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$23,000 Profit in Less Than 30 Days

by Harold McCadden, Binghamton, NY   

In January, I saw an ad in the paper for a 4-family house that read: 4-FAMILY. MUST SELL. $15,000 CASH!! I called the out-of-state number and asked a lot of probing questions and found out they owned the house free and clear, were in desperate need of fast cash, and just wanted to dump the place for cash as fast as they could.

I drove by the place that day and assessed its worth at around $50k without ever going inside. I called the owners back and told them I would be willing to pay $10k cash for the house in two payments:. $500 for the first payment and the balance of $9,500 in 60 days. They immediately agreed.

I had one problem though--I did not have $500 to give them for the down payment. We set up closing on the first of the following month, and I was able to give them the $500 down payment from the $1,350 worth of rent received that morning. So, at closing I walked away with about $600 cash after adjustments.

The same day, I inquired about the property and struck a deal with the sellers. I placed and ad in the paper to sell it for $40k with nothing down. I sold it to the first person who looked at it.

I now had about a month to sell the paper I was going to create. I found a buyer for the note who was willing to give me $33k for the $40k note. I then turned around and called the people I bought the property from and asked them to discount the balance I owed them if I paid them off in 30 days and not 60. They agreed to to take $9,000 instead of the $9,500 I owed them. So in essence I got my down payment back.

I closed the deal within 30 days with the new buyer, and the people I bought from, as well as the people buying the note, and I realized a profit of about $23,000 after all expenses. Not bad for my first creative real estate deal. And it took less than 30 days.

[Editor's Note: This was a three-way simultaneous close. Harold bought and resold the property and also sold the $40,000 note he created all at the same time.]

 
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