Rehab Real Estate Case Study
The story:
When you work with a wholesaler long enough, you begin to detect patterns in their behavior. With the wholesaler who has brought me hundreds of thousands of dollars in property (Jim), I've noticed that he brings me the best deals late in the day. I'm supposing this is because he works all day securing the deal, and make calls once he's got things tied down. I really like getting these late-in-the-day calls because I know the deal is fresh and I'm among the first called.
Anyway, Jim called me, and of course stressing the urgency of me going by to take a look because he's got other investors chomping at the bit.
He gives me the data, 2 bedrooms, 1 bath, wood frame, completely fenced, desirable tucked-away area. He estimated as-repaired value at $80K, but he needed $45K. The spread was okay. I checked the value and it sounded pretty close. I was familiar with that area and own another home nearby.
I normally steer away from 2 bedroom houses, but Jim described this huge porch that could be enclosed rather easily. Now I'm a little interested.
So, I decide to drive by. (I guard my time carefully. If it sounds like something I'll pass on, I don't even go by. That's why I use a wholesaler.)
When I get there, I realize that this property is a stone's throw away from another property I'm rehabbing. That makes me more interested because my contractor will like having a pair or properties closeby.