We closed our sale escrow on House #21 yesterday.  The time line when exactly as planned out in my previous post.  The investor who purchased the property is on of the largest in the area and buys a lot of properties, so hopefully we can sell him a couple more.

The profit margin on this deal was not huge, we made just under 10% of the sales price, but really did not do too much, we looked at the property twice and provided the funds for 7 days.

What else is going on?

I am a little behind on posting but we have two additional deals under contract now.  House #22 and House #23.  House #22 is going to be a rental house, it is another one of those deals with some upside (it is on a big 17,000 sq ft lot).  House #23 we are trying to wholesale right now, if not we will do a small rehab and sell it.  It really does not very much work, maybe about $5,000.

We are aggressively looking to buy more as well.  The market is still incredibly hot, tons of offers on everything.

House #15 turned out great, I am going to list it on the MLS right after I finished this post.  House #17 is coming along too, they are putting the granite in right now, carpet should go in on Tuesday and we should list it by Friday and be ready for the weekend traffic.

Things are going along smoothly, we should have 5-6 rentals, with hopefully all of them rented by the end of 2009.  That give us a good start on next years goals!

As I mentioned earlier we went through our options on House #21 and came to the conclusion that we had many good options, but wholesaling it was the highest on the list.  We’ve bought eight houses in the last 6 weeks and really don’t want to have six retail properties all hit the market in a traditionally soft December/January.   Especially with the “foreclosure moratorium” ending soon (I will make another post on that to share my thoughts).

Here are the steps we took to wholesale the house:

1. Put it under contract
This house had a lot of offers and was listed way low.  We ended up getting it just over list price and we knew it was a decent deal.

2. Confirm Escrow is Open
In this market, I wanted to make sure our offer was for sure accepted before I started marketing it to people.  This would prevent them from trying to contact the listing agent or go around me.

3. Call a Couple Local Investors from my Buyers List

The longer I have been doing this, the more of the players in our market I have been meeting.  It seems like all the big guys know each other and have a good relationship.  We all use the same insurance agents, appraisers, etc.  So after making four phone calls and have a couple people look one of the people called and said he wholesaled it to an investor friend of his who wants to rent it out.

4. Open a Second Escrow (for the Sale)
We made a purchase agreement and sent it to my escrow officer.  The bank picks the escrow company for the purchase transaction, but because I am the seller, I can dictate who does escrow on the sales transaction.

5. Close Purchase Escrow
I got all my escrow instructions.  I made sure to buy a title insurance binder (it’s 10% additional fee). I have to close my escrow like a normal transaction.  I do have to use my funds to close this transaction and I cannot use the buyers funds.

6. Close Second Escrow
My purchase escrow is set to close tomorrow, so I made sure the buyers money is in the sales escrow.  I asked the escrow officer to use my title insurance binder from the purchase escrow, so it saves

7. Get the Check and be Done

House #21

We have been busy trying to get more deals on the go.

House #20

House #20 is going to be our third rental property.  It is right in our farm area and a very interesting property.  The house currently has 4 kitchens and a huge footprint, the house is over 1,900 sq ft and a big lot at almost 20,000 sq ft.  We are going to do an extensive remodel and leave only one kitchen in the main house and the kitchen in the detached garage.

This deal should cash flow no problem and be a solid property.

House #21

We are working on wholesaling this house, we have three or four buyers looking at it today and I am hoping to have it sold by the end of today or tomorrow.    It is a 3 bedroom, 2 bathroom 1,200 sq ft house that has already been half remodeled.

Not a huge update for today, we are still actively buying and I should post more tomorrow.