Since we are all here to learn more and become
better investors and since was are almost to
the end of 2008 we would all like to know what
was your very best deal you completed in 2008.
Details - Details - Details. :beer
Wallacehobbs - interesting question. The best things I did in 2008 were:
1 - I found this site and read the experiences of others. This helped me with my business plan/approach.
2 - I joined my local REIA and networked with local investors.
3 - I changed my exit strategy to one that got my wife excited. She is now 100% behind our REI business.
I did only one real estate transaction in 2008. I bought a 3br/2ba house at a REO auction. Paid $68.5k. ARV is approximately $124k. Estimated repairs were $15k. I am half way through the rehab and we will be able to do it for $5k to $7k. The big difference between the estimate and actuals is that my wife and I decided to do most of the work ourselves, instead of hiring it out. We will rent it - a similar house down the street is renting for $1,200. There are very few 3br/2ba houses currently for rent in the area. We should be able to rent it quickly for $1,100-$1,200.
I used a local HML for source of funds (1.5% points + 9.5% interest only for 6 months). I got a purchase price + rehab loan. I am planning to refinance as soon as I complete the rehab. I can do a rate and term and still get most of my money out of the deal because the rehab is coming in much lower than my original estimate. And by the way, the HML ordered an appraisal and it came in at $170k ARV. This tells me that my estimate for the ARV of $124k was very conservative.
So overall - 2008 was a very good year for our REI business. We are excited with it. In 2009 we want to do 4 more deals like this one. One per quarter. As long as we can continue to take most of the money out of the deals when we refinance after the rehab we can continue doing this over and over again. If for any reason we get to a point where we have to leave some of our money in the deals, we will probably have to flip few houses to rebuild our cash reserves.
j1dias Wow congratulations on your success. :beer
I think your story is very inspiring and with your
permission I would like to share it with my
network of other Real Estate Investors.
It may be the “Push” a few of them need to get
off the bench and into the game of Real Estate
Investing.
I opened a book in January that was given to me in 2005 titled ‘selling information’ by fred gleeck. It made me see that to succeed in this biz you have to manage it as a business.
I have to say that the best deal I’ve done was the the deals that I WALKED AWAY from. The reason its important is because 1 yr. ago, I would have jumped on these deals and would have lost my shirt. That was mostly due to what I learned on this site. EVERY SINGLE one of the deals I passed on were bought by someone else. These properties were back on the market within 3 - 6 months. They were so overpriced and the the “positive cashflow” numbers were way off because they left a lot of things out. Luckily I was able to see through the :bs and form a true picture.
Wallace you asked the question but you never shared your best deal… So what is it???
My best deal started in early 2007, it was my first step in building townhomes. Great project that involved 4 other investors. We bought 5 buildings and tore them down one by one to keep cashflow to pay the notes during construction and in 14 months construction was complete and all 15 units were sold. Total project took 18 months.
I put in $500K of my own money, helped in securing the 15mil HML and after we sold all 15 townhomes in a 2 months period after completion of last 2 units, I walked away with about 1.5mil profit which is great considering the real estate market everywhere.
Only downside, to many money partners were brought in to kill my potential profits in the 5mil range since other partners brought in 1-2mil of there money. But overall, an incredible learning experience and well, lots of $$$$$$$
Wallacehobbs - please feel free to share it. However I do believe that others in this site would be able to share more inspiring deals… at least they are the ones giving me inspiration… :O)
yrush2000 - congrats on a job well done. To build and sell 15 units seems like a very interesting and challenging project. Congratulations!
Here is mine. Just finishing up on the outside still planting grass.
It’s a 4 unit 2 bed/1 bath bought early September. It was boarded up and pretty rough inside. I did the work myself and saved a ton of money on the rehab. The only job I hired out was a bulldozer to rip up the driveway and move some dirt around to fix an erosion problem.
I’m so glad to be done with this one, my body is beat and needs a break, but the numbers were worth it.
Purchased for 78K
Gross rents 2000 (500 per unit)
Rehab just less than 8K
A 2 unit apartment building that I bought for 12,500 and made about 1,000 in repairs to, then sold for 32,000 in under 2 weeks.
Another interesting deal that I was part of but not my own was a client of mine who picked up a single family on 4 acres with 2 splits for 43,000.
He put the home sold the house and 2 acres for 75k, and has the other 2 acres under contract for 110,000.
not bad!
I only did one deal in 2008, but it was my first. I bought, rehabbed a SF, and sold it with it being only on the market for 1.5 months. I didn’t create great wealth with this property, but given the market, my success was selling it in a down market and not being “in the hole”. I commend all of you who took great risk this year, and those that continue to do so. It takes a lot of guts, keep it coming.