Dean Graziosi presents a short "Deal of the Month" video describing a foreclosure (REO) two-family property he bought for $60,000, immediately cleaned and rehabbed, then refinanced about 45 days later for $190,000 to pull out cash for renovations. He reports taking $30,000 for repairs, tenants now cover the mortgage, and that he effectively extracted roughly $100,000 in equity while keeping the property cash-flowing; he uses the example to illustrate using other people’s money, shopping lenders to avoid "seasoning" rules, and staying active in foreclosure investing. The clip also references his broader programs (Instant Equity Exchange, Automated Foreclosure Finder) and his intent to keep doing deals to stay grounded.
Chapters
Hey, this is Dean. And welcome back to Deal of the Month. Where every month I just highlight really quick, within three to ten minutes deals that I've done in the past or current deals. You know, there's a little house behind me, not the prettiest house in the world. They're in the process of cleaning it up right now. And they just did vinyl siding on a couple of sides. I got to pressure wash the front. But I'm here to let you know that I don't pass up any deals. You know, I'm fortunate that I, I do tens of millions of dollars in sales on a regular basis. This year, all my companies combined, I'm probably going to do over 70 million in sales. But I still buy a $60,000 foreclosure when I have to because I don't pass up any deal. Plus it keeps me grounded, it keeps me grounded on what's going on right now. You know, if I worry about 60 million dollar a year problems, how can I worry about what it was like when I lived in a trailer park? Or when I was broke as a kid trying to figure out that first deal with no money down? Or how when I was living off credit cards and didn't have any money to invest, I had to figure out, out of desperation to buy property with no money down. So I never stop. And I want you to know right now I probably have 15 to 20 deals in the works, all ranging from 20,000 to millions and millions of dollar projects all together. And that just gives me such a wide variety. I want to share with you and keep you current at what works right now. So today I want to talk about this little deal behind me. This is a foreclosure, actually went all the way through the foreclosure process and the bank owned it, which is an reo. The property I knew was worth much more, but the property was in terrible shape. It looks a little tough now, but you could imagine when I bought it it looked horrible, but the skeleton was good. And it's a two family approved house, so all I had to do was fix it up. So long story short, I bought the property for $60,000. As soon as I bought it, we went in and cleaned it up immediately. Just the first pass cleaning just to make it look nice. And I immediately went back for another loan. Now even myself, I have great credit, credit score, close to 800 money in the bank, but I still will use as much other people's money as I possibly can. So I went to a local bank here that I'VE used forever, and I was denied because of a term called seasoning. Some banks require that you have to own a property for a certain amount of time before you refinance it. And it's called seasoning. Well, a good mortgage broker and I teach this in other areas. It's not all going to happen on this tape today, but a good mortgage broker will shop multiple banks with different requirements. So as soon as that happened, I went to a mortgage broker and friend that I use here and said, find me a bank that doesn't care about seasoning. And literally, we refinance, or I refinance me and my friend, the broker, when I say we refinanced this within about 45 days for $190,000. So I paid 60, refinanced for 190. I took $30,000, did the place over. The inside looks beautiful. Now we're working on the outside. The other thing is, now I have two renters in there, and those rents are paying the mortgage. So. So every month, my tenants are building my net worth by paying off the mortgage. And someday, if I keep this forever and it's paid off, all that money's mine. Or when the market goes back up, which is kind of my strategy right now, I'm buying as much property as I can that breaks even or cash flows. And when the market goes back up, I'll sell this and I'll make a significant profit on it. But you have to realize I already made, I already pulled $100,000 in equity and got to put that in my pocket just on this little unattractive white building here just to finish up. I just want to let you know that I still do deals like this. I never pass up deals like this. We're working on two more foreclosures right now. I mean, this is the time when you're watching this, this is the time to make money with foreclosures. Paid 60,000, pulled $100,000 out, put 30 grand into it, and my tenants are still paying all the mortgage right now on the property. What's the downside of that? And, you know, when the market goes up, I sell it. So, you know, me doing these keeps me in touch with what happens right now. I know that if you were watching this a year ago, the no money strategies were different. Banks were giving out 100% financing a year ago. They're not now. You know, there was more people with equity in their home to do some seller financing. They aren't now. So I get to know what's going on right now. Our new programs, like our Instant Equity Exchange, our Automated Foreclosure Finder program, those programs work right now, and that's why I continue to do it. I love real estate. Hope you love it. And I'll see you next month.
