The Roach House: real estate investing at it’s best.
Who said real estate investing is always pretty and clean? Let me tell you right here that wholesaling houses and investing in real estate can be a dirty job. You never know what situation you will be dealing with next! We deal with a variety of people, situations, and conditions of houses each and everyday.
One minute you may be dealing with an executive that inherited his mother’s home in a high end neighborhood and the next minute be looking at a burnout in the complete opposite part of town for $10,000.00. What they don’t teach you on flip this house is that your job is to ebb and flow with what the situation requires. This is both the exciting part of wholesaling houses and the challenging part. Preston Ely and ThanMerril discuss this from time to time.
Recently, we got a house under contract that was INFESTED with roaches. I’m not talking about a few roaches just in the kitchen. I’m talking about tens of thousands of roaches EVERYWHERE! They were on doors, tv remotes, in doors, on pictures, and in every corner you looked.
Now I have seen some bad houses in my days and this is to be expected, but this house was down NASTY.
Real Estate Investing has its challenges, and on this deal I got my fair share of challenges. We rarely ever, ever do any type of work whatsoever on any wholesale house deal, but I had no other choice on this one. The original plan was just to bomb the house for roaches. After we did, we realized we really needed to remove all the junk out of the house in order to exterminate effectively. In total we bombed 6 times over the course of six weeks. Preston Ely might have done the extermination himself, but I choose to pay my little brother to do it.
I would have sold the house right away had I priced it right from the beginning. Instead I overpriced it at $24,900.00. Preston Ely and Than Merrill both would agree that pricing your wholesale house deals correctly is at utmost importance. If you price them too low, you will be cutting yourself short. Asking too much will make them hard to sell. Becoming an advanced Real Estate Investor is learning the happy medium here. Given the ARV, the repair costs, and the desirability of the neighborhood, you arrive at your price.
In the case of the roach house, we over priced it so it took 3weeks longer than expected to sell it. We finally found a buyer for $18,000.00 and got it sold. But that’s not the end of the story. As if the tens of thousands of roaches weren’t enough of a challenge.
The buyer was over at the house after we signed the contract with them and ran into the seller there. The seller said she would sell directly to him and cut us out!
The second we found out about this, we recorded our purchase contract. We got a call from an attorney the next week instructing us to pick up our $3,000.00 check!
The moral of the story is to not over price our deals and to record your purchase contract if you get the feeling your seller may be backing out of the deal!
Stephan is a freelance writer, who often writes about wholesaling houses and real estate tips.
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