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I Made $12,000 on My Lunch Break!

by Scott Phillips   

Finding good deals really is the hardest part of this business, but sometimes, just by keeping your eyes open, one falls in your lap. That's how I found my first deal, and here's the story.

On my way back to work from my lunch break, I decided to drive through a neighborhood filled with starter homes built back in the early '70s. I made a couple turns and drove right past a house with overgrown grass, gutters and siding falling off, and a fluorescent orange "keep out" sign taped to the front door. The numbers had fallen off the mailbox, so I couldn't even get the exact address.

I went back to work, logged on to the county tax department website, and found the owner. He lived in another town but in the same state. I called information, got his number, and gave him a call. I expected to get an answering machine, since it was shortly after lunch on a weekday, but the owner answered. I love the win-win-win experience I just had.

The owner was an elderly man in bad health and he was living with his son and daughter-in-law. I introduced myself and told him that I had seen his house and asked him if anyone was living there. He said a lady had been renting it from him, but he had to evict her for not paying rent. Turns out she was a drug addict and had given him all sorts of trouble.

After talking to him for a few minutes about the house I made an offer right there on the phone. I knew the house would sell for $105,000 - $110,000 when fixed up, but it needed A LOT of work. My offer was $55,000.

He thought that was very low but said he would talk to his son and call me back. I expected to hear back from him the next day or so but, to my pleasant surprise, his son called me back before 5:00 that afternoon. He told me the same story about the bad tenant, and that his dad was in poor health, and that he had power of attorney for his father. He told me that we could meet the next day to look at the house.

Man, was it a dump! I told him I would have my contractor look at it and call him back ASAP. When I called back, I told him that I was going to change my offer to $45,000 based on my contractor's estimate that it would cost $30,000 to fix it up. He hemmed and hawed for a while and then said Okay! WOW! I wrote up the offer and faxed it to him immediately. He signed it and faxed it back that day. This guy didn't waste any time.

I called an investor that I had learned about from a friend, and he went with me to look at it. After some negotiating we settled on a price of $57,000. I assigned him the contract, and it closed in less than two weeks.

I got a check for $12,000 just for taking a detour back to work on my lunch break. I know they won't all be that easy, but what a great way to get started. Best of luck to everyone and thanks to all you veterans for some GREAT info!

 
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