First Wholesale Deal Settled (play By Play Below)
First, I want to thank everyone for making this site what it is today. It has become an important tool in order to help me better understand wholesaling and the other niches in Real Estate. My previous RE background has been buy/fix/hold on a part-time basis over the last 11 years while working IT full-time.
I settled on my first wholesale deal on Monday, 4/26/04. I made 5K.
I found the property in Baltimore City by calling an ad in the Sunday's Washington Post. The guy was selling 6 properties. I got the list of properties, did my due diligence and drove to each property since I'm not very familiar with Baltimore City. Afterwards, I placed a contract on 1 of the properties on 3/15/04 with a $1,500 down payment. I had 45 days to close. I initially had plan to keep it has a rental because it would have rented thru Section 8 for $800 (3BR, 1BA, BSMT) and I was looking for cash flow since I was laid off from an IT job on 1/8/04. The cosmetic repairs would have been 3K.
Because of the rapport built with the seller, he calls me now about other properties that he has to sell. From one
of these calls, I put a contract on a 4 unit in Baltimore City. So then I decided to wholesale the 1st contract. I mentioned the property in my local REIA group and
one of the members were interested. We signed an assignment contract where I would get $6,500 (1,500 my
earnest dep + 5,000 assignment fee).
Since 3/15, I have assigned 2 more contracts to the same buyer from my REIA group which should close by 5/20/04.
Thanks again for everyone's input in the forums.
Linda :-D
Rock on! Good job! I hope you get many more of these kinds of deals. Keep up the good work.
Mitchell
PS Must feel nice to have some money in your pocket after getting laid off huh?
That is great, but my only concern is the $1,500 deposit you put down. Never in my life would I put more than $10 dollars...at most $100 dollars if neccessary. With a wholesale deal, you are helping the buyer, so all you are doing is putting the property under contract for 30-45 days and finding a buyer to assign it to (I know you know this, but I am just restating). The key with wholesaling is to use as little money as possible if any. 99% of the time I have just used a promissory note, especially with an investor.
Not harping on you at all, just trying to save you some pain and money in the process. But congrats are definitely in order...you're doing great.
Best,
[addsig]
Thanks SolutionKid. I put the $1,500 down because I initially had plan on keeping the property for cash flow and my private lender (not hard money lender) required me to put something into the deal. But when the 4 unit came along, I changed exit strategies to wholesale it. Wholesale was not my initial intentions.
Hey WINUINC,
Congrats my friend. I am in DC and invest in Baltimore myself....I brought 3 homes from a wholesaler in my first venture. Now I am looking to get into wholesaling myself. Lets connect and maybe you can give me a little more details about your 1st deal that could help me out.
I hope you get many more. Baltimore is what they call a Gold Mine....there is enough for everybody!!!! ;>
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Great job, you should be tremendously proud of yourself!
Great job! I was always under the impression that wholesale deals were really hard to find in the newspaper, but you have changed my mind.
Make sure you celebrate!
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Great job! Best of luck with the future deals - it sounds like you're well on your way.