All Forum Posts by: Gus Muller

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $193,000
Cash invested: $35,000
Sale price: $272,000

This was my first purchase as a real estate agent. I sold myself the house, so earned a sales commission and moved in. The basement was finished nicely already with a bedroom, living room, 3/4 bathroom, and laundry. I moved in a few roommates that each paid $500/month to rent from me. It was a house hacking situation. I ended up remodeling the kitchen and main floor bathroom and lived in it. I had equity, so I was able to pull out a $35K HELOC loan agaist it, which gave me the cash to take on my first true flip property (2534 Fillmore Street NE in my investments). When I did sell in 2014, all of the gain was tax free as it was my primary residence for over 2 years, which was a huge plus!

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

I had researched the area. This was bank owned in a prime spot of NE Minneapolis. I had just gotten my real estate license, so the buy side commission helped a lot. The house was in great condition on the exterior, great mechanicals, and recently finished basement I could live in while I did the rest of the renovating.

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

Through the MLS and I negotiated with selling agent that represented the bank on the foreclosure.

How did you finance this deal?

5% down conventional loan.

How did you add value to the deal?

Refinished hardwood floors, paint, removed wall from kitchen to dining, new kitchen, new main floor bathroom, new carpeting upstairs.

What was the outcome?

I walked from the closing with about $40K tax free after living there for 7 years and leveraging the equity line of $35K on my all cash fix and flips.

Lessons learned? Challenges?

I got pretty lucky with the area and general condition of the home. I learned a ton about construction with this one.

@Mitch Kennedy I can show you the ropes in exchange for some grunt labor/demo/snow shoveling if you're interested. I've got the perfect starter flip if you'd like to get a hands on experience and see the property from start to finish. Shoot me a message if you are interested. This next project closes March 6th and is located in a nice area of NE Minneapolis.

@Bruce Runn absolutely and appreciate your input and experience! I will update with any responses I get!

@Bruce Runn I'm sure it is a joke when you, as an investor already, receive these mailings. My house is paid off free and clear, and if I got one of those letters I would also laugh at it! However, I believe the essence of the strategy is to find a motivated seller and get them to respond. I'm sure many of the mailings do not reach their intended targets, but I think this is just part of the game!

Anyone from Minneapolis or the surrounding area have a lead on a good contractor that could quarterback a flip I have coming up March 6th? I have most of the subcontractors lined up and am in need of someone who can project manage and do some light framing, cabinet installation, etc. My subs will cover: hardwood floor refinishing, painting, patching, sheetrock, tile, electrical, plumbing. Does anyone know someone who could see the project through? I can pay hourly, weekly, or project flat fee with profit bonus at the end.

I usually fill this role as I am a licensed contractor and real estate broker, but I need to focus my attention on filling the pipeline with deals.

Thank you!

Hi @Mitch Kennedy! I am a fix and flip investor and my next project closes March 6th in NE Minneapolis. Do you have any remodeling skills?

Investment Info:

Single-family residence fix & flip investment in Minneapolis.

Purchase price: $107,500
Cash invested: $40,000
Sale price: $175,000

My fifth flip back in 2013.

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

I was ready for another project, and the exterior of this house didn't need much. The interior was pretty bad. It will forever be known as, "The Cat Pee House".

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

Found through the MLS and negotiated by myself as I am a licensed broker.

How did you finance this deal?

100% of my own cash.

How did you add value to the deal?

Full remodel, new kitchen, baths, flooring, etc. No big changes on this one.

What was the outcome?

Decent. Would have been better if it didn't border a less desirable area and it affected the appraisal.

Lessons learned? Challenges?

One of my laborers who had been working with me and doing much of the grunt work decided half way through the project that he wanted more money. I didn't have any other options at the time than to pay so he would complete the work. Needless to say, that is the last he worked for me.

Investment Info:

Single-family residence fix & flip investment in Minneapolis.

Purchase price: $104,900
Cash invested: $40,000
Sale price: $202,500

My fourth flip back in 2012

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

This house was in excellent shape. Good windows, exterior, roof, etc. I figured it wouldn't take much. The basement was nicely finished with a gas fireplace and 3/4 bathroom that just needed to be cleaned up.

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

On the MLS and negotiated it myself as I am a licensed broker.

How did you finance this deal?

100% of my own cash.

How did you add value to the deal?

Full remodel. Didn't make any major additions or changes to the house. Was pretty simple.

What was the outcome?

Outcome was great we made a hefty and pretty fast profit.

Lessons learned? Challenges?

No big surprises on this one, except for an underground bees nest that I found one day mowing. Ouch!

Investment Info:

Single-family residence fix & flip investment in Minneapolis.

Purchase price: $92,900
Cash invested: $65,000
Sale price: $226,000

My third flip in 2012

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

I could immediately tell from the pictures that this house had "the bones". Beautiful craftsman woodwork, large inviting entryway, and a huge master bedroom upstairs.

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

I found this through the MLS as I am a licensed broker. The negotiating was pretty straight forward. Multiple offers, but I had built rapport with the trustee that I bumped into at the showing.

How did you finance this deal?

100% of my own cash.

How did you add value to the deal?

Added a 3/4 bathroom upstairs to service the large master bedroom. Full renovation, and kept many of the original features and charm. Exposed the brick chimney in the kitchen which added a nice bit of eye candy and flair.

What was the outcome?

It was excellent. We asked $240K and had a full priced offer immediately. A local appraiser screwed me with a low appraisal, so we decided to split the difference and we took $226K.

Lessons learned? Challenges?

I was the first person to see the house within an hour of it listing. I spent maybe 10 minutes there, and proceeded to head towards the front door so I could get my offer in. On my way out, I noticed a woman in one of the bedrooms going through some paperwork. I had made it all the way outside, and decided to turn around, having a hunch she was involved with the home. I told her I would restore the home, let her come and see it, and let her know I was making a full cash offer. This did it!!!

@Bruce RunnGreat question for sure! I do have a lot more experience in real estate than most wholesalers. And a ton more contracting experience which I believe will help me negotiate better. I am also not looking to only wholesale. I can fix and flip, wholesale, and offer traditional MLS listings as I am licensed and experience to do them all.

I most likely will not be buying properties from someone like yourself with multiple 2-4 unit properties and living in Minneapolis. I hope to contact some out of state owners, or out of the area owners who are tired of dealing with their properties. This is a test phase, so maybe a more personal approach and letter will get the attention of sellers versus a blanketed "one size fits all" approach. I am pretty sure we will end up doing more mass mailings when we officially launch in April, and we have the funds to take this approach. I will update with results!