Dave Clabeaux Real Estate | David Clabeaux - My New Deal: Buy for 27k, Sell for 149k

I have a great new deal that I am working on with one of my partners.
 
Here are the details:
 
-We have a house under contract to purchase for $27,000.  We close in 7 more days.
 
-We got the house for pennies on the dollar. It needs work, and the seller needs money fast.
 
-It needs about $60,000 in repairs.  We will have a hard money lender I have previously worked with finance the entire amount.
 
-We have a contractor lined up to handle the entire project. We won’t need to lift a finger.
 
-I already have all the materials, finishes, and paint colors chosen.  I use the same ones for every project. All I need to do is email the list to the contractor.
 
-The rehab should take about 6 weeks.
 
-We will be able to sell the house fast for $149,000.
 
-After all commissions, carrying costs, etc, we should clear right around $48,000 profit.
 
Remember, you have to TAKE ACTION in order to make money in real estate. Most people do not take action, and therefore never reap the financial rewards.

My Life As a House Flipper

If you are like me, you have probably watched dozens of house flipping shows on HGTV.
 
You typically see an attractive female in charge of a flip, swinging a sledge hammer, getting her hands dirty helping demo the property.
 
This seems to be a bit of a stretch from reality for two reasons:
 
1.  As the person flipping the house, I give orders, and just about never use a tool or assist in any way.
 
2. My construction sites are typically lacking in attractive females ;)
 
All jokes aside, this is what my typical day as a house flipper looks like:
 
8 am: Check email to see of one of my team members has sent me a property. If the property looks good, set up a showing.
 
10 am: Hit the gym (not as often as I should)
 
11 am: Swing buy any active projects and make sure project is moving forward.
 
12 pm: Grab lunch. Kale salad with arugula sprouts and salmon.  (Also not very often. Basically never. In fact, I don’t even know if arugula sprouts is a real thing.)
 
1 pm: Go to any potential new showings.  
 
2 pm: Calls with partners
 
4 pm: Family time or personal time.
 
Keep in mind, when I first started and was flipping just 1 house at a time, I kept my day job and only spend about 4 hours a week working on that 1 project. That’s about all it takes on average.
 
Are you ready to start flipping houses?

Off-Market Deals by Dave Clabeaux

Let me share a story with you:

It's 3:48 pm on a Thursday.

The phone rings.  It's a woman who lives in a nearby town who needs to sell her house quickly.

The taxes haven't been paid in 3 years and the County is going to foreclose in less than a week.

She owes $40k in back taxes and her house is worth $140k.

If the county takes the house, it will be sold at auction and the county keeps ALL the money.

Some counties keep the "overages" made at auction.  In other words, when a property sells for more than the taxes owed, the county keeps the extra money.  

The previous owner gets nothing.

Given the speed that our team would have to close on this deal, we offered her $90k.

She had two options:

1. Let it go to foreclosure and get nothing.

OR

2. Sell it for $90k and walk away with some cash.

Here are how the numbers work out:

As-is property value = $140k

Offer price = $90k

Projected profit before closing costs = $50k

These deals are called "off-market" deals.  Time is of the essence and the owners have no time

to list their house with a broker.  

As a result, you have little to no competition and you can find properties for pennies on the dollar.

Here a few other examples of off-market deals:

Dave Clabeaux

Dave Clabeaux

Finding off-market deals is smart.  You get a house with enormous amounts of automatic equity.

You can find off-market deals on classified listings, FSBO sites, by posting bandit signs, online marketing campaigns, and networking connections.

If you're looking to do your first deal, an off-market deal may be a good option. Because there is so much built in equity, lending is typically not an obstacle.

Plus, you have plenty of room for any surprises or mistakes.