All Forum Posts by: William Bratrud

 Hi Aaron, unfortunately he was not bonded or Licensed. I hired him to replace the ducts underneath the home, he was a side job sam HVAC technician that i had used a few times in the past....Hard lesson learned, I Guess thats what I get for trying to save a buck and hiring an unlicensed sub. : /

It was not in the farm. It was actually a pretty bad area, not bad crime wise just a little ghetto and trashy looking due to dirt road and messy neighbors, right against the 15 freeway, But the price point hit the largest market share thats why it worked out so well. It seems anything under 300K that is financeable in our area goes pretty fast in the current market! that has been our golden ticket the past couple years.....trying to keep our flips ARV around the $300K range which is pretty tough to find right now.

Investment Info:

Mobile home fix & flip investment in Wildomar.

Purchase price: $110,500
Cash invested: $72,000
Sale price: $288,000

This was a highly neglected and undermanaged rental property in need of full rehab and then some. This was an all cash deal due to condition and non permanent foundation. We purchased directly through the listing agent offering her a double commission plus the listing once completed. There were Lots of surprises once acquired, ( Rat infestation in AC ducts, bad galvanized plumbing, No permits, leaky roof, foundation issues, stray cat infestation, windows falling out, opossum infestation.

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

It was disgusting and everyone else was afraid of it, like usual we saw the potential while others saw only the problems.

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

We Found this junker on Zillow and made an all cash offer directly through the listing agent. I also Sweetened the deal by offering the agent the contract to sell it once we completed the rehab.

How did you finance this deal?

100% Financing for this monster and it’s rehab was provided by Cash from a private investor who trusts us and has done many deals with us over the past couple of years.

How did you add value to the deal?

What I brought to the table..... I found the deal, created the rehab budget and profit analysis, negotiated the acquisition, then provided and managed the rehab crew and sub contractors for the duration of the project.

What was the outcome?

We ended up netting just over $75K when it was all said and done. Our private investor received 25% of those profits as his ROI.

Lessons learned? Challenges?

Our HVAC contractor ran off with $2500 that we paid him upfront before he completed the work. Be careful with the lowest bids and don’t trust everything people say even if you know them and have used them several times in the past. never pay a contractor in full before the job has been completed, don’t make things personal.....remember it’s just business

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

We worked with Jessica Woldanga from reliable realty as our agent in this deal. She did a great job helping us negotiate with the potential buyers for the highest price. I would recommend her to anyone looking to sell their home for max value in Southern California specifically in Southwest Riverside County.

Thanks for the great info Ross, good stuff!

Yes, development was the initial plan. Normally I won't do a deal that isn't at least a 10% ROI or 30% annual ROI. This was a special circumstance seeing that it was a family member plus looking ahead to the market uncertainty and time it was going to take to develop we felt like it was a justifiable move.

Aaron, I totally agree. My wife and I have kept the same live smart philosophy ever since our first home purchase. our current residence was purchased for $50K below appraised value and owner financed at 4% for a 30 year term. it has a detached garage that we converted into a 700 s.f guest house that rents for $1100/m.o. that only leaves a tab of $350/m.o that we have to pay for our 2800 s.f house on 2 acres in Southern California! 

again this never would have been possible had we not made the leap to purchase a home when we were young and grow equity that we otherwise wouldn't have had. 

Investment Info:

Single-family residence wholesale investment in Wildomar.

Purchase price: $95,000
Cash invested: $96,500
Sale price: $105,000

Bought vacant land, obtained a street address from city and conducted a perc test. Sold a month later to a family member for a quick $5k.

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

We were planning to develop the 1 acre property with a new manufactured home but with the market slow down and the amount of time it was going to take we decided to make it a quick flip for a $5K profit instead.

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

I found the deal on Zillow the day it came out and through my agent we offered the seller his full asking price of $95K. He accepted, we completed our due diligence and a few days later closed escrow. Large lots are rare in the area so we knew it would be desirable at resale. Similar properties were on the market and selling for $110K +

How did you finance this deal?

We paid cash for the property

How did you add value to the deal?

