Deal Case Study - Buying A Crack House

Mike DeHaan: [0:00] What is going on, guys? Welcome to today's collecting keys podcast. We have a deal case study here with Brennan Cheddick of our instant investor program. He's an investor that's been with us for about six months and has been doing some big things. If this is your first time here, my name is Mike DeHaan, and I am your typical host. And we do these episodes on Friday so that you can hear about what real real estate deals by everyday investors look like and not the inflated kind of nonsense that you hear about on so many other shows that are just highlight reels. So we are going to do a deep dive into Brandt's deal, which he has dubbed the crackhead house. And I'm very excited to hear about these because there is one thing with off market real estate that you kind of hear about, but you don't really believe until you've experienced it. And that is just the colorful nature of the human beings that you deal with when you are marketing to and trying to purchase distressed properties. So, you know, sometimes deals are easy. Sometimes they're hard. Sometimes there's just a bunch of mess in the middle. You never know what's gonna come of it, and I'm excited about this one today. So, Brandon, man,

Brendan Chetuck: [1:09] thanks for coming on the show. Yeah. Thanks for having me. Excited to be here.

Mike DeHaan: [1:12] Yeah. Absolutely. So let's dive into this one. So how does it work is we have the same questions that we ask every single time that goes through and kind of paints a picture for the property and the whole situation. So to start off on this one, what kind of property was this?

Brendan Chetuck: [1:29] Yep. Yes. So this was it's funny. I actually don't remember the exact list because this was one of my first deals. So I was using a software from somebody else's account. Right? So I don't have access to that.

Mike DeHaan: [1:40] I'm I'm

Brendan Chetuck: [1:41] pretty sure it was high equity, though.

Mike DeHaan: [1:44] Okay. High equity. And then what kind of property was it like? A single family homes? Is it like a mobile home? Saying a crack house?

Brendan Chetuck: [1:50] Who knows? Yeah. It was a it was a single family home, you know, an addition on the back. The actual house itself wasn't in terrible condition. Person on the other hand It was a little bit of a mess.

Mike DeHaan: [2:01] Little bit questionable. Cool. Alright. And how did you find this deal?

Brendan Chetuck: [2:05] So it was a SMS blast. Right? Got the list from PropStream, and, yeah, just a text message. She actually responded pretty quickly to one of our texting campaigns and just said, you know, she was thinking about selling. So we got on a call and kinda took it from there.

Mike DeHaan: [2:22] Okay. Perfect. And I think it might be self explanatory from how we introduced one, but what kind of seller was this?

Brendan Chetuck: [2:29] Yeah. She was at first, I thought she was just like a nice old lady, but as the deal progressed, things started to unwind. And, yeah, she was definitely a user of some substances and had some health issues.

Mike DeHaan: [2:45] Has health issues. Okay. Did she live there at this house, or was it like She

Brendan Chetuck: [2:49] did live there. Yep. So she lived there with her, like, family, extended family that their house just burned down. So they were living with her, but there was a bunch of them in there. So that was, yeah, that was a whole story, but she was living in the property.

Mike DeHaan: [3:04] Oh, man. It's a lot of baggage. I hate these sort of deals because the first question that always comes up is, like, well, where are these people gonna go? You know? It's like they typically aren't gonna be able to qualify for anywhere. They don't exactly have a strong support system to be able to help them out. They do need to move or find somewhere to go. So I guess we'll dive in and sort of see where that ends up with this one. So alright. So we got a questionable individual, substance abuser, living there with extended family. Let's give us the full story of the deal and what all happened here.

Brendan Chetuck: [3:36] Yeah. So I'll run through it, jump in if you have any questions or anything because it is kind of a a long timeline there. But Yeah. So we first got contact, like, mid August. Like I said, immediately, she said she was interested in selling. She had some health conditions that it was just too much property for her to take care of at the time. So, you know, we talked, got pictures from her, everything, was working on getting her an offer, and then she ghosts me for a few weeks here. Finally, she reaches back out to me, says that she was going to her sister in law's house, found her unconscious on the floor. She winds up actually being dead. Oh, jeez. Yep. Yeah. So once again, she goes to me for kinda two weeks there. Finally got back on the phone with her, got her a verbal offer, like, middle of September. Sent over the contract. She was okay with the offer. You know, she was one of those older ladies who could not work a printer. She didn't know how to open up DocuSign, so she could just not get this contract signed. Day goes by. She ghosts me again for about a month. Right? So the seventh contract, everything was good, and then she she ghosts me from there. Month goes by, she winds up calling me again. She says that she fainted, wound up going to the hospital for about three weeks. Her son had her phone for whatever reason, so she couldn't respond to any texts or anything like that.

