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My First 3 Deals: $80,000 Net Profit

by John D. DiPietro Santa Fe, NM   

I moved to Santa Fe, New Mexico knowing no one and nothing about the real estate market. I also knew little to nothing about creative real estate investing, although I had purchased a couple rental properties the traditional way in the past. You know, large down payment, pay market price and wait for it to appreciate.

A friend loaned me Ron LeGrand's Fast Cash book and the lease option audios. This was my first education. It took me three months to find my first deal and although it wasn't quite "by the book" I did well.

The first thing I did was refinance my two existing properties I had in Jacksonville, Florida. I found a property with two lots, half acre each, and purchased both of them for $195,000. One side had a large house and the other was vacant land. I made a deal with the broker that if he would find a buyer for the vacant lot by the closing I would buy the property.

He agreed, he found one, and we sold it for $62,500. At closing I went in with a check for $45,000, and one hour later, I left with $58,500, an immediate profit of $13,500!

Two months after closing, I put it up for sale for $199,000. The next day I had a buyer. My terms (based on what they told me they could afford) were $199,000 on lease option, $5,000 non-refundable down payment, 18 months, $1,700 per month ($1,268 PITI payment). They agreed without hesitating. By the time it closes I will have net AFTER ALL EXPENSES $42,000.

My second deal was our home. We paid $128,000 for a $136,000 FMV three-bedroom, three-bath house. We leased it back to the builder for one month, as it was a model. Our total out of pocket to buy this home after receiving the leaseback was $2,800.

My third deal is also a buy and divide. I purchased it last week for $220,000 before the Creative Real Estate Online Convention. It's two lots with a triplex on one side. The lot with the triplex has appraised for $230,000. We have it listed for 215,000 and the lot for $62,000. The projected income flow on the triplex is $2,100 per month with $1,700 PITI. My plan though is to sell it quickly.

The projected net income AFTER EXPENSES IS $38,000 (conservative estimate). When I first moved here I was told how difficult it is for a guy like me to make any kind of money in real estate investing. Property values are too high and the rent too low. I would have to hold the properties for a few years, lose money on rent and make it back on appreciation. I sure am glad I listened to them. P.S. Did I mention that I did all this WITHOUT A JOB?

 
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