You never know where your next lead will come from.
Got a call from a friend who I hadn't talked to in a while. He said he knew I liked to invest in real estate, so he thought of me. He told me he was talking to a friend at work who had an aunt pass away. Her house was willed to his mom. His mom didn't want the house, and didn't know what to do with it. It was beat up, and too much work to put into decent condition to list it. She just wanted to get out of it, and didn't care what she got.
He told the friend to hold on, maybe he could get some help. So he was calling me to tell me this, and I went to look at it, and it turned out to be a great condidate for a rehab. I ran comps, which were about 85,000. The house needed yard work, paint, carpet. That's it. I figured about $10,000. I told my friend I'd buy it for $50,000. He told his friend, who told his mom, and back through the grapevine came the message – “Let's get a deal done.”
In a nutshell the numbers were:
2,000 closing costs
6,000 holding costs
2,000 taxes and insurance
4,100 Sales fees
100 Dinner for my friend and his wife!
84,300 Sales Price
10,900 profit after buying my friend and his wife a nice dinner for the referral!!