I often get questions from aspiring wholesalers about the steps involved in an REO wholesale flip.
In today’s article, I’ll walk you through one of my most recent deals from beginning to end..
While checking the MLS about a month ago, I noticed a property that just hit the market. It was located in an area that I have done quite a bit of business in, and have several buyers looking for deals in..
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Wholesaling REO Property Success: Case Study
The property was listed as a 2/1, and was priced at $11,000, which is a phenomenal price for this area. I recently sold a similar property in the same neighborhood for $25,000 so I knew this was priced right, and was out the door to look at it within minutes of seeing the listing.
Once I got to the property, I was pleasantly surprised. Aside from the fact that the house smelled like a curry factory, it was in great shape. It also had 3 bedrooms instead of two, which was just icing on the cake.
I rushed home to write up an offer, and had it submitted within the hour. I made the offer directly to the listing agent, allowing her to make both sides of the commission, as well as the $3,000 selling agent bonus that was being offered.
While I was at the property, there were at least four other investors there looking, so I knew my offer had to be competitive. Knowing that I could easily wholesale this property to one of my investors for around $25,000, I made my initial offer for $16,000.
The following day, I got a call from the listing agent asking me for my highest and best offer. She let me know that my offer was going to have to be over $20,000 if I wanted the property (agents do this sometimes, especially when they are getting both sides of the commission, plus a $3,000 bonus).
I had already spoken to two of my wholesale buyers and asked them what they would be willing to pay for a property similar to the one I had offered on. Both investors told me they would have to be in the $25,000-$30,000 range. I ended up offering $21,000, all cash, with no inspection contingency.
I got a call from the listing agent the following day, letting me know that the bank was taking my offer. They had 21 other offers on the table, one of which was for 11k more than I was offering, but it included a financing contingency.
I immediately called up my wholesale buyers that I had spoken to the day before and gave them the property address with a price tag of $29,000.
I ended up getting a cash offer of $26,000 from one of my investors two days later.
We did a simultaneous closing at my title company 30 days later, and I walked out with a check for $4,398.24.
Not a huge payday, but considering I only had a few hours of work in the deal, I was pleased as punch!