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Video: Investment Property Wholesale Deal

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As you may or may not know, my primary investment strategy is to buy distressed properties, fix them up, refinance them, and hold them for several years.  Although I’ve done a few flips, it is a little too risky for my blood.  That said, I just watched a video that might have changed my mind a little!  It’s about a guy named Michael Jake who does a ‘wholesale deal’ on a fixer upper, and we actually get to see the distressed property! (see video at the bottom of this post)

The very ugly investment property shown in the video is a 2 bedroom rancher, and he found it online (of course, someone could have stumbled onto it while simply driving by as well).  It was part of an estate sale, but looked similar to pretty much all foreclosure or REO properties you might find.  The property was formerly a rental property that had simply degraded over time.  Yes, it was in really poor shape!

The house was listed for $75K (down from $89K). From the online listing, he called the listing agent to get the details, and stopped by to look at the property (without the rental property agent being present:  he simply peeked into the windows and scoped the outside areas).  He then made an all-cash offer of $50K, and the sellers countered at $60K. But thanks to solid real estate negotiation skills, he was able to ultimately secure the property for the original $50K offer by pointing out all the necessary repairs as well as the recent comps in the area. And the fact that he was willing to pretty much close immediately didn’t hurt either!

During the tour, Michael explained his plan, if he were to hold onto the property, would be to pretty much gut the place, repaint, re-carpet, install new fixtures, new cabinets, new windows, new bathrooms (which he said could be done for roughly $1,500), etc.  But for this deal, he contacted his network of investors prior to closing, and because of that once he closed he basically had an immediate buyer.

At the end of the day, for about 3 hours of his time, he made a profit of $9,000.  Pretty sweet!

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