Wholesaling 4 Deals From 1 Seller At The Same Time

Mike DeHaan: [0:00] Alright, guys. Welcome to today's collecting keys Friday focus episode. If you are, by chance, watching this on video, I apologize for kind of my funny setup here today. I'm currently in a Airbnb in Vancouver. And this little apartment that I'm in, it just has, like, no good spot to set up anything. Like, all the seats are right in front of these windows, and then I have the blinds closed because it's, like, right by a, like, a little walkway, and there's, like, people in cars and stuff going back the whole time. So I look a little weird today, but it's alright because most of guys listen on audio, you know, to the video. So it is what it is. But, anyways, on these Friday Focus episodes, we typically do a deep dive into some kind of topic or question that a listener had asked us about. But we're gonna start doing a on these Friday folks episodes, a little, like, breakdown of a deal that one of us has done recently for, like, in the last, you know, six months. And I did a little survey on my Instagram a couple days ago, and this was kinda who wanted to hear. They wanna hear more about, like, specifics of deals that we do. And I'm not gonna, like, go into numbers and things like that because that's really boring for audio. But kind of the story of how we found deals and how we put them together and how we found buyers and the ups and downs on that sort of stuff. So, yeah, I think it just gets creates good examples for people for what kind of things they can expect, and how to overcome some of the, you know, recurring challenges that we face in this industry.

Mike DeHaan: [1:25] And so for today, I'm gonna do, I say, the first episode of this style, and I'm going to be talking about a deal that Dan and I did with our little Spokane operation here. That's a few months ago. It was actually going on right on when we had the last Keyes Con. So I guess that was in September when everyone came up here for that because we were walking on the trail with with Cody, who's our our head of sales here. And we were trying to overcome a couple issues with the seller. But the interesting thing about this particular deal was a four property package. And so it was four individual properties that we did in, like, kind of one giant transaction with the same seller. And these situations come up occasionally. They're not super common, but they're always one that people in our scale community have a lot of questions around. Because depending on the seller, sometimes they, like, wanna literally do them in one transaction. Usually, there's, like, a pretty wide range of issues with the houses that'll be very like, there's always like, every time we've done multiple deal multiple property deals, like, there's always, like, one of them at least that is significantly nicer than the other ones, their favorite one. Right? It's always trying to figure out, well, do you have to find a buyer that's gonna buy all of them? Can you do it separate? And there's no right or wrong answer.

Mike DeHaan: [2:35] So I'm just gonna talk about what we did in this specific case and kind of how each of these unique houses came together because they all kind of had their own sort of set of, I would say, circumstances. Right? And so with these houses, basically, these properties, it was three houses and one piece of land, which happened to be next to one of the houses. And so I'll talk about that one first, because that's kind of a pretty simple one to get started with. And so one of the things that we wanted to make sure not to do was to be able to sell all three houses and get stuck with this piece of land. Because this seller wanted all the properties gone, and we didn't wanna, like, miss out on the other three because this land ended up being the deal breaker. So what we did is we basically advertised it as the house that was next to the land and the piece of land have to go together. And we negotiated our pricing in a way that that would be a good deal for somebody. And so by doing that, it kind of reduced our buyer pool because we're no longer just looking for a standard flipper, but it made it an extra enticing deal for the right buyer. And so instead of trying to figure out, you know, how are we gonna set this piece of land to be perfect, we basically said, let's find a person that, you know, wants the land and is willing to take the house as kind of like, that's what I gotta do, instead of somebody that wants to take the house and says, I guess I'll take the land because that's what I gotta do.

