Well a property came up on the market as an Estate Short-Sale listed at $80,000 in a very well sought after area suburb of Philadelphia. This property was a Single Family (Row) House, 2 Bed/1 Bath/800 SqFt. It had a true market value in fixed up condition somewhere in the ball park of $135,000-$145,000.
I submitted an offer on the property for $65,000. All Cash. I was willing to buy it cash out right if I had to but I actually had 2 strategies:
1) Wholesale to another investor buyer and if that didn't work,
2) We would purchase, perform the rehab on the property and resell ourselves
My offer on the property for $65,000 was sent in the first day it became available for bids and the Estate signed off on the deal. Well it so happened that the Bank did not accept the offer due to some estate taxes due in the range of $13,000 which brought us about $4,000 short of what the bank needed to close the deal.
We were at a crossroads. We could have said oh well and walked away. But we stuck with it.
We had to have the attorney for the Estate sign off on a letter to allow us direct contact with the Bank. Then we had to negotiate with the Bank�s people to approve the deal since we were only a couple thousand off from where they needed to be. Also, they recalculated the estate taxes during that time and found they were actually lower than they expected which allowed us to come to agreement.
Well after about 4 months working with the Estate attorney, administrators for both the Estate and the Bank, we finally got the Bank to approve and sign the contract at our original offer for$65,000.
I'm actually doing a double close with the bank and then closing with end buyer immediately afterwards this month and will be taking home a profit of approx $5,000 in assignment/wholesale fees.
I network for deals and buyers, using bandit signs, internet investment sites, and direct marketing (post cards). I found a buyer from one of the internet sites we network on.
Once I had locked in price for $65,000, we started marketing this as a wholesale deal for resale at $75,000. The buyer that I found through the investment site did negotiate down from my $75,000 initial sale price. We settled on the deal for $72,000 out right.
This story is not one of a huge payout at the end, but it does show that persistence and hard work does pay off.
In the 4-month period of working on this deal, I was able to wholesale 2 other properties and closed on a rehab we completed as well. All-in-all, it has been a pretty good few months for our company. Please feel free to contact me with any further questions.