Today I will be going to a closing for a house. I am not the seller. I am not the buyer. I am the middleman and I will only drop by the title company’s office to pick up my check. No signing stacks of forms. No spending hours pouring over contracts and initialing each page!
For years I have been extremely interested in real estate. Since we bought our first home over 5 years ago, I became somewhat obsessed with houses. Back then, we were on a budget and so many homes we looked at we fixer-uppers. But that didn’t bother me at all- I looked and saw the potential, both in the house and in the EQUITY! Ever since then, wherever I go, I always end up looking at properties. I can’t help myself.
Before Hurricane Katrina, we were looking to buy a rental. Then we had to relocate and things came up and I had other things to deal with (like a new baby, etc.). When we wanted to move back, I called a guy who advertised in the Minneapolis Craig’s List site in the real estate services section. I wanted to sell our house fast and wanted to see what he could do. His ad said he bought houses. To put it shortly, he assisted us in selling our house very quickly through a lease option agreement. (More about that in another post.) But I remember when I first met him I was very surprised to see that he was so young (mid 20s). It was then that I was compelled to get into real estate investing as soon as we moved.
And that’s what I did. As soon as we moved back, I started going to my local REIA meetings (mostly for the networking). I read some real estate investing books. I started advertising that I buy houses for cash. I lined up a hard money lender. Within one week of my first ad, I had a call. Then another. Of course, they did not all turn into deals. And I am still new and have so much to learn. But within two months of starting out, I signed my first real deal for $4000. And here’s how I did it.
1. I saw an ad for a house for sale that had major fire damage. I got the details.
2. I drove by and looked at it. I estimated what I thought it would cost to fix it, considering that I wasn’t going to do any of the work myself.
3. The house was originally advertised for $40,000 OBO. I offered $19,000. They accepted.
4. We got together and I signed the contract.
5. As soon as I got to my computer, I advertised the house for $25,000. Within one week, I had a list of 6 potential buyers.
6. The following week I assigned the contract to another buyer for $23,000.
It sounds easy. And I guess it is. BUT, I do not want to oversimplify. What would have happened if I couldn’t find a buyer? I was on a short time frame since the original contract I signed specified closing within one month. It was a bit daunting to have signed a contract to buy that house though I did not really want to be involved in a major rehab project at that time.
But that’s what I did. I got a house under contract and then turned around and immediately assigned it. And two weeks later, I did it again.
Along the way, I talked to many other investors and most have been fairly helpful. I built up a buyers list so that I have contacts for the next time I have a property to sell. I’ve met a few others who prefer to be money partners. And I am still looking at properties- still looking for the next deal. And still learning along the way.
Stumble it!