Wholesale #18, Reading

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. See HERE for the first property. Below are the details on the second property that closed on April 30th.

Wholesale #18, Reading was a 1,344 SF Cape style house in a very hot town. When I say hot, I mean most houses sell for over asking price!  This property is located in a great neighborhood with moderately sized homes. I was actually going to take this project on myself because there was a potential to tear the house down and build new. However, the style and size of this home is quite desirable so I felt a rehab would be best. There was an almost identical house on the other side of the neighborhood under contract for $480,000 and it had an outdated kitchen. Based on that, I was comfortable that the completed project could sell for $500,000-$515,000. This house needed a lot of work, but was actually fairly clean on the inside.

Here is the projected breakdown had I decided to rehab:

 

Wholesale #18 Reading

Similar to the last wholesale deal, my cost to rehab this house would have been about $20k-$30k more than the number above. I wholesaled this deal to the same investor who bought my last deal. They rehab a lot of properties and can get much better labor and material pricing because they keep multiple crews constantly busy and they buy so much material.  Also, because I got this property for such a great deal, I preferred to make ~$45k now rather than a potential $80k in 5-6 months after the renovation.

One of the best things about sending out a lot of direct mail is that I can really cherry pick the deals that I want to take on and wholesale the others.  Also, with my direct mail business keeping me pretty busy lately, I’m happy to take the wholesale fee and not have to manage crews.

I wholesaled this for $330,000 and decided to do a double closing because I suspected that the seller may question the large wholesale fee and the fact that my company is not on the HUD statement. When I double close a property, I ask that my buyers use my attorney so that I can use their funds to close the buy side of the deal. By doing it this way, I don’t have to come to the table with any money. At the end of the day, after paying closing costs, fees and taxes, I netted $44,113.06.

So between the 2 deals I closed on April 30th, I made a total of $54,113.06.  Not a bad way to end the month!

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