The real estate business avails itself of many opportunities with different types of properties located throughout the world.
Like any business, you must have goals and a business model. In our model, we focus on single-family houses as they are easy to understand and the most liquid of all real estate investments.
In our model we have four strategies on what to do with a property when we evaluate a potential opportunity:
- Buy and hold
- Rehab, manage and sell to investor
- Rehab and retail to homeowner
- Flip in “as is” condition to an investor
Today’s transaction was a flip.
Basically there are two ways to do a flip:
- Get a property under contract and assign the contract to a buyer. This is the simplest way and typically involves only a small down payment on your part.
- Sign the contract with seller and close on the property. Then market the property to a new buyer.
In today’s transaction, the property is located at 2730 Fieldstone – Conyers, GA.
Upon my visit to the property it was apparent that the comparable sales were in the $120,000 range.
The house has a pool and a great deal of stucco in terrible condition.
We didn’t want to mess with the stucco and the pool was in terrible shape. Nevertheless, this was a good opportunity, except the seller’s asking price was too high.
I determined I could wholesale the house for at least $70,000.
Thus, I needed to negotiate with a motivated out-of-town seller.
I was able to get her to accept a $50,000 cash price and I marketed the house to wholesalers one week before closing.
We had about a dozen inquiries and we sold it for $72,500. We closed on the purchase side on a Tuesday and closed on the sale of this house by the next Friday.
These types of transactions can become the norm in a hot market like Hotlanta!
The key is to get the leads, understand the model, and take action!