Think and Grow Rich
Think and Grow Rich
The Science of Getting Rich
The Science of Getting Rich

$14,456 Wholesale House Flip and Other Goings On

I love wholesaling houses!

$14,456.38 to be exact.

That was the net amount to us. Not bad for about 3 hours worth of work.

I’m going to be sharing the details of this recent wholesale deal as well as what we’ve been up to lately. It’s strange to think that I haven’t shared much in the way of what we’ve been doing. Especially after sharing everything we did for 34 weeks in our house flipping business a while back.

What day is it?

2013. Already?

Time certainly flies much faster when you are busy. And busy doesn’t even begin to describe Melissa and my 2012. It was more of a flash.

The joy of fatherhood was given to me again last December. Weston is now a year old and I couldn’t be happier. He is 100% boy (our first and only boy). Which is a good thing considering we have 4 girls! He is a climber and wants to scale anything he can get his hands on. Guess he likes to get altitude like his dad. :)

If we can run this business with everything we have going on, you can too.

And you thought all I did was write this blog…

In addition to family, we’ve been wrapping up 4 simultaneous rehabs and have 4 more awaiting rehab. (It’s a good thing I decided to add that up because it reminded me of a house that I’ve been forgetting. Oops! Yes, that happens.) Some were recently vacated rental houses (which is why I forgot it).

The last house we finished rehabbing is being sold after only a couple days on market and multiple offers. That’s how the one before it went as well. I hope that is a long term trend.

The deals have been mostly from my we buy houses San Antonio house buying website. A couple from probate and driving for dollars mailings and a couple were rentals that became vacant.

Leads have been pretty steady. Just today I think I had 8 leads. Probably people waiting until after the holidays to take care of their house problems. I hope that trend continues as well. :)

We are continuing to buy houses to rehab and wholesale. Birddogging has also been a good source of quick $1,000 here, $2,000 there checks. I’d like to do more wholesaling this year as it is less time consuming.

I’ve also been working on something that I’ll let you know about pretty soon. It’s something that will help a lot of people finally get off the starting line and really take off in this business. My subscribers will be the first (and will probably be the only ones) to find out about it when it’s ready. You probably should subscribe to this blog if you haven’t already. You can at the top of the main page, or on the top right side of each page, or at the end of this post. No time like the present.

Goals, Schmoals

I’m sure a lot of you have already heard everybody under the sun talking about writing your goals for the new year, so I’ll save my breath on that. You already know how important that is.

Equally important, however, is that you focus on what you are grateful for. That’s not just for Thanksgiving. Really try to make this a year that you consider often what you have and are thankful for. You get more of what you focus on, so it’s best to focus on what you’re glad you have. Why not make it a point to think about these things every morning during breakfast?

$14,456.38 Net From A Recent Wholesale House Flip

That’s a great profit for very little ‘work’. Not quite the $50,000 that another wholesale house flip made us, but I’m not going to complain.

I recently did a live (and free) webinar for my subscribers that talked more in depth about this deal. If you didn’t know about it, I’m sorry. (yet another reason to go ahead and subscribe…)

I’ll go over much of the details here for those of you that did not make it or even know about it.

Here’s a picture of the house:
wholesaled house flip before and after

Not that bad. Looks can be deceiving though.

Repairs Needed

The house needed about $25,000 in repairs. The general list of repairs needed (main items) is here:

  • Foundation Leveling
  • Convert Garage Back To Garage
  • Gut Kitchen and Both Bathrooms
  • Refinish Hardwoods and Install New Carpet and Tile
  • Replace doors and hardware
  • Install new lights, plugs and switches
  • Repair drywall and paint interior and exterior
  • Replace HVAC System
  • Repair Siding
  • Landscaping

Lead Source: Website

This lead came from my website, the one mentioned earlier in this post.

The sellers didn’t appear too motivated just from their answers to the questions on the website. For the asking price, they entered, “Make An Offer.” For the ‘least they would take’ question, they put, “You First.”

Motivated Seller?

That doesn’t really sound like a motivated seller.

The reason for selling was that it was an estate. I liked that. They also didn’t owe anything on it. I also liked that.

Even though they didn’t seem motivated, there was potential. I went to meet them at the house.

I looked the house over and didn’t really care for it. The sellers were great people though and we talked for a long time about a lot of different subjects. One of the subjects was about the house and how much of a drain it was on them, time and money-wise.

Made An Offer Anyway

Being that I didn’t really care for the house, or the neighbors’ houses (trashy neighbors – junk in the yards), the bad addition on the back of the house, the amount of repairs needed and just the number of other rehabs I already had going, I decided to offer an amount that would make sense for me. An amount that would allow us to wholesale the house. Always remember to make an offer anyway.

Offer Calculation

After Repaired Value (ARV) $130,000
65% of ARV -$84,500
Repair Estimate -$25,000
———————————————————
Maximum Allowable Offer $59,500
My Offer $43,000
Difference $16,500

So the difference between what I could have offered had I wanted to buy, fix up and retail the house, and what I offered, was $16,500. That was the amount of room I had for negotiations and for my eventual wholesale fee.

They told me they wanted to think about it and talk it over with the rest of the family. At this point, I honestly thought my competition would get this one.

It’s Not Strictly About The Money

The next day they accepted my offer! They told me they liked me so much that they didn’t even bother calling anybody else. This just goes to show you that it’s not always about how much money you are offering.

