Rinse and Repeat Real Estate Investing, Beginner’s First Deal
Dave: Hi, I’m Dave Dinkel. Today, we’re here with Mora and this is your first deal.
Mora: Yes, it is.
Dave: OK. So I want to talk about a little bit – yeah, there’s the check. That’s not how it’s supposed to work.
Mora: I know.
Dave: What was interesting about this deal, Mora didn’t know this, but another student had it under contract and he had it at too high a price. He tried to sell it wholesale in any way. I mean he couldn’t. And then coincidentally, as we gave it up and cancel the contract, you put a contract in unknowingly at the right time.
Mora: Right timing, yeah.
Dave: So typically, what we say is if you put an offer in, and you get it accepted, something is wrong.
Dave: But in this case, you put it in and you got accepted.
Dave: How much of a low list price was it?
Mora: It was $20,500 less than what it’s priced.
Dave: So when you hear these stories about it, everything I have sells at or above the list price. That’s not true.
Mora: That’s not true at all.
Dave: OK. So did you – when you saw the house, you took pictures.
Mora: Yes, I did take pictures.
Dave: And what condition was it in?
Mora: It was actually boarded up even though they rehabbed the windows. They still boarded it up because I guess because of the area.
Dave: Yeah, OK. What about the inside? Did they put in a new kitchen or did they do anything?
Mora: No. They just – cabinets, they just rehabbed the cabinet. They weren’t new at all. Nothing was new inside.
Dave: OK. So we put it out our list at your new price because you got it lower and we had a buyer for it. And how did you show the property because it was boarded up?
Mora: I asked the Realtor® for the keys and then I got it and made the appointments.
Dave: So they had a lock box.
Dave: OK. And you actually met the people who were interested in seeing it.
Dave: OK. How much of a deposit did you got from them?
Dave: OK. And your deposit was $1,000.
Mora: $1,000, yes.
Dave: So that’s the idea. If they don’t close, it doesn’t matter too much because we’re still going to make money on the deal.
Dave: But they agreed to a price. Did they stick to that price or did they …?
Mora: They did stick to it. Apparently, I probably shouldn’t say.
Dave: No go ahead.
Mora: OK. So this guy who bought it from me was responding for somebody else so he makes some more money.
Dave: Yeah. But then that happened after the first guy walked away.
Mora: That’s true, yes.
Dave: Yeah. What we are talking about is the original buyer that we had under contract decided to walk at the last minute. So our deposit was hard. His wasn’t. He was still under his inspection period in effect. So we were now stuck with what do we do? Do we close it or whatever else? And what happened is we kind of had another wholesaler come in at that time and said, “I may have a buyer for it.” And he did deliver the buyer just two days before closing, right?
Mora: It was like the last day really.
Dave: Last day, OK.
Mora: Last day.
Dave: So what he did is he marked it up $6,000.
Dave: Your profit was $7,800 or something, correct? That sound right?
Mora: Yes, $7,900.
Dave: OK. So the wholesaler that marked it up and sort of saved our stuff made almost as much as you did. But that doesn’t matter, does it?
Mora: It doesn’t really matter.
Dave: What lessons did you come away from if any of this?
Mora: Well, a lot. Since it’s my first deal, that’s a big experience for me. It’s worth having in closing. I talked to Realtors®. I had to negotiate. I had to ask for repair credit and then I couldn’t get that but it was funny.
Dave: Yeah. Sometimes you can’t remember. You got $23,000 blown off the list to start with. So we’re doing a favor too you in their mind to give it to you for that.
Dave: But I think the big benefit is you know it can be done.
Mora: Definitely. It can be done. I mean just rinse and repeat.
Dave: Yeah, exactly.
Mora: Going back at it again.
Dave: And say it again to people who might be thinking about doing it or something, you just do it. Just get in there and do it, right?
Mora: Exactly. Just spend your time during the day whether we are doing an hour or two hours, whatever time you want to spend, you just have to do it. There’s no other way around it.
Dave: What do you do full-time?
Mora: I actually work part-time.
Dave: OK. So you work part-time in this and part-time on other job.
Dave: OK. OK, guys. Thanks very much.
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