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| After only being in business for less than 3 months, my partner & I found a property we could wholesale on the internet. A realtor hadn't listed the property yet, and it was home that was recently inherited by 5 children. There wasn't a mortgage on the property, and the place was trashed & not maintained well at all. The seller's were asking way too much...not only for the market, but for the condition of the property. They were initially wanting to ask $165K, but we knew that for basically a "free gift" for the children that this was a very generous gift. So, my partner & I offered $120K knowing that the market value was above what they were originally asking, but the condition of the property was no where near what they were asking. Since the realtor hadn't listed the property on MLS, he knew (and so did we) that he could "double dip", and represent both the seller & the buyer. What clinched the deal for us was mentioning to the agent that if we had our contract accepted, we would use him to list the property for resale should we resell it. The seller's agreed to the $120K price after being convinced that each child would still be getting about $20+ thousand each. Since the property was really in bad shape (basically the only things solid on the house were the foundation & the windows), we decided to assign our contract to another investor who would be interested in doing the work to fix it up. Through our network that we had built through our local real estate investors club, and marketing the property online, we were able to set up a viewing of the property to a handful of investors on one day. The closing was set for just 14 days after the contract was accepted...so we had to move quickly. We found an investor who was willing to pay $129K for it. He gave us $1000 at the time we assigned the contract, because we hadn't even put an earnest money deposit down or opened escrow yet. After 14 days, the property was sold, and we got a check for the remaining $8000. We had profited $9000 in just 2 weeks, and didn't even put a penney out of our pocket into the deal. The only thing we had to do was sign our name to a contract & then assign it over to another investor. This deal really gave us confidence that we could really invest in real estate with little or no money down. It validated everything we studied & learned over the summer, and finally put into action in the fall of last year. |
| Paul Guerrero pqg30@aol.com Phoenix Apr 16, 2006 |
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