I’ve finally gone from dreamer to believer. I just made my first profit from wholesaling a property. It was a bit of an emotional roller coaster, with sky high hopes in the beginning, to dark doubt in the middle, to a modest but very real profit in the end.
A mortgage lender I network with told me of a farmhouse on some acreage that had problem tenants and a fed-up landlord. She wanted out, so I called her and long story short I tied up this fixer-upper with an assignable contract. The tenants were still in place and I knew it’d be a while before they got out. I started bringing potential investors by the property and we’d get as close a look as possible. Despite the tenants filthy lifestyle, they were good enough to let my investors have a look-see. The place looked phenominal from the road but as you got closer it needed more and more work, and most decided to walk. At first I was trying to get a ridiculous (in hind sight) fee of $30,000. I actually thought I’d pull it off. Closing date was approaching and I began lowering my price as I started to get nervous. I’d gotten an early verbal commitment from the first person I’d showed it to (a Realtor friend of mine) that he’d buy the contract for ten grand, so I had that in my back pocket. With the tenants still in place at the property, I took off to Mexico for three weeks and basically left the deal in the Realtor’s hands, (my buddy’s). If the tenants vacated while I was away, the ten day inspection contingency was to begin and he’d have to get his inspection. Sure enough, halfway through my trip they moved out, and without my knowing it or being around for it, the fuse was lit. The Realtor didn’t want to spend the money on an inspection (he usually uses me: I’m an inspector), so he took his DAD out instead and they poked and prodded. When I pulled back into town, there was one day left on the contingency, and my buddy decided he DIDN’T want the place! I was about to be F*%&#D. I could barely standing the thought of losing my earnest money ($1500) or having to actually close on this place. I called back every investor I knew and told them there was a FIRE SALE on the contract for one tenth of my original price: $3000! One that hadn’t been out to see the place yet said they’d rush right out, and lo and behold they kept their word. They were there one hour later, took a look around, brought their own Realtor, liked what they saw, and said they’d take it.
We arranged for me to rescind my offer, get my $1500 back from the title co. and they’d pay me a $3K finder’s fee when their offer was accepted. I held my breath for about a week. I called the investor’s man who came out, rattled him about my money, and three days later it was in my mailbox. A little time on my part, a little bit more stress than I’m used to, but hey: It was my first creative real estate deal and in the end I feel like I made $3000 out of thin air. I didn’t buy any courses on how to do it, I just started reading and got super psyched about the possibilities. I feel like I’ve shattered the glass barrier that separated me for so long from those who actually DO this stuff. I’m onto my second deal now… you can jump over to the “Commercial/Mobile Homes” forum and read about it under “Storage Condos.” I’ll let you know how it pans out.
Thanks to this website for helping me shatter the glass.
Nice job bnelson,
It sounds like you go one of the hard ones out of the way early. Not too many as tough as the deal you described.
I love to hear stories like this. You deserve to be succesful and you are well on your way!
Go Get’em!
Ray - Indiana
Good job on the deal!
Keep at it and get better.
Im new to wholesaling so I will have a story to tell hopefully soon
Thanks, you guys. You know, when the deal had first “closed” I was kind of licking my wounds, because it was somewhat laborious and stressful. But now looking back, I can see pretty objectively what I could’ve done better to make it faster, smoother for everyone involved, and more satisfying.
Lesson #1: Check your greed at the door. Big profits will come with experience, but I need not try to retire off the first couple deals I do.
Thanks again for your words.
B-
Your absolutely right, check the greed at the door. If the deal is worth doing, there has to be enough meat on the bone for everyone!
I have been wholesaling for a while now, and am currently involved with homes in over 30 states. From experience I can tell you that greedy investors don’t tend to last very long and more times than not are not successful.
But don’t be too hard on yourself, many times a lack of experience will create a little defensiveness, which can lead to a little greed. Not because the investor is greedy at heart, but too much on the defensive. You are the one in control, there are thousands of properties and one you, there are thousands of deals out there that benefit everyone involved, find those and you will make more money than you ever imagined.
Go Get’em!
Ray Rochefort
Managing Member
Purpose Investments LLC
Indiana
Congratulations :party:
Great job!
I am also new here and also looking forward to share my experience.
I have learned so much by just reading posts here.
So thank you!
Angela.
Congratulations on your first deal, Keep the momentum going. I’m still working towards mine. My goal is my first deal by the end of the year.
Good luck, Spokaneinvestor! Just last weekend I listened to “Radio Real Estate” – a one-hour program up here in Bellingham hosted by a Realtor Mike Kent. His guest was an appraiser turned speaker who educates about appraisal fraud and the impact it can have on a local economy. His focus was on a case in Spokane, if I remember right, and it sounds like the situation has led to hundreds of foreclosures in that area. The program isn’t archived anywhere I know of, but the fact that there may be that many foreclosures in that area can be profitable for us investors, I imagine.
To listen to some Radio Real Estate shows that have been archived, click this link, and happy investing:
http://www.birchbayrealestate.com/realaudio/radio01.html
I really needed that inspiration right now…that just got me re-motivated
That is awesome to hear! I am in the process of trying to flip my first deal as well. I just bought my first rehab project. A wholesaler tried to flip it to me but they were wanting way too much and we ended up initially walking away from the deal. However, I have read so much material and I remember it saying always try and follow up. So I followed up and find out she wasn’t able to sale the house and her contract expired. So I found the address and looked up the owner and got the house for $10,000 less than what she was asking. I wanted to include her in the deal and give her around 2000-3000k because she had worked on the deal but she wouldn’t budge. Anyways I have several investors who will just pay a finder’s fee rather than buying a assignable contract. Of course these are people I trust and will continue to gain especially if I bring them great deals. I am inspired to see that someone normal has made a wholesale deal.
WOW… This is great news. I’m new to this stuff also and now you got me psyched. Gotta get wet to go swimming. But make sure you know how to swim so you don’t drown out there.