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$27,500 Profit from a Vacant House

by Ruth Kilchenman, Louisville, KY   

I've been visiting CRE Online for about a year now, and I can't tell you how motivating it is to me. Last year, we finally decided to take the plunge and buy our first real estate investment.

I called on an "investment property" ad and the seller was asking $40,000 for his home that was about to be foreclosed upon. We met with the Realtor and offered $32,000, figuring resale would be about $60,000. The seller agreed to take $34,000, which is what he owed.

We made the mistake a lot of newbies make, which is to overdo the improvements. Our buyer's VA appraiser cut the value to $54,000. After all was said and done, we only made about $7,500 on the first deal. We learned a lot, though, and gained some courage to do our second deal.

Our second deal was offered to us through a friend who knew of a woman whose house had been vacant for about six months. The woman had moved to another city. She was having a hard time making the payments, but had kept them current.

I called her and offered to buy her home "subject to" the existing financing. I only knew about this from reading articles on this website. She agreed to my offer. The market value of the house was about $85,000. She owed $55,000 on the first mortgage and $5,000 on a second.

The house only needed to be cleaned up and painted. I sold it to another friend for $85,000, paid $1,500 of her closing costs and left the closing table with a check for $27,500! This is great! Thanks for your website. It is helping me live my long-time dream of being a real estate investor.

 
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