It was a week before Christmas and I was just getting ready to shut it down for the week…
I remember I told my wife these exact words as I prepped for my week of unplugging:
“I don’t care how good a deal comes along while I’m away, I won’t take it!”
Famous last words…
In this business when a good deal comes along you have to take it and break your own rules sometimes.
Whatever you do, don’t break these rules – but sometimes you have to break other kinds of rules like taking time off to grab a deal that you otherwise would have missed.
I have to be honest here, until this happened to me, I had never even thought of it before and I stumbled upon it totally by accident.
But to get these kinds of deals, it’s really not an accident. To get them, you do have to do one thing consistently and that is network and get yourself out there.
If you are exposing yourself and making yourself available and most importantly TAKING ACTION…then good things will and do happen to you.
And you too will start to find deals like this one from the most unlikely sources…
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
How to Find Houses to Flip From The Most Unlikely Source
If you are an active investor, then you know the schtick: find properties and although most will be rejected, put offers in – and in the end, a small portion will get accepted.
But sometimes investors will put multiple offers out there and for whatever reason, totally unexpectedly, they may get two or three under contract all at the same time.
The problem is that in some cases they may not be able to handle more than one or two at any given moment – so they suddenly find themselves with an embarrassment of house flipping riches, so to speak.
Maybe they can’t get the money they need to finance, the bank won’t let them borrow, or there maybe there are some complicated unforeseen title issues. Whatever the reason, they can’t consummate the deal.
In my market we are seeing investors get properties under contract and although they think they have the money – private, bank or hard money – for whatever reason they can’t seal the deal when the time comes.
So for you the real estate investor with a superior knowledge of flipping houses with no money, this is a tremendous opportunity for you!
Maybe in some cases, these investors just can’t handle all three projects at the same time. It doesn’t really matter what the reason is, the point is that other investors may sometimes get in over their heads and want to unload properties they have under contract.
So having learned this technique a few years ago, I look far differently on my fellow real estate investors in my markets versus the way I did when I first started investing. I treat every other investor in my market as a potential parter and not necessarily a potential competitor.
And I highly suggest you do the same…
Some of these people may potentially be partners for you at a later date or they just may be other like-minded individuals who you can share ideas with and become friendly with. Chances are in your market, the real estate investing circle is not an overly large one, so treat everyone as a potential friend and or partner – until they prove to be otherwise.
And even in those cases, you can potentially partner with them as well.
The Unlikely House Flip
The first house flip we did like this, there was another investor who I had met through a REIA meeting. We weren’t particularly close, but we knew each other just enough so that he trusted me and he saw me doing a fair amount of business in my area.
He had two deals going on at the same time and thought he was going to close on both of them. Unfortunately for him, on the one deal he was financing through a bank, they saw that this other deal was going on and they felt that he was going to be overleveraged.
They denied his loan all of a sudden, he was left with two deals but financing on only one.
That’s when he called us.
So he called me up and said told me that he had one deal going and another one he needed to close on but if he didn’t close on the second one he would lose his deposit. He offered me the deal in exchange for his deposit money back.
So I called him back and I told him that I would take a look. So I drove to the property and within 20 minutes I knew it was a good deal. He had very specific numbers on the renovations and I evaluated all his numbers and he was right on the button. The comps he had run were right on as well. So at that point, with Christmas looming, the kicker was that I had to close within a week and a half or two weeks. It was crazy.
Week off for Christmas – forget about it!
I called him immediately and told them I take it off his hands. We ended up making a nice five-figure profit on it.
To this day, we have a very good relationship and since he’s a real estate agent – he’s actually brought me other deals since then – none of which turned into actual sales as of yet. But regardless, the relationship still exists to this day.
The “Too Much Money” Problem
We actually find ourselves in VERY strange situation right now.
We have a ton of deals going on right now – and a lot in the pipeline – but we actually have more money available to us than we have deals to fill that money with.
Don’t get me wrong, this is a great situation to be in – its just that I am having a hard time wrapping my head around it.
As a results, this “competitor” technique is one we are using more and more these days. This is especially true as we become better known in our community and our region. It’s just a happy outgrowth of some previous success – and something to strive for when you are first starting out.
This way of finding deals is particularly interesting because it is certainly a means of finding deals that I probably never would’ve thought of a year or so ago.
The Counterintuitive Acquisition Method
When you think about it – this method of acquiring properties is completely counterintuitive – why would you ever find a deal from someone who in essence, is your competition?
But when you think about it, no one is your competition – everyone in your real estate investment community is a potential partner – even in some cases the ones you DON’T particularly get along with.
But especially other investors…
This may be a more advanced strategy and for people who have a little bit more experience in the market but nonetheless it’s a very good way in which to find houses to flip. Give it a try yourself and see how you do!
Made it this far? Leave a comment below. What do you think? Is this a good strategy? Have you ever done this kind of thing before?
Let me know what you think by leaving a comment below!