Wholesale #17, Tewksbury

I got two deals under contract in March/April, both originating from my driving for dollars direct mail campaigns and decided to wholesale both of them. Below are the details on the first property, and I’ll write another post for the second.  Both properties closed on April 30th.  

Wholesale #17, Tewksbury is an entry level home in an up and coming town.  The 1,318 SF, cape style house was in need of a lot of work and the layout was a bit awkward as well.  You enter into a very small room that the owners used as a family room and the kitchen is around the corner and one step up from there. Once in the kitchen, the rest of the first floor was set up as a typical cape with the dining room, living room, a bedroom toward the back of the house and a full bathroom.  All of the rooms on the first floor needed a decent amount of work, with the bathroom requiring the most.  As you make your way up the stairs, there is a small room to the left, which I figured could be converted into a bathroom and two bedrooms around the corner to the right.  The stairs and the 2nd floor hallway were down to the subfloor and the headroom on the second floor was pretty low (about 7′ at the tallest point).  There was a detached garage and a back deck that needed work as well.

Here is the projected breakdown had I decided to rehab it:

Wholesale #17 Tewksbury

 

I chose to wholesale the property because I knew it would cost me about $20,000 more to fix this property than another investor who is set up for these entry level homes.  I would likely net around $35k, which is too low for me to take on the project, so I wholesaled it to another investor for $220,000.  Since this was only a $10,000 spread and I didn’t feel that the seller would have any reservations about the fee on the HUD, I did a straight assignment of contract to the end buyer.  If you want to get your hands on the contracts that I use, they are the first two documents under the Free Downloads section HERE.

I’ve worked with the investor who purchased the property from me in the past and we’ve gotten to the point where I can give them my ARV, rehab and asking price over the phone/through email and they will sign the contract if the numbers work for them.  This type of trust, however, doesn’t happen overnight.  We’ve known each other for many years and they know I wouldn’t play with the numbers to make the deal work.  Also, they know I’m a rehabber myself so I’m not guessing at the renovation budget.

At the end of the day, I was able to get the house under contract and sold within a few hours, so it was a pretty easy deal for me and a profitable one for the buyers!

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  • Shaun Reilly

    Nice deal Justin.
    I notice you don’t have anything in there for property taxes for the 6 month hold.
    Is that a mistake or did I miss something?
    Not a huge thing but would shift the numbers a couple grand.

    • Thanks Shaun. I had to reproduce the numbers so the formula didn’t work for some reason this time. I’ve updated it for your viewing pleasure. 🙂

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