How to Make Over $100K on First Wholesale Real Estate Deal

TL;DR

Dedric and Krystal Polite achieved a $105,000 profit on their third real estate wholesale deal by targeting a niche list of out-of-state absentee landlords. They secured a property in a high-demand Boston neighborhood at a significantly undervalued price. Their strategic marketing and negotiation skills led to a successful double close, exemplifying the potential of real estate wholesaling.

Transcript

it's amazing that you hit a unicorn like that right out of the gates i mean with the mailer that was so little you got to just the perfect seller i mean that situation's amazing and then make a hundred a hundred thousand dollar rip on your third deal who's gonna come along every day welcome to the bigger pockets best deal ever show i'm your lovable... Read More

Key Insights

• Dedric and Krystal Polite made $105,000 on their third real estate wholesale deal.
• They targeted out-of-state absentee landlords with properties purchased before 1985.
• Their property was in a high-demand Boston neighborhood with an ARV of $1.5 million.
• The seller was unaware of the property's true value and local market conditions.
• They negotiated the purchase price to $475,000 and sold it for $580,000.
• A double close was used to finalize the transaction, minimizing risk.
• Their education and strategic marketing were crucial to their success.
• The deal encouraged them to focus more on wholesaling over flipping.

Questions & Answers

Q: How did Dedric and Krystal Polite make over $100K on a real estate deal?

Dedric and Krystal Polite made over $100K by strategically targeting a niche list of out-of-state absentee landlords in a high-demand Boston neighborhood. They secured a property significantly below market value, negotiated a purchase price of $475,000, and sold it for $580,000. Their approach involved effective marketing, negotiation, and a double closing to minimize risk.

Q: What is the significance of targeting out-of-state absentee landlords?

Targeting out-of-state absentee landlords is significant because these property owners may be unaware of local market conditions and property values. This creates an opportunity for real estate investors to acquire properties below market value. In the Polites' case, this strategy led to multiple callbacks and a highly profitable deal in a competitive Boston neighborhood.

Q: Why did the Polites choose to wholesale the Boston property instead of flipping it?

The Polites chose to wholesale the Boston property instead of flipping it due to the complexity and risk involved in managing a distant property with squatters. By wholesaling, they could quickly realize a large profit with minimal risk and capital investment. This decision aligned with their strategy to generate income for long-term investments in buy-and-hold properties.

Q: What challenges did the Polites face during the Boston deal?

The Polites faced challenges such as dealing with squatters in the property and a seller who was initially unresponsive. They overcame these obstacles by agreeing to handle the eviction process and using effective communication to reassure the seller. Their willingness to address these issues was crucial in securing the deal and achieving a successful outcome.

Q: How did education and mentorship contribute to the Polites' success?

Education and mentorship were pivotal to the Polites' success, as they invested significantly in learning about real estate investing before closing their first deal. This foundation equipped them with the knowledge and skills necessary to identify lucrative opportunities, execute effective marketing strategies, and navigate complex negotiations, ultimately leading to their profitable Boston deal.

Q: What role did marketing play in the Polites' real estate strategy?

Marketing played a crucial role in the Polites' real estate strategy by enabling them to identify and target a specific list of motivated sellers. Krystal's expertise in direct-to-seller marketing, including techniques like text messaging, cold calling, and direct mail, was instrumental in generating leads and securing profitable deals, as demonstrated by their success in the Boston transaction.

Q: How did the Polites' Boston deal impact their real estate business?

The Boston deal had a transformative impact on the Polites' real estate business by providing a substantial capital boost and reinforcing the viability of their wholesaling strategy. This success encouraged them to focus more on wholesaling, allowing for easier scaling and reduced risk compared to flipping, and facilitated their transition to full-time real estate investing and entrepreneurship.

Q: What lessons can be learned from the Polites' real estate journey?

The Polites' real estate journey teaches the importance of strategic targeting, effective negotiation, and adaptability. Their success underscores the value of education and mentorship in building a strong foundation. Additionally, their experience highlights the benefits of wholesaling, such as lower risk and capital requirements, and the potential for significant profits in real estate investing.

Summary & Key Takeaways

• Dedric and Krystal Polite's third real estate wholesale deal resulted in a $105,000 profit. They targeted a niche list of out-of-state absentee landlords, securing a Boston property significantly below its $1.5 million ARV. Their strategic approach in marketing and negotiation led to a successful double close, highlighting the potential of real estate wholesaling.

• By focusing on properties owned by absentee landlords, Dedric and Krystal Polite identified a lucrative opportunity in a highly sought-after Boston neighborhood. They negotiated a purchase price of $475,000 for a property with an ARV of $1.5 million, ultimately selling it for $580,000 and achieving a substantial profit.

• The Polites' success in wholesaling was driven by their education and strategic marketing efforts. Their deal in Boston, completed via a double close, demonstrated the advantages of wholesaling, such as lower risk and capital requirements compared to flipping. This experience influenced their decision to prioritize wholesaling in their real estate business.