Entering the holiday season
It really has hit me these last few days, with the leaves turning bright yellow, and the cool, crisp air that cuts through the sweatshirt you thought would be warm enough. Thanksgiving is around the corner, and unfortunately this year I will not be able to spend it with my family. This is because business is booming, and with school stacked on top, it is just not a good time. But, business is booming!
About 3 months ago my real estate investment company purchased an investment property in a very good neighborhood, great freeway access and close to both uptown and downtown business centers. Comps in the area have been pushing $240,000 and we will probably list for $229,500 for a quick and easy sale. We were able to purchase the property for $160,000 and are within our budget of $30,000. This puts our total investment (minus personal time investments) at $190,000 and $40,000 profit for 3 months work is adequate while I am in school. We are having our open house next weekend (weekend before Thanksgiving) and fully expect to receive multiple offers. While this deal wraps up, I have just had my first offer on a short sale accepted.
This is great, haven't graduated from college yet, and already purchasing my second house! This particular house is in an even better location, but is in way worse condition (minimum repairs $50,000 not including any additions) and is only a two bedroom one bath. The problem with 2/1 houses is that there is much less demand for these properties and we generally try to stick with 3 bedroom, 2 bathroom houses. I found this property by simply driving around my "farm" area and spotting a vacant, old, run-down house. This was in July, and since then I have contacted the owners, got the authority to speak with the bank about their ensuing foreclosure. Here it is, middle of November and my offer of 78% of the current appraisal value was accepted.
With this short sale we just acquired, our exit strategy is simple. Get out before any physical work begins! We will market the property to other investors who have the capability of expanding the house to a 3/2, leaving from $50-$80,000 profit in the approximated After Repaired Value (ARV). We are able to pull about $20,000 for finding, negotiating, and networking the deal to someone else. This is what you would call "wholesaling," and is one of the quickest ways to build capital within a real estate investment property.
It will be a very merry Christmas this year, because both of these deals will have cashed in, and I will get to go back and spend some time with my family! With the financial goals I set for myself, these are simply secondary goals, as my true goals are in having ample time to spend with whom I want when I want and for how long I want. Money is just the means to that end.
About 3 months ago my real estate investment company purchased an investment property in a very good neighborhood, great freeway access and close to both uptown and downtown business centers. Comps in the area have been pushing $240,000 and we will probably list for $229,500 for a quick and easy sale. We were able to purchase the property for $160,000 and are within our budget of $30,000. This puts our total investment (minus personal time investments) at $190,000 and $40,000 profit for 3 months work is adequate while I am in school. We are having our open house next weekend (weekend before Thanksgiving) and fully expect to receive multiple offers. While this deal wraps up, I have just had my first offer on a short sale accepted.
This is great, haven't graduated from college yet, and already purchasing my second house! This particular house is in an even better location, but is in way worse condition (minimum repairs $50,000 not including any additions) and is only a two bedroom one bath. The problem with 2/1 houses is that there is much less demand for these properties and we generally try to stick with 3 bedroom, 2 bathroom houses. I found this property by simply driving around my "farm" area and spotting a vacant, old, run-down house. This was in July, and since then I have contacted the owners, got the authority to speak with the bank about their ensuing foreclosure. Here it is, middle of November and my offer of 78% of the current appraisal value was accepted.
With this short sale we just acquired, our exit strategy is simple. Get out before any physical work begins! We will market the property to other investors who have the capability of expanding the house to a 3/2, leaving from $50-$80,000 profit in the approximated After Repaired Value (ARV). We are able to pull about $20,000 for finding, negotiating, and networking the deal to someone else. This is what you would call "wholesaling," and is one of the quickest ways to build capital within a real estate investment property.
It will be a very merry Christmas this year, because both of these deals will have cashed in, and I will get to go back and spend some time with my family! With the financial goals I set for myself, these are simply secondary goals, as my true goals are in having ample time to spend with whom I want when I want and for how long I want. Money is just the means to that end.
posted by Miles at 9:56 PM
0 Comments:
Post a Comment
<< Home