Discover how Laura made $60,000 on a multifamily wholesale flip. You’ll learn the challenges she ran into and exactly how she did it!
Laura’s 6 Unit Multifamily Wholesale Flip
Laura contracted to purchased a 6 unit multifamily property for $400,000. It was built in 1963 and considered a Class C property but it only really needed some very minor cosmetic updates because the owner had taken good care of the property. Meanwhile, during the due diligence phase, Laura located a buyer willing to pay $479,000 for it. This process is referred to as wholesaling and is a superb way to make money with multifamily even if you don’t have the down payment or the ability to get a loan to buy the property. In total, Laura’s deal took 5 months from start to finish and her net profit was about $60,000.
MultiFamily Due Diligence
A fundamental key to multifamily wholesale flips is performing detailed due diligence. This includes inspecting the building yourself as well as hiring a professional property inspector too. Furthermore, you need to determine the building and location class, crimes rates, employment trends and much more. This is also a great time to work out your exit strategy, which for Laura, was to flip the property to another buyer.
Multifamily Cosmetic Updates
In order to maximize the resale value of the property, Laura made a few very minor cosmetic updates, all with the permission of the owner. Here is what she did…
Interior Paint Touch Ups: Laura had the lobby walls and stair railing painted.
Lobby Door Repaired: She also had the window grate on the main entrance door repaired and painted.
Mailbox Holder: She added in a mail holder in the lobby because all the mail kept ending up on the floor.
Window Condensation: Condensation on windows can appear to be indicate a major window issue. But in this case, a simple patching of dry wall with mud and paint sealed it up and solved the problem.
New Sump Pump: Laura successfully negotiated with the seller for him to install a new sump pump for one of the apartment units, saving her $1,200 but solving a significant problem in one of the units.
These were incredibly simple and quick updates but they made a big impression on anyone looking to purchase the property.
3 Multifamily Wholesale Flip Lessons
Here are 3 lessons Laura learned from wholesaling this multifamily property:
#1: Target Motivated Sellers
The Seller of this property was highly motivated to get rid of the property because he had some serious tax issues and needed to close quickly. When you connect with motivated sellers, you put yourself in a much better position to structure a good deal.
#2: You Get What You Negotiate
In real estate, you only get what you negotiate. Laura negotiated seller financing which allowed her to become the owner, briefly, without requiring any of her own money. Even though she had a new buyer locked in, by closing for even a short period of time, she was able to maintain complete control over the deal.
#3: Small Updates Can Have Huge Impacts
The property Laura invested in was able to be quickly fixed up with a simple interior paint job and improvements.
Secret to Laura’s Multifamily Wholesaling Flip Success
Laura, like most beginners, struggle with many different facets of multifamily wholesaling; including distinguishing a good deal from a bad deal, negotiating with the seller, structuring the deal with little or no money, finding a buyer and of course, closing the deal. While there are plenty of helpful resources available on this website and through our YouTube channel, the most important details of a deal cannot be explained simply by an article, book or video. You need someone by your side to teach you exactly what to do for that particular deal. Laura’s secret to success was being mentored by our team of advisors. She had a world class mentoring team in her corner to walk her through what to do, every step of the way. If you want to make a ton of money doing your own multifamily wholesaling flip, join our Protege Program.
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