After closing on the sale of The Poor House two days ago, today we closed on the sale of The Neighbor House…you can see the detailed financial results below…

This was supposed to be a quick wholesale deal to another investor (i.e., no rehab work on our part), but it ultimately took nearly two months. We found buyers for the property relatively quickly (two investors looking to try their first flip), but they had some issues with their financing. Their first loan fell apart due to some issues with the way their broker was charging fees, and their second loan dragged out for several weeks before they realized there was an issue. It turns out that they had applied for a non-owner-occupant investor loan, which is essentially a loan for a rental property. Given this was a flip project, the lender wasn’t happy about the fact that the house needed so many repairs, and the loan pretty much stalled.

Earlier this week, the investors decided to pay cash instead of trying to get the loan, and we closed this afternoon.

Had I known they were attempting to get a “rental property” loan, I would have advised them several weeks ago to go the cash route…trying to get typical investor loans for flip properties is always a long and difficult process. The worst part is that due to the long delay waiting for their financing, the buyers have pushed out starting the rehab, and have likely pushed the listing of the property out to near the end of the tax credit period (April 30), which will make it much harder to sell the property. I hope that’s not the case, but certainly come May 1, it’s going to be tougher to find buyers.

Here are more detailed breakdowns of our final schedules and financial results for this wholesale project…

Timelines

The total holding time on this house was 53 days. Had the buyers paid cash upfront instead of trying to get financing, it would have been closer to 20 days, which is what I originally had expected. It was a good lesson learned about ensuring wholesale buyers have their financing in order.

Here are the key timeline milestones:

  • Purchase Offer Date: 12/19/2009
  • Purchase Closing Date: 1/25/2010
  • Rehab Completion Date: 1/25/2010
  • Sale Listing Date: 1/26/2010
  • First Sale Contract Date: 2/16/2010
  • Final Sale Contract Date: 2/16/2010
  • Sale Closing Date: 3/19/2010

Financials

This was a pretty standard wholesale deal in terms of profit for us, though as mentioned above, it took longer than expected to complete the deal.

Here is the breakdown of financials for this project:


Poor House Financials

Our ROI on this project was 41% and our annualized ROI was about 286%.

Final Statistics

Here are just some of the final statistics that I’ve been tracking for all my projects, and that summarize the success/failure of each project pretty well:

  • From Offer to Purchase Time: 46 Days
  • Rehab Time: 0 Days
  • Selling Days on Market: 21 Days
  • Selling Close Time: 31 Days
  • Total Hold Time (Close to Close): 53 Days
  • Total Profit: $6,864.66
  • Return on Investment (ROI): 41.53%
  • Annualized ROI: 286.00%

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House #17: Officially Ours

March 17, 2010

We closed on the purchase of The Escher House today… Okay, we almost closed — as usual, the seller (the bank) hadn’t yet signed all the closing docs, so we’re waiting for that to get completed, at which point we will officially own the house…hopefully by Thursday morning…
We’ve spent the past week getting bids [...]

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House #13: Final Analysis

March 15, 2010

We closed on the sale of The Poor House today…you can see the detailed schedule and financial results below…
For a large rehab, this project was pretty textbook; we completely replaced the exterior (new roof, gutters, siding, trim, soffit, fascia, decks, etc), remediated a good bit of mold, waterproofed the foundation, finished the basement, and did [...]

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House #17: Before Pictures

March 11, 2010

As promised, here are some before pictures of The Escher House:
BEFORE PICTURES
Unfortunately, I was in a rush to get these, and I don’t think they really capture the craziness of the layout. That said, while the layout is unorthodox, we actually think it’s appealing and will help sell the house once it’s been rehabbed.

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3 Appraisals, 1 Day

March 10, 2010

So much for taking off on a mini-vacation yesterday…
Turns out that all three properties that we have under contract to sell had an appraisal yesterday, and two of them were last-minute, meaning we didn’t have much time to prepare and we had to stick around to meet with the appraisers…
We knew the appraisal for the [...]

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Mobile Home Update

March 7, 2010

We’ve had a bunch of stuff going on with our mobile home investments over the past two months, but I haven’t had much time to write about our progress, issues, and current status…so here goes:
Mobile Home #1
Our very first mobile home purchase took a turn for the worse last month when our buyer (who we [...]

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House #17: Inspection Results

March 5, 2010

We had our pre-purchase inspection of The Escher House yesterday, and it looks like we didn’t miss anything in terms of repairs or condition of the property…
The biggest concern I had was a crack in one of the poured foundation walls, and since my inspector is also a structural engineer, I was confident that he [...]

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House #17: The Escher House

March 4, 2010

We just put House #17 under contract yesterday…
It’s a bank-owned foreclosure right just about a mile from my personal residence. It’s a 22 year-old house, and to be honest, I have no idea how to describe the style. It’s a traditional, but also has some characteristics of a split level. Half of [...]

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Traits of a Great Agent

March 3, 2010

As a follow-up to last week’s article on “Should You Get Your Real Estate License,” here is this week’s blog post over at BiggerPockets.com:
Traits of a Great Real Estate Agent
Take a look and feel free to leave comments either here or there…
Enjoy!

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House #13: Appraisal

March 2, 2010

The appraisal for The Poor House came back at our contract price, so assuming no financing surprises, it looks like we’ll be going to closing on this one in the next two weeks…
That said, we almost didn’t get a high-enough appraisal, and it was all my fault. As I mentioned in my article last [...]

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