The second quarter of 2018 brought a lot of changes. There was so much to be learned from the deals I did. Now, I’m taking some time to reflect on them. Hopefully other real estate investors will get some value from my deal experience.
3/1 in Midfield
I went to see this house in the pouring rain. The best time to see a potential buy! The seller was elderly and had recently moved out. There was some carpet that was halfway ripped up, but for the most part this was a very well cared for house. All the systems (HVAC, roof, water heater) were relatively new. The downside is that this house is in a “100 year” flood zone. The flood insurance was actually very cheap.
I was able to buy the house for $20,000. There was an extra “office type” room that I decided to turn into a 4th bedroom. I painted a couple rooms, and put down new carpet. Although the roof was new, there was a water flow issue that needed to be corrected. The renovations ended up costing $8,000. This was more expensive, and took longer than I had planned for. We are currently marketing it to rent for $750.
Key Lesson: I let the rehab schedule get away from me on this one. I didn’t stay on top of the project and it ended up costing me. I’ve had capital tied up on this one that should’ve been deployed elsewhere by now. Now that it is rented, I can refinance and move forward.
Wholesale deals in Centerpoint and Eastlake
I’ve never wholesaled properties before. I tried a couple times, but never closed one until this quarter. Both of these were deals someone else had for sale. When I saw them, I knew exactly who would want to buy them. I was able to connect the wholesalers to investors in exchange for a portion of their assignment fee.
It was a huge win-win. The wholesaler made a sale they might not have made otherwise. The buyer was happy because they just got a great deal on an investment property. In both cases the buyer was out-of-state, and would probably never have seen these opportunities if I hadn’t told them. And the out-of-state seller, got rid of a headache. I got a check just because I listened to what other investors wanted.
Key Lesson: I’ve decided to really double down on this part of my business. I’m partnering with Alabama Cash Deals, as well as a couple other wholesaling teams to market wholesale deals going forward. If you think you’d want to buy discounted investment properties SIGN UP HERE.There should be a pretty good flow of them going forward.
Flips in Eastlake and Forrestdale
As an advid rental property owner I didn’t really want to start flipping. I like to hold them. But banks don’t always cooperate with your wishes. Instead of battling with underwriters, I’m selling these two properties as turnkey rental properties. This means that the buyer will walk into a completely renovated, and leased rental property. These are also the first two properties I worked with private lenders on.
The Eastlake flip is already under contract for sale. It will be a great cashflow property for an out-of-state investor. He’ll be making over 15% annual returns on his investment. He’ll also get the fantastic tax benefits of rental properties.
The Forrestdale property came with a chicken. In case you were wondering why I used a picture of a chicken for this post lol. It will be hitting the market next week. It’s already receiving interest from investors looking for a turnkey real estate investment.
On the whole, these have been really great learning projects. The final details of these deals will have to wait until next quarter’s round up.
Key lesson: Having options is important. Now, after renovating a rental, I can either refinance or sell to another investor. Two exits are better than one!
Thanks for reading! Say hi to me at rob@robdrum.us or send me a text at 205-253-8756
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