Beginner Nets $50K on First Two Deals

I started educating myself about real estate investing in mid-2000, almost entirely by studying this site. I created a Sub-S corporation in June 2001 and started marketing in the local paper with "We Buy Houses" ads in July. Had a lot of calls, and finally settled on two deals. Each house was near the tail-end of the foreclosure process and I was dealing with the private party doing the foreclosing. After he took title, my company purchased the two houses simultaneously for cash in early October (via my new home-equity line). House #1: I paid $54,000 in early October, plus invested another $4,000 in rehab work (mostly carpeting, paint and minor repairs). I listed it with Help-U-Sell and sold it to the first person who looked at it. The buyer has qualified thru FHA and the loan closes on 12/28. After all my costs I will net $20,000 pre-tax. House #2: I paid $60,000, plus invested another $25,000 in rehab work. This was my first true rehab and caused me to lose much sleep. By the end of the rehab (which took about two months), I had replaced the roof, refinished 900 S.F. of oak flooring, replaced out aluminum windows for vinyl, installed new interior doors, casing, molding, fixtures, vinyl floors, counter tops, drywall work, interior/exterior paint, refinished the kitchen cabinets, new front deck, landscaping, new appliances, etc. After listing the house in early December, I have a buyer and a closing date of 1/24/02. I'll net about $30,000 pre-tax on this one. I think I'll stick with this niche for a while. I have enjoyed turning neighborhood eyesores into attractive homes that new home-buyers get really excited about. The profit isn't bad, either. Steve Bean in Oregon [Return to Menu]