I took driving for cash to a whole new level…. JOGGING for cash!
I decided I would start running nearby neighborhoods I liked and would carry post cards with me (I use the ones that were returned from previous mail campaigns) and drop a few at each house that looks to be in bad shape.
As of late last year, I would say that I am an intermediate wholesale investor. I have successfully completed 7 deals previous to this one.
On one of my neighborhood jogging scouts, I found a house last November 2010 that had the worst possible smell you could ever imagine. There were approximately over 20 cats living inside. After running a title search I was able to find the owner and negotiate a deal under $100k cash. The owner was too sensitive about the condition of the house to hire a realtor and just let it sit. As an Investor I was able to solve her problem just by approaching her with an offer.
The property is a single family home, about 1500 sq ft, located in the Heights area of Houston, TX. Acquisition cost was $95k + closing costs (about $97k total). This is a 100% cash purchase.
I am about to complete the rehab, with less than $75k invested in fixes – and unlike many around here I am going to move in briefly, and sell in about one year (for tax purposes). This was my first rehab (I typically wholesale), and the house will more than likely appraise somewhere between $350k-400k based on comps and after repair values. I will have safely doubled my money when it comes time to sell…can't beat that!
As for rehabbing I learned some very important lessons in product and lead time management. What went wrong was timing, I am still not finished with the construction because of ordering delays, I would say if you know you need new cabinets then order them right away. A 4 week lead time for cabinets or special order parts can really slow you down.
I'll be happy to say that I've taken farming an area to a new level. Just this one house has allowed me to potentially double my investment of $175K, get in shape, and expand my investor education into the rehabbing realm.