[Case Study] How Edisson made $17K from a free lead! (Step by Step)
In today's case study, we are going to dive into how my Acquisition Manager, Edisson Casseus, made $17K from a FREE lead! We're going to walk through where the lead came from, how the lead was handled, and what he did to get to closing!
Usually, wholesalers avoid properties like this due to not being able to value properties in this condition, but it was a challenge we were willing to accept.
After all, this wasn't our first rodeo with properties like this, but more on that in a minute...
One of my favorite parts of being a wholesaler is being in a position daily to solve problems for the sellers we work with, while simultaneously creating a fantastic income in the process. Solving a problem was exactly what my team was able to do for the seller featured in today's case study.
How We Solved a Property Owners Burning Problem
The snapshot above is the property owners home that caught fire and burned to the ground. They were in a vulnerable position, because they did not know what to do. The owner could not list this property with a Realtor due to condition, they had no idea who to call and if they didn't act quickly the property could start to rack up violations with the city, which could get very expensive if the situation was not resolved quickly. Before we get into how we solved the sellers problem, let's first talk about the benefit of working with fire damaged properties, as these types of properties can be an amazing source of deals.
- The sellers typically have zero emotion tied to the sale of the property. Since the house is not in the condition it once was and most sellers do not want to rebuild they have no use for what remains.
- The house they once loved has now become a financial burden. If the property owner does not address the situation quickly, then they could be at risk of code violations with the city, so they want a way out fast.
- In most extreme fire damage cases like this, the Sellers have already cashed out their insurance policy, which covered the loss of the existing house, so anything they make from the sale is a bonus to them.
Due to these 3 reasons, sellers in these types of situations are typically VERY motivated to sell and are VERY flexible on price, so if you can solve their problem, you are in a position to create a win-win!
Origin of The Lead: How We Found This Seller
This property was brought to us by one of our Gig-Economy Scouts that we recruited with FlipTEAM, a marketing software that helps real estate investors automate driving for dollars and scale their businesses. Once the property was sent to our company via FlipTEAM (for free), we skip-traced the property owner within the platform (see how it works here) and then my Lead Manager contacted the owner via text within FlipTEAM.
How We Ran The Numbers On a Fire Damaged House
There are 2 major things we look for with Fire Damaged properties:
- Structural Issues
a. If stucco or block houses: Is there a visible crack wide enough that you could insert your pink into it?
b. If wood frame: are the floor beams in tact
- Did the flames reach the roof (mainly checking the integrity of the trusses)?
If the answer is no to either of the top 2 issues, then it's safe to say the property mainly has minimal fire and smoke damage, so you can contract it around 40-50% of the properties After Repaired Value. If either of the 2 issues mentioned previously were affected, like our example in the photo at the top of this article, then we would need to contract it at 30% of ARV or less, like we did.
How We Brought This Deal to Closing
Once my Lead Manager submitted this lead, my Acquisition Manager Edisson then contacted this seller and within a week of going back and forth, put the property under contract. We then sold the house to one of the investors on our list and made a cool $17,000, and all within 30 days! Isn't that amazing?
4 People stood to benefit from this transaction:
- Our Gig-Economy Scout: She made $500, just for driving around, finding a property and referring it to our company. Not bad for an hour or less of her time.
- Our Seller: They were able to net an additional $38K from a property they were already compensated for through insurance, so this helped them get back on their feet after suffering such a terrible loss.
- Our Company: We made a healthy profit by solving someone else's problem
- Our Investor Buyer: He was able to buy an opportunity from us that will allow him to renovate, flip and put food on the table for his family .
Now, I am quite confident that if it were not for FlipTEAM we would not have found this seller, because the seller was not on ANY list at this point. Now, you might say, but Chris wouldn't this be on a fire damaged list with the county? The answer is no, because the property had literally just caught fire, the reports are updated monthly and we actually got this lead before it could have appeared on any list; that is the magic behind FlipTEAM! Helping Real Estate Investors attract motivated sellers and get to the deal before the competition is why we do what we do at FlipTEAM. As a side note, it was also pretty cool to see how many people benefited from this transaction as well.
P.S. By the way, if you would like to get deals like this too, then download my FREE Gig-Economy Script that will show you how to grow and deploy your own team of scouts, sidestep the competition and attract all the motivated sellers you could ever need. You can download it here: https://instantdealsecrets.com/gig-economy-script
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