2 Real Estate Investing Wholesale Deal Case Studies

You’re number one job as a real estate wholesaler is to put together the pieces of the puzzle.  You need to put together the buyer, the deal, and the financing.  Sometimes you only need one piece of that puzzle to make a deal happen.  But sometimes you need all 3.  The difference between a beginner wholesaler and an advanced wholesaler is having the ability to put together all 3 pieces when necessary.

We’ve recently sold 2 deals to an investor who is a busy professional.  He knows that now is a great time to buy properties, but he is unable to obtain traditional bank financing due to the number of properties that he owns, debt to income ratio, etc.  But he will be allowed to refinance the properties through a bank once he owns them for 6 months.  So instead of dropping the buyer because he couldn’t pay all cash, we went searching for the financing answer to see how we could Make The Deal Work.

We were able to sell him 2 properties that were “rent-ready” for $4,000 out of his pocket.  The Deals…

Deal 1: Victory Dr

We purchased this property as a foreclosure with the intention of wholesaling it.  When we didn’t sell it ‘as is’ we went to plan B which was to get it ready to rent (all the while still hoping to sell it, as our company goals do not include holding rental properties!)

Well, we did some financing homework and learned that our private lender would allow a person to assume our loan position with no problems – all he wanted to do was call a reference of our buyer and meet in person – that’s it! – no credit check, income tax returns, selling your child, or any other item that we can’t stand doing as real estate investors.

Our lender was willing to lend $20k on the property and our sales price was $28k [4BR/1BA that will rent for $750-$800 per month].  The buyer didn’t want to come out of pocket more than $4,000 so we decided that we would take the rest of our profit in the form of a note.  So he paid $4,000 down and we have a mortgage on the property for $4,000 in second position that is due within 1 year.  Since our buyer plans to refinance in 6 months, this shouldn’t be an issue.  At least we will collect an interest payment in the meantime.

Deal 2: Baltimore St

The same buyer is getting this great real estate investment rental as well.  We purchased this property as a foreclosure without even viewing the inside for $6,500.  The outside looked like it was in decent condition, so we assumed that the inside had to be at least ok.

The tenant told us that she didn’t know who to pay the rent to but that she was still willing to pay $550 per month.  After being in the property a month, she blew up on us and refused to sign our lease agreement because it was 8 pages long.  I’m sorry but come on, it’s a standard lease. We were as nice as we could be – we would have offered to go over it with her line by line if there was anything that she didn’t understand, but she wasn’t interested.  We told her that she would have to move out if she didn’t want to sign our lease.  3 days later they were gone.  I think now the reason it was foreclosed on makes sense.  I just don’t think that she was very interested in paying rent.  But it all worked out.  They got a free month and a half of accommodation and we didn’t have to file for eviction and therefore saved our time, sanity, and legal costs. Totally worth it.

We got contractor bids for the work that needed to be done to get the property rental-ready and up to Section 8 rental standards.  Renovations also include adding a 3rd bedroom inside the property which will boost the rent amount dramatically for Section 8.

Our sales price was only $14,750 and the same private lender was willing to finance this property for $22,000!  This means that we got to make all of our profit up front and our buyer doesn’t have to come out of pocket for anything, not even repairs!

The kicker on this deal is that as a part of the sale we are agreeing to get the repairs done, so we will manage the repairs and pay the contractors on behalf of the new owner.  We will actually also get a fee for this of approximately $500. This is a great service that we could provide in order to help out a busy professional and was a part of our sales contract.

Bottom Line:

Go the Extra Mile.

Get Creative.

If we didn’t do those 2 things on these deals then we might still be holding on to these properties and making interest payments.  But instead we jumped in and figured out a way to realize a profit of about $11k up front and $4k in future earnings for our company, our client gets 2 excellent real estate rentals, and…..We get to live to fight another day.

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