A bird dog sent me this distressed house that I negotiated down to $12,500
It’s in California, its a 3/1 1,000 SF ranch fixer, but wait,
It’s out in this godforsaken desert hell hole town called Trona, I had never heard of it.
It’s a cute small town with gorgeous mountains nearby with spectacular views.
Zillow gives a zestimate of $10,843 But the rent estimate is for $925
Now the thinking gears are in motion, design an asskicking ad to run on Craig’s List in nearby cities, like Los Angeles. I bet there is some 40 something urbanites with wife and kids that wud luv to get out of that concrete and traffic city hell hole.
This is fun, even if I only make a few buks or cant sell it, the process of looking the deal over and the negotiations and sending the contracts and the chance of making some serious green, it’s a rush.
Let’s make some Money
Rando
Rando, why don’t you just throw your money in the fireplace?
Never pay more than the zillow estimate unless you plan retiring in it.
You can buy liveable houses in Detroit on realtor.com or trulia for a few grand in one area while people are paying a million for houses in another area of Detroit. You can also find people paying the same section 8 subsized rents too. Doesn’t mean the house for a few grand is worth a million like it’s selling for at the other end of the city. And, it could probably be decades before those cheap areas gentrify.
When I google Trona, it says the population declined from 6,000 to 1,900 in the past several decades. That’s over two thirds of the population that was lost. Big red flag right there.
The distance to LA is 160 miles or a three hour drive.
In Metro Detroit, I can find you houses in subdivisions that sell for $20m within a 20 minute drive.
I hope you’re joking, but just in case you’re not, I repeat, don’t throw your money away like that. If you want a “rush” from doubling your money, go to Vegas and put it all on red at the roulette table. Your odds are probably a lot better there too.
Dave
Haha, my friend, the beauty of wholesaling real estate is, I don’t risk a nickel.
If I get a house on contract for x amount and it don’t sell, and the seller is unwilling to re negotiate a lower price, I cancel the contract and I walk away.
How simple and easy is that?
I recently sold one of my sport planes, sold it to a cop from Oregon. Of course he asked what I did, I told him, I sell houses I don’t own to buyers I’ve never met.
He says that sounds illegal. I laughed and told him, yea it does.
That deal fell apart, but just signed an assignment with another wholesaler on a 4/1 out in the country for $37,500 It’s a 1400 SF 2 story ranch style home that sits on a 1/4 acre and had a big tree fall on it. It is worth about 120K after repairs.
I just sent it out to my buyers for 47K The bird dog got the other wholesaler to pay him $1,000 to find him a buyer and I agreed to pay him 2K for each deal, grasshopper learns fast.
See what happens, I’ve sold worse for more.
I sold this deal in less than 24 hours, most I sell in 2 hours or less. I was worried, none of my other buyers wanted it cuz it’s an hour drive out in the county and it has a friking huge tree in the roof.
I sold it for my asking price or 47K I was perfectly happy to sell it for 45 but at the last second I decided to make it 47K
Now I’m wondering if I cuda got 49 or 51. But then, Who is that guru that says “pigs get fed and hogs get slaughtered”?
I got this deal because I put a $25 ad on Craigs List for property finders.
This is some exciting s__t, what a rush to put a deal together while I’m gardening and swimming and barbequing ribs.
It’s insane.
Let’s make some Money…
Rando
It’s an interesting story on this house. 3 beginning investors purchased it for a rental.
Looks like the house has been empty for months, vandals pulling sheetrock. Somebody was pulling out the old kitchen cabinets.
Well what ever happened, this place was never rehabbed and or rented, and now this Huge tree falls into it.
It was time to bail. These 3 sellers dumped it cheap at a loss.
Somehow or other, this wholesaler named Bill gets it on contract for $30,500
Bill the wholesaler has had it on contract for 3 or 4 months. He could’t sell it.
Somehow my new bird dog Luis, finds Bill, and with the promise of $1,000 to help him sell it, Luis then sends me the deal.
My finders get $2,000
Purchase price was $30,500
Bill hands it to me for $37,500
My buyer Steve wants it at $47,000
We are getting a $16,500 assignment fee.
That breaks down to $6,000 for Bill Wholesaler 1
And the wild Bird dog Luis, gets $3,000
And keep your shorts on, Rando is running for the hills with $7,500
So it seems were going to start escrow Monday.
Now, I’m worried cuz it’s going to easy, too smooth.
Let’s make some Money
OK, I was expecting something, but not this.
Throw a sleezy wholesaler into the mix and wala, The drama and the problems begin.
From wholesaler 1
Randy
I’ve been working on this property for over 2 months. Luis agreed to 1,000 fee. I think it would be fair to 7,500 for me, 7500 for you and 1,500 for Luis. What do you think?
My reply
Luis has seen the assignment, without him we got nothin.
Let’s run it thru as its written, that’s fair, what you agreed to, full disclosure, keep your word yada yda, more deals coming, I got the buyers.
Were ready to start escrow Monday.
Holy crap, this sleezz ball wholesaler Bill cudnt sell this tree fell into it vandalized vacant hell hole for months, but now he suddenly gets greedy and wants me to cheat my bird dog so he can feel all warm and fuzzy and I don’t make more than him whaaa
I cud go on and on, but, it’s too aggravating.
.
Well now, it seems the sleezy wholesaler 1 is ready to do it as its written. Just play a little guilt trip on him and the chance of losing this deal & prospect of doing future deals he folds. Haha, he’s agreed to move forward as planned w original agreement.
Judge Judy would love this guy.
Yesterday I get the signed assignment back from the buyer. But because the other wholesalers assignment contract is different, my buyer Steve signs on the wrong line as the assignor, I sent it back to him and asked him to sign as the assignee, that was yesterday and I’m still waiting to get it back.