Sold

I had purchase costs of $44,491.06 (Title Policy, Doc Prep, Escrow, Insurance, Taxes) and selling costs of $1,052.56.

I ended up selling it to the second person I told about the deal. They paid $60,000 and closed within 2 weeks.

I chose to close on this one first and then resell, instead of assigning the contractor for a couple reasons.

  1. The sellers had stuff in the house and wouldn’t let me put a lockbox on it to allow others to come through. This would make it more difficult to wholesale as I would have to schedule with the sellers to bring potential buyers by the house. Of course, the buyers would have to be business associates or contractors.
  2. The spread on this one was going to be decent. Some buyers don’t like to buy when they know you are making a good profit on an assignment. This alone doesn’t really concern me much as real buyers don’t worry about how much the wholesaler is making.
  3. I was going back and forth on whether to rehab and resell it.

When all was said and done, I ended up pocketing $14,456.38.

$60,000 (final sale price) – 44,491.06 (buying costs) – $1,052.56 (selling costs) = $14,456.38.

Not bad. Gotta love wholesale deals.

Thanks for visiting the blog and reading along.

Ok, here’s your chance to subscribe. What are you waiting for?

Danny
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3 Little-Known Postcard Ideas For House Flippers

Picture of absentee owners run down house put on a postcard.

Your post card in the trash with the other mail is not doing you any good.

Wouldn’t it be nice to have a postcard that stands out in the pile of mail motivated sellers receive each and every day? Something that will make them pause and take notice. Something that will entice them to read the whole thing and really take the message to heart.

That’s the point isn’t it. For them to get the message and take action. That’s what we want.

Here are three post card ideas that are sure to do that for you. I dug them out of my old files where I keep marketing ideas.

The first two are not inventions of mine. I wish I could claim them as my own, but they were picked up over the years from some course or forum or just a conversation I had with another investor. The third one is an idea I got from other general marketing materials that I adapted to buying houses.

Not many people know about these and I’m happy to bring them out and share them.

Picture of their House Postcard

This one is absolutely guaranteed to get their attention. This is where you find vacant or really beat up houses and write down the address and take a picture of it. You then find out the owners address from the tax appraisal district (most are online – search for ‘[your county] appraisal district’). Go online to a postcard printer (vistaprint.com or similar) and create a postcard with the picture of the house for the front of the postcard and put your message on the back.

Your message can be as simple as, “Did you realize your house looked like this?” You could then go on to be empathetic and let them know that it happens to a lot of people. Let them know that you want to help. You can pay cash and buy the house as-is. Etc.

You can have the postcard company mail it directly to them after it’s printed.

When the homeowner opens their mailbox and sees a picture of a house they own, you better believe they are going to be curious. It might even darn well freak them out. That may be a problem for some people but for others it is a revelation. They may not be aware of the state of the property. Or, they may have just been ignoring it because they didn’t want to deal with the problem.

This puts the problem in the forefront of their mind and you are there with the solution to their problem. Talk about timing.

handwritten postcard for finding houses to flip

The Handwritten Postcard

This one can be done in batches for several properties or personalized for each one. It is simply a handwritten message on one side and your marketing message typed on the back with a call to action.

Just use a black sharpie marker and write a quick and simple message that will grab their attention. Some ideas are things like, ‘That problem property doesn’t have to cause you any more headaches. I want to buy it, CASH!’, ‘Don’t let those tenants take advantage of you any longer’, ‘I’ll buy your house today and pay cash for it.’

Don’t put a lot of stuff on here, just something that will make them have to take notice. Remember to keep it within 4″x6″ or 5″x7″ or whatever size of postcard you are going to use. Resizing images can cause them to look “fuzzy” and digital. You want it to look like you actually wrote the message on the card yourself.

Take your written message and scan it with the highest possible settings. Take that image and upload to the post card printer’s website. Type up your message for the back of the card and don’t forget the call to action. This is something like, ‘Be sure to call today as I am only buying a certain number of houses in the area. Call now.’

article postcard for finding flip houses

The Advertorial Postcard

I’m awfully proud of this one. This one is basically made to look like a newspaper article.

What you do to make it look like a newspaper article is type it up as 2 columns of text and have a headline at the top. Put a border around it or simulated paper tear graphics to make it look like it was torn out of the paper or cut out.

The headline should be an attention grabber that seems newsworthy. For example, ‘In a slow housing marketing, local couple buying houses fast.’ or ‘Unwanted house? Local company paying cash for houses.’

The message should be written as though you were interviewed by the newspaper. You would think this would be difficult to do. That’s what I thought. But, as soon as I got the idea for the article, the wording just flowed. Read the newspaper for examples and ideas.

If you have testimonials, be sure to include one or a couple. You can do this by stating, ‘Mr Smith happily sold his unwanted house to Danny. This is what he had to say, ‘[insert testimonial here]‘.

You could print this one at home with thin card stock. I just don’t like to recommend printing cards at home because it just takes up too much time trying to get everything right….and I always had trouble with printers getting all clogged up.

The great thing about this one is you can probably use it pretty much as-is for a press release. Check out PRWeb.com. That can be great way to have local news pick up your story.

Your Turn

Do you have any creative postcard ideas? If so, please don’t hesitate to share them in the comments below. Even if you haven’t ever used them or just thought of something, share it.

Also, the ‘like’ button up there is looking a little lonely, why not click it? Thank you.

If you are interested in more marketing ideas, here are 57 motivated seller marketing ideas.

Thanks for visiting.
Danny
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