MY NEWEST DEAL BREAKDOWN
I recently purchased a new 6 plex property in Tampa, FL which I am excited about… the real gem with this property is how it came about and the process in which I made the decision to purchase.
I was minding my own business on a Monday when I received 3 cold calls back to back from the same number. On the 3rd call I decided to pick up and answer and the wholesaler proceeded to tell me about a property he had under contract that was not too far from another property I already own in the area. Hearing his story I was interested and wanted to know more about the property but I did not have my hopes up at all… I have received many calls from agents and wholesalers about deals and very rarely did they actually make sense for me.
When the wholesaler sent me the information on the deal I began my underwriting using www.dealcheck.io (which is the software application I use to help me underwrite any real estate investment opportunity). To my surprise, the deal made a lot of sense, at least preliminarily. It peaked my interest enough where I reached out to my contractor, property manager and two other trusted investors in the area to get their opinion on the property and to go see it in person for me and take pictures/videos.
After my team on the ground in Tampa reviewed the deal and went to see in person they confirmed what my initial #s suggested… I had a great deal on my hands.
The problem is the wholesaler wanted me to close on the deal by that Friday only giving me a total of 5 days to come up with the money and make the deal work. While I liked the deal, that was unrealistic and I did not feel comfortable closing that fast so I told the wholesaler I needed at least 2 more weeks. He proceeded to tell me they had another interested investor so they will be moving on for me if I did not close on that Friday. I reluctantly passed on the deal…
Monday came around and I have already moved on from the deal, in my head it just wasn’t meant to be. By mid afternoon I got a call from the wholesaler asking if I was still interested because the other buyer backed out. I told him I was but because he did not work with me originally the price I was willing to pay was going to drop an additional 50K. The wholesaler did not like this but ultimately agreed to my price.
Just by being willing to walk away on that Friday I saved myself an additional 50K on the purchase price by the following Monday.
Major Take Away’s:
Be willing to walk away from a deal if it does not feel right — by doing so in this case I ended up getting the deal for 50K cheaper.
Have cash ready to take action — I had enough cash on the sideline that I was able to act fast on a property like this. Great reminder to have capital ready to deploy.
Be an action taker — I did not intend on buying a deal at this time but the right opportunity came up and I did my due diligence and underwriting. Once that made sense I pulled the trigger and now have another property in my portfolio. Other investors will second guess or sit on the sidelines. This reminded me the importance of execution.
I hope this is helpful to you as well!
DK 💰
Comments