Mike DeHaan: [3:52] It's such a hard sell. And so we went out and we went through our buyers, and we ended up finding a buyer that their whole game plan is these one off new builds that they do. And so we've sold a lot of lots to this guy over the last number of years. And his whole business is he does these infill builds. He builds, like, you know, a decent spec home in these older neighborhoods. He likes lots where the neighborhood's already established. They have water. They have curbing. They have everything else just like this lot. And those are generally hard to find just because there's only so many of them. And so we called him and said, like, hey. We have this piece of land that you would love. Are you interested in it? And he went and drove by and said, absolutely. He said, I'll take it. And we're like, alright. Well, there's one caveat, and that you have to take the house as well. It's a package deal. You can flip the house. You can do whatever. You can just list it on the market. It doesn't matter. And he was like, yeah. You know, that's not really my game, but that's totally fine. I'll take it. So he agreed to buy the houses. And then where it got interesting with this particular one was because he's not normally a house flipper, some of the expectations around how the house is going to be coming to him were a little bit different than someone that exclusively flipped houses. Particularly around the stuff that was left in the house, which everyone that's done wholesale or or house flipping direct to seller knows how this is. Sellers always say they're gonna clean it out, and they always leave a bunch of stuffs, and also to the situation around occupancy. And to make things more tricky, this was actually the house that the seller lived in.

Mike DeHaan: [5:14] And when the original discussion came up, part of her concern was security and where she was going to move. And so what we had to do was try to figure out how to navigate the security piece with the seller, while also working with the buyer to make sure that he wasn't going to be ending up with a property that, you know, he was gonna have to evict the person or something terrible like that. Right? Or it's gonna be full of stuff. And so what we ended up doing is we actually did the transaction for these properties after the other two had closed. K? So we didn't close all four of these houses on the same day. We did the house and the land about a week and a half later. So that way the seller had money from the first two sales to be able to move into wherever they were going. So they had the capital. They were able to move. And then sure enough, what happened is we got the closing day, and the seller said, I need more time. I don't have all of my stuff out yet. And so what we wanted to get paid, we wanted to get this thing closed out. So we actually did a hold back of our assignment fee. They held it in escrow, and we didn't get paid until she was out the following Monday. K? And then one other caveat to this tale, we got to Monday. The house hadn't been cleaned out. This guy was like, hey.

Mike DeHaan: [6:20] You said the house could be cleaned out. So we ended up hiring a junk home company for $2,000 that we did out of pocket to get the house cleaned out for him. We already had our money. We did not have to do this. We did it purely because it saved the relationship. K? And so got it cleared out. He was happy as a clam. Deal's done. We got paid. I think all in all between those two properties, you made about $30. It was about something like that. Either way, lots of good challenges all around, and so that's how we got those first two done. Alright. So the next one was an interesting challenge because this house was, I would say, the worst of the bunch, particularly because it had a wacky foundation issue. So I don't remember the details about how the seller ended up owning this property. But essentially, what had happened is whoever had owned it before and lived in it had decided that it would be an amazing idea if they manually dug out the basement to turn into like a game room or something. And so literally, it's like a a movie, like a like a weird, like, kid's movie. For like twenty years, they were taking this basement out with a shovel, literally using buckets and, like, filling it up with dirt and going up the stairs and chucking it out. And they did this for decades.

Mike DeHaan: [7:31] And then, you know, they were like, well, you know, I'm compromising the house, so I'm going to add, like, rebar and all this stuff to keep the house from falling down. And it was just like some insane stuff. And then also too, like, because it's an old house, the stairway to get down was just like a freaking nightmare. It was like something you'd see out of an old horror movie where if you open the door and look down the stairway, you'd go, nope. Not going down there. Someone's gonna eat me. And the whole situation was just completely messed up. And that's not even by the time you get to, the house, which was also just a gut job. Right? And so with this one, we knew we were gonna have a hell of a time finding a buyer because the average flipper doesn't wanna deal with this. And and so we were kinda shopping it around with some of the big flippers we know, and we were getting prices that were, like, $2,030,000 dollars less than we had it under contract for, and we couldn't renegotiate it. And so we had to get out and start trying to find the perfect buyer for this. And what we ended up doing is we went through and we found all these different contractors that have been advertising, but they wanna get into flipping houses. And we found one that very specifically owned a foundation company. And so brought him to the house, fully, you know, disclosed.

