Buckeye Newbie Snags Bulk Deal For $1K On Craigslist

If you have a real estate investor success story to share, please do so through
our “Contact Us” page. Thank you.

My name is Chris, and my entire life I have been an, “Outside-the-box” thinker. I grew up learning the blue-collar method to work hard and survive long enough to retire at the age of 50. In 2007, I brought my ideas of how I would like to invest in real estate to my parents, and got a stern “talkin' to”.

They said it no way it would work and if it were that easy, everybody would be doing it. You probably know someone that's been a negative influence that you wanted to prove wrong. Regardless, they did not lend me any money, nor help point me in the right direction of someone that would…

First Real Estate Investing Success:
I had sorted and re-written my goals, and really focused on the type of real estate that I needed to buy. I had looked at a copious amount of properties before I found the ones that I bought first.

The first property that I bought was actually packaged together with 4 others. I bought a – 1 bedroom, 3 – 2 bedroom houses, and a -3 bedroom house. It was fortuitous timing, as a wholesaler had just posted them to Craigslist and I was one of the first to see it and respond.

The wholesaler had put together the deal as follows: $0 down, $80K total purchase price, seller had paid insurance through the end of the year and would reimburse buyer insurance costs through the end of the year, seller had paid taxes forward through the 2nd half, one property was rented at $485/mo. There was supposed to be a second property cash flowing, but when I looked at it was vacant and needed $15,000 in repairs… The positive side of things is that we didn't have to evict a bad tenant after the acquisition.

The wholesaler had promised me that the seller was paying closing costs and unconventionally promised the seller that I was going to pay closing costs. Two of the properties were so severely damaged that insurance wouldn't cover them and it delayed closing a couple weeks. Essentially, anything that could go wrong did. But I was persistent in making this deal work for everybody. What an education.

Long story short, I had originally given the wholesaler $6K (Business Partner and a private loan) for the deal. The wholesaler ended up paying the closing costs, I renegotiated the cost of the properties to $12K each with the seller with all of the other terms staying the same. The loan servicing is $80 per month per property. I got into the properties for less than 50% market value with an amazing seller carried mortgage. The properties were cash flowing $85 per month in the positive when we first took them over, even in the horrible condition that they were in. Now they are profiting $1,700 per month. I put $1,000 of my own money and $1,000 of my business partner's money into the 1 bedroom which sold on lease-option for $60,000.

Deal Recap
We bought 5 properties at 50% market value, with $6,000 (Not out of my pocket). The total we are paying for the properties is $60,000 over 10 years (Including taxes, insurance, maintenance, management, closing costs, and debt servicing). The one bedroom house that I sold paid for the entire lot of properties. They were cash flowing from day one, providing a buffer and income until they sell.

We lease optioned 3 more of them to our tenant/buyers “as-is,” to reduce our liability, expenses, maintenance, and management costs. We held 1 property as a rental to continue to provide cash flow. We provided a service to people in the community that wouldn't be able to qualify for a traditional conventional loan. Our buyers are fixing the properties that we couldn't even get insurance on, they are holding insurance, and paying for all maintenance .

I got an infinite return on investment for the time that I spent orchestrating it. My private lender made 50% on his money in 6 months. I wonder if he's happy. My business partner is making $50,000 on the deal (A 1,250 % ROI or 125% annually). I guarantee she will be doing more deals with me in the future. The seller has the cash flow that he wouldn't have if he had kept the properties. If one of our tenant/buyers defaults, we receive our renovated property back, with the ability to rent it out or lease-option it again at a higher rate. So our, “worse-case-scenario” is our tenant/buyers following through with their agreement and providing us with over $100,000 in profit and one rental property continuing to cash flow.

How Did It Happen:
I joined a real estate investing association. I got scammed by “Mentors” and “Brokers.” But I didn't let that get me down. I educated myself with books and went to siminars, and joined fantastic programs like REIClub. And I took a more aggressive approach. I wrote my goals out (Realistic S.M.A.R.T goals), broke them down into objectives, thought creatively on how to buy real estate without my own money or credit and to attain my goals, and then did it. The most important piece of advice that I ever got was from James Smith. He said, “Your mistakes will yield you a greater rate of return than anyone else's successes.”

It helped eliminate my fears of jumping into it head first and becoming a success story. My advice to you: Hire an expert to do what you can't do. If you can't hire an expert, become one. Oh yeah, the properties that I have that are cash-flowing, I don't have to manage, I don't have to maintain, I don't pay the taxes, I didn't even have to repair them. Just cash flow without liability or expenses… so far. I am adding a house every 3 months to my collection.

Thank you REIClub.com for letting me share my story. I hope that it has challenged some of your subscribers to make that necessary step to become an investor.

>>>Oh yeah, I turn 26 in August. I think I'm going to ask my wife for a house for my birthday.<<<

Good luck investing, and I wish everyone out there the same or better success than what I have had!

Chris Harrell
Ashville, OH

To read more real estate investment success stories, please click the links below. Thanks.

We love your feedback and welcome your comments.
Please post below:

Buckeye Newbie Snags Bulk Deal For $1K On Craigslist

Are you sure you want
to log out?