Brendan Chetuck: [5:03] So three weeks goes by, I send her the DocuSign again. Right? Because she says she's still interested in selling. Finally, somehow she is able to work the DocuSign. She gets it signed October 2. So that was when officially got it under contract.

Mike DeHaan: [5:20] K. Yeah. So I guess at this point, you started with them in August. So you've now sent them twice, gone through this whole time as you're two months into this thing. And like the it's funny this if you're talking about how, like, fainted in the hospital, son has my phone. This is just like trap classic abuser Yeah. Sort of situation. That just doesn't make any sense. And everyone this is where a lot of, I would say, like landlords get in trouble when they have tenants that are like this because they believe them. Especially if they're like an older female or there's someone with kids and they're like, oh, they're just down on their luck. It's like, no. They're lying to you because they have a problem. But yeah. So you get it under contract, and then what transpires from here?

Brendan Chetuck: [6:00] Yeah. So I did believe her at first as well. This was my my first wholesale deal, so I was probably a little naive at that point as well. Now I would definitely be able to spot that a little bit better. But now I was working on finding a buyer, and I was working with somebody who's in one of your favorite communities, the Astro Flipper community. Nice. The the Trio community. So he was an experienced wholesaler that was going to find me a buyer.

Mike DeHaan: [6:27] Allegedly. Allegedly. Allegedly. He's never he's never wholesale deal in his life. V Literally. He's a Keegley guy.

Brendan Chetuck: [6:33] So Yeah. So he kinda strings me along for, like, two, three weeks. We wind up honestly botching a few showings. They wind up showing up at eight in the morning on a Sunday while my seller's sleeping at home without Flassy. Yeah. Without this wholesaler. So, you know, it was just a nightmare. I find out he hasn't done any deals. So eventually just kinda scrapped him altogether, and I was able to find my own buyer who we got under contract kind of, like, late October with my own buyer and kinda went separate ways with that other wholesaler there.

Mike DeHaan: [7:05] That's crazy. You know what's crazy about that whole situation too with these Keeglee clowns? In case you guys haven't heard me talk shit about the founder of that and the whole thing on every podcast that we do just because it's, for some reason, such a presence that I can't stand. They charge people a $100,000 to open those branches. And they these people have no bearing about how to operate this business or how to do deals. And I don't know where these people get the money, because I'm pretty sure most of them don't have a $100. I'm pretty sure that they have something where they, like, finance it and they make them, like, put up their house. That's probably where they get most of their actual wholesales deals they close is from members that put leverage on their primary home open a freaking Keegley franchise that they didn't get anything out of. But it's just such a joke. They always come in like they talk a big game like they're the smartest people and they freaking are trash. So if you ever hear from like a Keegley astro flipping person, just run away. Don't even bother talking to him.

Brendan Chetuck: [8:05] Agreed. Yep. Yeah. He's he said he's done a few deals. Then as we kinda got more comfortable and I already signed a JV with him, then I it comes out that he has not done one deal yet. And I'm like, oh, sweet. But he was nice enough to at least let me cancel that JV agreement. Mhmm. So he at least had some morals there. Yeah. Yeah. So I I got another contract with another buyer. Turns out there is an open roof permit for the house. Okay. The seller actually did tell me about it, but this is where it starts to get a little, you know, into the usage. She never actually paid the roofing company, so they completed it. Nice. She never paid them. So my buyer didn't want to buy it without getting a payoff that we would just take right out of escrow to pay the roofing company off this way. You know, they wouldn't slap a lien on her, the new buyer, or anything like that because they wanted the money. So, you know, we're going through. I'm working with Title. They're trying to get this payoff from this roofer. Very hard to get in touch with them. So eventually, just call the roofer. I got in touch with him, and I kinda tell him the story. And this is when the truth, I guess, started to come out.

Mike DeHaan: [9:12] K.

