[3-Part Video Series] How I Made $22,500 Before We Sold…By Just Bringing Coffee
OK, here are the numbers:
- The ARV (after repair value) was $180,000
- The 70% Rule was $126,000
- The CORE (cost of repairs estimate) were $60,000
- My MAO (maximum allowed offer) was $66,000
I did sell it for $180,000...but I bought the house for $81,000...
This was $15,000 OVER my MAO.
Yes, OVER!
How could I do it you may ask???
I could do it because I had a sweet deal with my contractor...and I had an even sweeter deal going with my banker.
So here’s why I did it:
Here's how I did it:
Even better, with no money of my own, I got a bank loan for $107,000 and actually had the money in hand BEFORE we sold.
So I literally bought that coffee with the profit I had already made BEFORE I sold it!
Here's how you can do it too:
Middleborough Part 1 | When To Break The 70% Rule
Hey, guys. It's Mike, with House Flipping School. Welcome to this week's whiteboard lesson. We were recently talking about a property we picked up in Middleborough, Massachusetts. Now I want to go ahead and breakdown the numbers to show you how we arrived at the purchase price for this particular deal.
How to Find your First House to Flip
Ryan: Hey, everyone. Ryan, here from House Flipping School. I'm with Mike. One thing that we get a lot of emails about is new investors wondering how to go about finding their first house to flip. Mike, today I want you to pretend like I'm a new investor; I'm looking to get into this. Let's talk about your most recent flip, and particularly how you went about finding this house to flip.
Middleborough Part 1 | how to buy “ugly” properties
Ryan: Hey, everybody. We're here talking with Mike about a recent deal that will be closing in about 40 days. Mike, I know you did some renovations on this property. Walk us through the rehab process, in particular, apply it to somebody who's just getting into this as a new investor.
Onset Part 3 | The 70% rule with real numbers
Ryan: I'm back with Mike, and we're talking about the onset property which you picked up for $65,000, $20,000 of which went to the wholesale fee, which is not typical from what we're learning here. Now, Mike, how did you know when you got into this deal for $65,000, that at the end you were going to come out on top and make a profit?
Mike: That's a great question, Ryan, and I really wanted to know that myself. This is actually my first deal with this particular wholesaler who is very experienced; and like I mentioned earlier, I tried to see if he would take $60,000. He was pretty quick to say no which meant he had other investors that were lined up to buy it at that price. I learned right there that we were not going to negotiate much, and I definitely wasn't going to find out how much money he was making on this deal.