I’m trying to be patient, anything can go wrong, I’m just worried the buyer will wake up and see this is not a great deal and bow out.
When you have had a few deals go south on you, you soon learn not to celebrate & count the money until the fat lady sings.
However, This is a solid buyer so chances are good this deal will get wrapped up.
I asked Luis what he was going to do with his 3 Grand? He tells me he will buy a truck and go into the junk metal business.
I told him to buy a gas saver car and keep looking for more deals. :banghead.
Oh, wudnt you know it. My buyer Steve drives out to hellhole city to take a look at this property.
Yea, things were going to smooth and this property is seriously distressed.
Steve says it’s a damn disaster needing an enormous amount of rehab.
His new offer is $40,000 Which is still actually more than I thought I cud ever get for this.
I suggest to Bill we take 4K each give Luis $1,500 and run with it.
But oh no, now, Bill says his minimum is 5 Grand for me to hav buyer pay closing and I take 4 and we send $1,000 to Luis.
I cud drag this out, risk losing it all.
$4,000 is great, especially since I only spent an hour working on this deal.
It’s been a few days and my buyer hasn’t signed the assignment, I’m worried he’s flaking out even with the new lower 40K price.
I will do what I always do when my buyers don’t want one of my junkers. Advertise on Craig’s List with some creative wording.
Handyman Special 40% of Value
I have a 4/1 1400 SF Fixer, A tree fell on the house and its an old house that was never updated.
I need $42,000 and a cash buyer on this property.
The after repair value is about 120K or more and needs 30-40K in repairs, or more.
Address is 2x5xx 5 1/2 Ave Corcoran 93212
Check it out, its vacant.
Call now, wont last
This house has been a tough sell. I almost gave up after a few weeks, but then I thought, what the hell,
advertising on Craig’s List is free.
I had a handful of investors interested in it, but then they go out and look at it, and run for the hills.
I had a few houses that took a month to find a buyer, just like this one.
The other wholesaler Bill says he has it sold for 42K, that was the other day, I emailed him and told him I got a solid buyer at 37 to let me know if or when that buyer flakes.
So today Bill emails and wants to know how we wud split the $6,500 assignment. I suggested we each take 3K and give the bird dog $500, so now I’m thinking this deal cud actually happen, especially since this buyer I found says he’s ready to take it.
This house is over priced because of the repairs needed. 37K purchase price, 50-60K in rehab or more, and your to near full value.
If I can pull this off I will come back to that thought, I can sell any house.
Today Bill calls and says he don’t know what happened to his buyer that Luis also found.
He says he did renegotiate the price, so with a $9,000 assignment and $3,000 going to me, $5,500 to him and $500 to Luis.
I emailed him and suggested he chip in another 500 so Luis can make 1,000 and everybody will be happy. Well except for the 3 original investors that are losing a good 5 Grand each I estimate.
Anyways, this deal cud actually happen.
At first I tried to sell this for 2-3 weeks and nobody wanted it, a normal person wud have gave up on it. I decided to run more ads on Craig’s List and a few more weeks went by with many investors passing on it. Then I finally find a buyer and Bill tells me he has it sold for 42 or 43. I gave him my guys offer of 37 and told him to call. Lo an behold, he does.
So I’m only making 3 Grand and it took a frikin month, but imagine this, all I did was run a few ads on CL to make this 3 grand. It’s insane, fun,
I wud do it for free, even these small deals get me slobbering.
Good Job!
I sent our buyer the Assignment of contract to sign for the $9,000 assignment fee, Then I waited a few days and never got it, I sent a few txts and emails, then I decided to start up the ads again on Craig’s List for a back up.
The first wholesaler Bill is calling wanting to know the hap. Finally 4 days later the buyers signs the darn thing and emails it to me.
Then Bill tells me, its on the purchase contract that we gotta use No American Title. I tell Bill, wait, hold the phone, I used them for a few years and now they stopped doing assignments…
Now Bill says he needs to get a signed Addendum from the 3 sellers to allow us to use my Title company, and now buyers are calling wanting to know wtf is the delay.
I gave buyer some crazy story about the purchase contract specifying North American title company and wer going with a new one and we need an addendum and yada yada, it was embarrassing.
The buyer seemed a little pissed and he seen the ad renewed for the property he was buying with a higher price luckily.
I was groveling in the dirt. It’s still an easy 3 grand, just takes a little fine tuning.
But we got escrow started. This is a deal I gave up on a few times, but that nagging feeling that ther was a buyer out ther and I just needed to keep renewing my ads.
I can sell any house. Some take longer.
Its been a few weeks since my buyer Jake said he wud have funds wired to escrow the next morning. Then nothing. He wudnt respond to txts or emails or phone calls, the title girl was emailing wanting to know what was going on. I figured Jake was a flake.
I started running more ads. One buyer offered 25K I told him we got it for 28K. Hes supposed to go take another looksy this weekend.
It was frustrating, I thought about telling Jake the flake what I thought of his business practices leaving us hanging and yada yada.
But, it’s a good thing I bit the bullet and kept my mouth zipped.
The title girl emails this morning that Jake has deposited funds into title, I’m going insane here. I was gona say I worked hard getting this deal going, but all I did was place a half dozen ads on Craig’s List.
It’s only 3 Grand, but that will keep the wheels greased for a few months.
Just got the check for 3 Grand, seems like this deal took forever, it was over 2 maybe 3 months. I got some bigger deals going down. This don’t get old, even these small deals keep the lights on and me grinning. Let’s make some Frikin Money…
Rando
Positive outcome! Seemed you were taking it to the chin there for a bit.