Brendan Chetuck: [9:12] He tells me that this seller is literally the devil in disguise, starts saying all this stuff, and I'm like, what are you talking about? I guess the sister-in-law that she found dead in the house, who was the neighbor of the roofer, she gave her bad drugs and essentially, like, you know, whatever. Getting involved in people's personal lives. Yeah. Exactly. So she gave her bad drugs. She died from it, whatever. And apparently, she took the seller of our property took the money from insurance for her roof claim, and instead of paying the roof who actually did the work, she just took it and bought a bunch of drugs. And she was doing all Oh, yeah. Drugs this whole time.

Mike DeHaan: [9:54] Hookers and cocaine right there. There we go.

Brendan Chetuck: [9:56] Yep. Exactly. It's gotten awkward. You know, this is when I was like, oh, wow. This sweet old lady is not so sweet anymore.

Mike DeHaan: [10:04] Oh my god. That's great. I mean, this is coming from your buyer. Yep. Why was your buyer even getting involved in this whole process? Did he have like a personal connection or did he just like hear about it and then suddenly have like a dilemma?

Brendan Chetuck: [10:16] So he so we were both trying to get in touch with the roofing company. And sorry, the roofer was one who is who is saying this.

Mike DeHaan: [10:22] Gotcha. Okay. Yeah. Gotcha. I thought you should buy her, that makes more sense.

Brendan Chetuck: [10:25] Yeah. Yeah. And then so we finally get the payoff, whatever. Right? Not too big of a deal, but now once again, the the truth is is coming out about some of this stuff. We get all of that worked out. There are some other additional liens on the property, some utility liens that, you know, she thought she paid. She never did. Whatever. We got all that worked out. That was just gonna come straight out of escrow. So we finally get all the paperwork out, send the paperwork to her. It was all mobile. Right? So she was gonna have a mobile notary. She finally signs all the paperwork, gets it sent back, and the title company gets the paperwork, and her ID is expired for five years. Nice. So yeah, so they can't use that. Right? So then we have to work on getting her an updated driver's license. So I'm on the phone with the DMV trying to schedule appointments for her because she can't even use, like, Google, right, to actually schedule it. Oh my god. Yeah. It's crazy. Right? So we finally get that scheduled. She gets all that taken care of. They we we send a new document where, you know, send a new mobile notary. Same thing happens. We get it signed, get it sent back to the title company. And for whatever reason, the mobile notary didn't get a witness's signature. Mhmm. So second time, right, we're going through this paperwork, and we have to redo it for a third time.

Mike DeHaan: [11:42] Oh my god. And you actually got her to go through a third time?

Brendan Chetuck: [11:45] I did. Yes. Yes.

Mike DeHaan: [11:47] Holy hell.

Brendan Chetuck: [11:47] So in between That's crazy. In between the second and third time, though, she gets a call from

Mike DeHaan: [11:53] Somebody else? Yes. Yes. Another wholesaler. Always.

Brendan Chetuck: [11:56] Yeah. I don't know how this person did it, but they knew who I was. They knew who I was assigning the contract to. They had the LLC of the buyer, the dates of the contract, how much we had under contract for, and was saying that they could pretty much beat our price by $20,000. I'm not who I said I was. You know? Like, all this stuff pretty much is trying to sweep in from under me and and take the deal. And to this day, I don't know how they had all that information. It's probably one

Mike DeHaan: [12:28] of those Keegley pricks, dude. That's what they do. Like they were trying to swoop in there because they don't do any other opportunity generation of their own.

Brendan Chetuck: [12:35] Yeah, that astro flippers coming back at me.

Mike DeHaan: [12:37] Yeah. Right. But dang, that's crazy that this was your first first wholesale deal. So you took your licks. I mean, like, I will say I'm glad that this was your first deal. Because that's the kind of shit that builds character, you know, and I really firmly believe that people that get into this business and hit like a home run right off the bat, right at the beginning, they don't do very well because that sets their basis. Whereas, like, if your first basis is just you're doing all of the hoops, you know, you're helping them get a driver's license, having to go through three different closings, you got dragged around by the first buyer, had to find another buyer. You have roofing liens. You have people that are like you know, someone died. You have, like, everything that you can possibly think of. Well, at least you think you can think of. There's always more that happened on this first deal. And from there, you're kinda like, nothing really seems like that challenging anymore when you do have one or two speed bumps along the way. So that's awesome. So what what did what was the end result of this? Like, what'd you end up making on it?

