for duplexes there. You can find me on Zillow or google me for all my contact info since I can’t post here

@Bob Prisco what is your interview process for hiring a property management company? Good ones are not easy to find in small single family. I can’t imagine finding a property management company that would properly manage in D class areas. Property management is a tough job and most good people use it as a stepping stone.