Mike DeHaan: [8:37] This is the insane situation here, but this is the house for you. Like, you're the guy that can do this. Right? That can deal with this, and it'll be way less than everyone else. And he goes through, and he was like, man, this is pretty crazy. This is the price I could probably pay for it. Will you take it? And sure enough, it had about a $15,000 spread on it. So, like, absolutely, let's do it. You can buy this house. This is yours. And to make it even better, because he was a construction guy, he had a ton of cash, so there was no loans or anything. And that one actually closed pretty quick after we got it all signed around. So story on that one, crazy situation. We had to hit the pavement and find the perfect, perfect, perfect buyer. And we did that and we're able to get that one closed. Alright. And now the last property, and this is one where it's funny. Looking at it big picture, there was quite a few errors that we made, and it was a good lesson from us in general because the last house is honestly the easy house. This was like the good house. She had, like I think it was her daughter or something that lived in the house. Like, it was like a old family house. There's a lot of personal, you know, emotion and things wrapped around it. So we go to this house, and we it was like a big cool house, had a lot of character. And we were so fixated on kind of the dumpy houses that we just tried to, like, offload this one as fast as we could.

Mike DeHaan: [9:51] K? And we were like, this one will be easy one. Let's find a buyer. Let's go to our main buyers. One of them will take it sight unseen. Then And we ended up getting an offer from one of our guys that was about $5,000 less than we wanted for it. We're like, you know, he had his reason, comps, whatever, kind of a iffy neighborhood. They said, fine. We'll go through it. Take that one. Move on to the others. Focus on those. So got it assigned, like, all of them will cost these three deals. He made, like, $70. Wasn't overly concerned about it. What our buyer did with this house, and this is where our lesson comes in. So we assigned it to him. He closed on it, cleaned it out. Five days later, puts it on the market, gets an offer first day for about $60,000 more than we sold it to him for. Right? So now he made an extra, you know, after cost, $30.40 grand on top of what like, just by doing that flip. And that is money that very theoretically we should have recognized was there. We had the ability to close in this house. We had the ability to just clean it out and list it just like you did. But we were too fixated on the three other ones that were more challenging that we opted to just take the easy path of this and let it go.

Mike DeHaan: [10:55] You know? Big picture, it doesn't really matter because it's a great buyer. We have a good relationship. We sold him lots of properties. He did well for himself. You want your buyers to make money because that way they'll keep being buyers and keep coming back. But that's all the $30.40 grand that we probably could have made on this house. Should have made it a pretty sick $100,000 deal at the end of the day or pretty dang close to it. And so I think the moral of that story is when you're doing these kind of bulk deals, make sure that you are running your full numbers and you're looking at the full situation. And I know it can be, you know, when you're busy, things like that, it can make sense to take easy way. And a lot of times, we do encourage that. But if you're from a position of abundance like we were, we had a lot of deals. Honestly, there's probably a little bit of laziness there, a little bit of, like, trying to keep all the balls in the air with this deal. We just didn't dive into this one like we could've, and we could've made a lot more money. So, anyways, Al ended up. All the houses got sold. So I was stoked. She actually gave us a great review on Google, which was super cool. And we made some good money, and we had set up a bunch of good deals for our buyers as well. So all in all, it was a win win win all the way across the board.

Mike DeHaan: [11:58] Anyways, guys, hopefully, that was helpful for you. If you like this, hate this, you want more like this, or you have any other ideas, if you wanna see on the show, I would love to hear from you. So please send me a DM at Mike underscore Invests on Instagram, and let me know your thoughts. Besides that, guys, share this with everyone that you know that's interested in real estate or investing. It's the only way that we can really grow this thing you got right now that you guys with the way podcasts are. If you don't share it, people don't hear about it. So tell everyone, throw it up on your Instagram, tag us in a story saying that you're listening to the show. It really helps us out significantly more than you think. Like, we can actually see in our metrics when you guys do that. So don't be shy. Put our word out there, and we really appreciate it. Thanks for listening, everybody. Talk to you guys next time.