Brendan Chetuck: [13:34] Yeah. And I do agree with you a 100% with that. I think this was definitely a blessing in disguise. But so we finally I think the one plus was that I built a good rapport with her. So even though this other person was trying to backdoor us, I think she was very comfortable with me. So she decided to kinda continue on with the transaction. She winds up going to the hospital for, you know, the second time during this whole process, or a third closing had to actually be done in the hospital. Yeah. So I'm Courtney. I'm on the phone with the notary trying to find out what room she's in in the hospital. And Oh my god. But whatever. It does wind up closing. So I got it under contract for 95,000, and I assigned it to my end buyer for 102,005 $102,500.

Mike DeHaan: [14:20] There you go.

Brendan Chetuck: [14:21] And then to be honest, I bought her breakfast while she was in the hospital. I Uber Eats it to her and stuff like that. Because I just wanted to get the deal done. Yeah. So, you know, it was like just under $7,500 that I that I walked away with.

Mike DeHaan: [14:32] Yeah. I mean, hey. You got it done. You broke the wholesale, I guess, virginity there. Right? So I mean, you gotta do what you gotta do. But that's good, man. It's a crazy one. You had had all of the, like, different yeah. That's not true. I love it. Cool. So I guess from there, made a little bit of money. Did that like, once you finished that I mean, obviously, you're still doing wholesaling now. Was there like a moment of I think I'm done, or were you just like ready to go into the next one?

Brendan Chetuck: [15:01] Yeah. No. I was definitely ready to go. Love it. I think I was doing it for probably like five months before that, and this was, like, the first legitimate proof of concept. And after that, it was just kind of, you know, the rest is history, as I say.

Mike DeHaan: [15:16] Yeah. Absolutely. No. That's awesome, man. And and that is where we make our money in this business. Right? People always talk about how much wholesalers can make compared to realtors and those sort of things. Some people think it's dumb, but not very many realtors or, you know, people in general are gonna go through all the hoops that you went through to get this deal done. And, you know, not only are there challenges, but, like, you solved a lot of problems that she would have had to solve at one point or another. You know, the the situation with the roofer. Right? That was gonna come up at some point, and she needed assistance with it. With her having to get a driver's license, this is somebody that's literally not capable of solving that themselves. You know, they could make the phone call, but are they actually responsible enough to do that? Probably not. Right? Just with their their life situation, there's always gonna be a challenge. So you were able to help them out. And I'm assuming they walked away with some money as well, and you were able to get a deal done and make some money for yourself along the way. So awesome, man. Well, good stuff. If people wanted to reach out to you and potentially work with you in your market, what market are you in? And what's a good way for people to hit you up?

Brendan Chetuck: [16:16] Yeah. Yeah. So I'm in Florida, mainly Central Florida area like the Orlando market as well as Panhandle. And then I think the best place to reach out to me would be Instagram. That's b chetuk, that's b c h b t u c k, or you can just type in my name, Brendan Chetuck, and I should pop up there.

Mike DeHaan: [16:35] Awesome. Easy enough. Cool. Well, thanks so much for coming on the show, Brandon. I really appreciate it. And it's been super awesome to watch you grow. And the instant investor program, guys, you should see some of the deals that Brandon is taking down now. He had this nightmare a little while ago, but he just closed one, I guess, couple over the past week where he made his old annual salary in a week. So things can escalate very quickly. It doesn't always have to be a nightmare scenario. But anyways, Brandon, thanks so much for coming on. And you guys, you should absolutely reach out to him if you want to connect with him about doing deals in the Florida market, or you want to hear about his experience with the instant investor program, because he has come a very long way. And it's been awesome to see. So thanks for listening, everybody. Go ahead and share this with anyone who wants to hear what real real estate looks like. And, you know, if you have anyone that's kind of in the business, this is a great story to share. Because a lot of us who are in the off market world can totally relate understand to this one, because we've all been there. So share with everyone that you can. It's a great way to help us grow. And besides that, if you have a deal of your own that you want to share on a deal case study, you should hit me up at Mike and Ashore invest.

Mike DeHaan: [17:39] And I'd love to chat with you and see if you'd a good candidate. So thanks for listening, everybody. We'll talk to y'all next week.