We applied for and obtained a street address, we verified utility costs, development costs, and acquired a perc test on the property. Other than a a couple hours to make a few calls, schedule a perc test and visit the city we didn’t do anything to improve the property.

What was the outcome?

Originally our plan was to develop the property but we knew that it would take several months to complete. We decided to list the property at $120K while we started the development application process. Shortly after we found out that a family member was looking to buy land in the area so we decided to sell it to them at a good price.

Lessons learned? Challenges?

Utility applications can take several months and developing vacant land is a lengthy process, so market timing is critical. Sometimes the wiser choice is risk management and market foresight and it’s better to avoid the long investments when the market downturn is likely hanging in the balance. Although we probably would have still made a decent profit I decided the safer choice would be to have our cash liquid for other opportunities.

Investment Info:

Mobile home fix & flip investment in Wildomar.

Purchase price: $118,500
Cash invested: $48,000
Sale price: $242,000

We purchased a 1980 2bd/2ba 1152 s.f mobile home through local real estate broker who works with us on a regular basis. The home didn’t have a permanent foundation so it was a cash deal. The place was a mess, the owner had deceased and left the property in poor condition not to mention the two linx wildcats that he had living inside of the house with him.

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

It was a pocket listing about to hit the market. We had worked with this real estate agent on a few other flips and she had never failed us yet. At the asking price it was a no brainer, the market was smoking hot and I knew that we could make a good profit with a good rehab.

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

The listing agent who we had established a good working relationship with through a couple prior deals brought it to us before she put it on the market. Technically at this point it was a pocket listing. We offered $100K but the seller rejected our offer and told the agent she wanted it listed in the MLS. She listed the property in the MLS and after a few offers came in we ended up winning the bidding war at $118,500 with the listing agent going to bat for us.

How did you finance this deal?

100% Investor financed with private money

How did you add value to the deal?

We did a complete rehab on the property. Flooring, windows, granite, paint, sinks, tubs, toilets, cabinets, landscaping, and lots of surprises and extra repairs along the way.

What was the outcome?

We listed the property with the same agent who brought it to us. That’s the way we work with many of our agents. It sold within 2 weeks for $2k over asking price. All said and done the profit was around $56,000 in 2 months.

Lessons learned? Challenges?

Beware of spongy sub floors in mobile homes. They usually indicate extensive water damage and are a rehab nightmare. There’s a $500 little piece of paper glued to the inside of the cabinet in every mobile home that shouldn’t be painted or removed. There are two little $500 metal decals on the outside of every mobile home that shouldn’t be removed or painted either. Rehabbing mobile homes are twice the work of rehabbing stick built homes. Building relationships is critical to finding deals.

Investment Info:

Mobile home fix & flip investment in Wildomar.

Purchase price: $75,000
Cash invested: $140,000
Sale price: $299,000

We purchased a piece of vacant land that previously had a mobile home on it but it had since been removed. The upside is that all utilities were in place which made development much easier and shortened the development time and cost.

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

We had done a few of these in the past and knew that they had potential to make a profit. This was a fairly hands off investment strategy as most of the heavy lifting would be completed by other contractors and the new home manufacturer. We had another fix and flip going at the same time but wanted to continue to invest our money without needing to invest our time.

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

I found the deal on Zillow and contacted the listing agent directly. We asked her to represent us and she gladly accepted since this meant a double commission for her. The asking price was $87K but we offered $75K cash using the astronomical city fees as our bargaining power to try and get the purchase price down. Initially the seller rejected our offer so we walked away. 3 days later the agent called us and said the seller would agree to $75K.

How did you finance this deal?

Cash from private investors. We offered them a 10% return in 6 months

How did you add value to the deal?

We redeveloped the vacant property with a new 4 bed 2 bath manufactured home. After a ton of back and forth negotiations with the city, they waived over $22K in development impact fees which really helped our bottom line.

What was the outcome?

The home sold in two weeks for $5K more than our original estimate and due to the city fees that were waived we saved an additional $20K from our original budget.

Lessons learned? Challenges?

Everything is negotiable, dont give up the first time someone tells you no. Try again, and again, and again until the door is absolutely shut in your face or you get what your seeking. Persistence is key, sometimes standing your ground is the best option, you never know how things may turn in your favor.