All Forum Posts by: Owen Dashner

This house came in as a lead through our website right around the time Covid came down. It was in a great neighborhood near 180th and Harrison in Omaha, built in 2002. 

The sellers were getting divorced, and the wife had already moved out and wanted to get the house sold. She was responsive via email at first, then ghosted us for awhile - resurfacing in June. The husband was still living in the house and did not seem super motivated to be out, but the house needed some work (mostly cosmetic), he was unemployed, and in the end they ended up accepting our offer of $150K.

We closed in 2 weeks and there was a lot of stuff left behind, and the house was dirty. We debated and debated on whether or not we should do the cosmetic work to it and list and sell it retail for the ARV of $195K, but in the end we determined we would likely make almost as much money just by fixing a couple things and selling it as is. So, we ended up telling another investor about the house who had some rentals in the area and really liked it. He ended up buying it as-is for $170K cash in about a week.

In the end, it ended up being about an $18K profit. Best of all, no rehab!

This is a house we bought from a wholesaler in La Vista, NE (which is a suburb of Omaha) for $98K. We turned around and sold it on the MLS for $125K a week later after cleaning it. The investor we bought it from was planning to do some work to it and sell it retail, but he happened to get one of our letters in the mail and decided to call us and see what we would offer.

The house was located in a subdivision with mostly slab on grade and crawlspace type ranch homes with $110-125K price points. Some $150K split entry houses are sprinkled in the neighborhood as well. This house was unique in that it had a 400 sft addition on it, plus a basement (unusual for ranches in that neighborhood). We estimated the ARV to be in the $150K range, so we decided to wholetail it instead of doing the work and retailing it, because we would end up with roughly the same profit.

The house was in livable shape, but needed mainly flooring and paint, and some other minor repairs. We found hardwoods underneath the carpeting, so that was a nice bonus. And the kitchen was in pretty good shape as well.

Our only surprise on this one was that it ended up having termites, and required about a $1,200 treatment.

So roughly about an $18K profit after all soft costs and basically just cleaning it and treating for termites. On to the next!

@Victor Oben, have you tried using escalation clauses in your offers? I just bought one last week off of the MLS using an escalation clause. It went for $12K over asking price, but we got it for $3K less than our max on the escalation. Still a good deal because it was mispriced.

@Simon Obas, Google "we buy houses" and add your city name. Most of the websites that pop up are wholesalers.

I own and operate a flipping/wholetailing business using a sizeable LOC to fund our purchases. They are great - they provide liquid capital, you don't pay interest unless you have the money out (unlike a mortgage), and they typically do not require all of the underwriting headaches that mortgage loans do. The downside to them is that banks could potentially freeze the line or shut it down if the economy tanks and lending tightens.

@Brandy Smith, backsplash is a really good, low cost way to add bling to a kitchen (although I'm not sure I would go with "fake brick", try subway tile or mosaic instead). So is new cabinet hardware and lighting. Painting cabinets vs replacing them is also a good way to upgrade without breaking the bank, but I would get someone who knows what they are doing instead of DIY. A poorly done paint job is worse than not painting at all.

I have had several investor friends recently in Omaha who have seen their rental properties get advertised by a scammer who then collects "deposit" money from potential applicants. I have thankfully never had this happen to me yet, but I was wondering if there are best practices out there for prevention and also for how to handle when it occurs. Any advice is appreciated!

As Jay mentioned above, consult a real estate attorney on the seller's behalf about filing an action to quiet title. If it is a great deal, pay for the legal fees. What methods or companies for skip tracing have you tried?

@Jason Polykoff, the 50% rule is simply a quick filter/screening tool to sort through deals and is by no means exact. It basically says that a property's net operating income will be roughly half of its gross income. Principal and interest are not included in the calculation, but taxes and insurance are because they are operating expenses.

Vacancy, maintenance, utilities, property taxes, insurance, etc. are all operating expenses and part of the 50% you are subtracting from the gross income.