The 3rd quarter of 2018 taught me a lot. Mostly because I got deal experience in a lot of different types of transactions.
I’d like to start by saying thank you to all the clients and partners who trusted me with their real estate. I’m honored.
These were a great couple of months, and I can honestly say that not a day of it felt like work. I’m really grateful to be doing what I’m doing.
Here are some of the highlights from the deals I did last quarter.
Fix and Flip Deals
This was my main investing focus for the quarter. I exited two flips. They were small, and I made less than 10k on each.
I made some big mistakes on both. It’s a miracle I didn’t lose money. Here are the two main lessons:
- Get a firm construction quote before you make a deal. This house ended up needing a roof after we had agreed on price. I didn’t renegotiate based on this finding. Now, I get a firm quote before I lock in on pricing.
- Assume damage from vacancy. One of the properties I flipped was vacant for over a year. This caused a number of plumbing and sewer issues that we could not have found during inspections. I learned It’s important to take vacancy time into account when I estimate rehabs.
Despite these issues I still consider those deals successful.
I bought 3 additional houses to fix-and-flip. These should be exits in Q4. Two are already listed. They should be better returns than the other two.
Two came from wholesalers and one came from MLS.
All these flips were funded through lending from other investors. Mostly private individuals.
The lender gets great returns, secured by real estate. Plus, it’s a passive investment for them. A lot of them are also interested in learning how to do a fix-and-flip project themselves.
I’ve built some great relationships this way. It also allows me to do way more deals than I could alone.
If you or someone you know would be interested in lending on fix-and-flip projects, here’s how to get access.
Brokerage Deals
I got a lot of great experience as a real estate agent this quarter. Here are some of the highlights.
Performing Portfolio
I listed a portfolio of 5 leased section 8 properties. This was the largest package I’ve sold.
It sold to a buyer who found it on Biggerpockets. I was surprised how much interest this deal drew. Investors all over the world contacted me.
But it makes sense. When you buy a performing portfolio, you get:
- Instant Diversification – If one unit goes vacant, it’s not difficult to still cover your mortgage payment.
- Access To Commercial Financing – These homes were listed at around 40k per door. Individually, they would’ve been hard to finance. Especially for out of state buyers. However, since the collective value was around 200k, It’s much easier to apply for commercial financing on the portfolio.
If you are looking to buy or sell a performing portfolio, let me know. I met a lot of investors looking for this type of deal, as well as bankers who are willing to finance them.
Flip King
Another highlight in my brokerage business was that I listed and sold 2 properties for the top house flipper in Birmingham.
This flipper will sell close to 100 flips this year. He’s been doing it for 20+ years.
There was so much to be learned from his operation. I soaked in the time getting to pick his brain about business and real estate.
I really wanted to do a top-notch job on these. It took my listing game to a new level. My marketing definitely improved, and I believe that will benefit all my clients.
I spent a good amount of time finding flip projects for other investors this quarter. It paid off. My listing pipeline is now filled with 5 more flips that’ll be listed for other investors in the next few months. They’ll all benefit from this experience.
Wholesale
I continued to work with a few wholesalers to find cash buyers for their deals. We partnered to wholesale a total of 7 houses this quarter.
I mentioned this in my last update. It’s still a small part of what I’m doing. These deals can be hard to find. But, I think it’s beneficial. Especially for my out-of-state clients.
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