Jesus Gabriel Mendez walks through a Dallas wholesale flip that netted $30,000 profit. He bought the house for $84,500, contracted it to an investor at $120,000, and spent $35 on Facebook ads to generate the leads that made it happen.
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This is a deal that we're going to make $30,000, and in this video I'm going to be breaking down the step-by-step process on how I got the lead, how I underwrote the property, what are the comps that I use, how I found a buyer, and all of the above. Pretty much an A through Z blueprint on how we close this deal for a $30,000 profit. Now I am at the property. We're not doing it too virtually this time because this is in Dallas, but normally you can do this from anywhere, and how I do most of my deals, like around 80%, are virtual. Now let's go into the property. But as you can see from the outside, it's not that bad. It's a brick property, single-family home, 3-bed, 2-bath, cookie cutter, exactly what investors are looking for. And that's why this is such a good deal. So you can see from the landscaping, it's not too bad. It definitely needs some work. These staircases also need some work. It's not the most level, but there are no foundational problems with the property, which is a good thing. It helps out with the numbers because that can run you very, very expensive. So you can see we got the lockbox on the property and a spider that, um, we need to get out of the way. So let's walk in, take a look. And it does have an interesting smell, I will tell you that. Kind of smells like mold, but for all we know, there is not a mold issue. As you can see, obviously the basic cosmetic stuff— we're going to need new windows, new doors, painting, a couple of chips on the walls. Obviously, that's cosmetic stuff. You got the flooring that needs some help. All this stuff, which I don't know what you call it, it's like a siding of the connection between the floor and the walls. Obviously, the kitchen needs some work. This thing is pretty rough. It looks like they were cooking some crack in here, which is exactly what we're looking for when we get these ugly properties. Yeah, all of this needs to be replaced. Now, I'm not a contractor. I'm not a flipper. I'm not a professional at any of these trades except air conditioning, which I don't practice on a day-to-day basis. So that's the only thing I can really give accurate numbers on. And as you, for the wholesaler, when you're talking to investors, when you're talking to sellers, you want to have a cushion with your numbers. You never want to say, oh, the windows are going to cost $3,251, because that's just not realistic, right? The prices change not only from whatever state that you're wholesaling from, but also who's going to be doing the work, what is the labor going to cost. So we always want to have a good cushion as far as us running the numbers on properties. All of this needs to be fixed up. And depending on the comps in the area and what the investor wants it to look like, for what price specifically he wants to sell at, he's going to have to pretty much copy and paste what's selling around here. And as you can see, you have this like, I don't even know what you would call it, a sunroom, but there's no windows for the sun to come in. And let's take a look at the backyard. From the outside, nothing crazy. We have a barn that could probably be turned into another bedroom if they extended this out, which they should be able to if the Dallas, uh, permitting. So you can see from the outside, it's not that bad. Landscaping obviously needs some work, as I've told you before. I don't know if they're going to keep that or update it, but the outside, obviously paint The roof is in good condition, obviously the windows as I mentioned before, making sure everything's leveled out to make sure no foundational issues do come up in the future. And that's all on the investor side. All we care about is getting that good deal under contract, making sure the numbers make sense, making sure that the seller's expectation of our part of the process is set in stone and clear. Because you will face a lot of issues if the expectation is not set the right way, saying you can close sooner than you can, saying you can offer a price that you clearly can't just to get a deal under contract. And that is not what we did on here. We actually— our MAO, our maximum allowable offer, if you've wholesaled a property before, or if you're just learning about it, that's the way we run numbers. That's the way we underwrite deals. As far as this one, I believe our MAO was around $95,000 and we offered clearly below that to try to get a bigger deal as possible. So we got under contract at $84,500. As far as our investor sale price, what we tried to sell it to an investor for or pitch it at, or, you know, shout it out at was $120,000. We thought that was pretty conservative, not too crazy of a spread. It is around what, $40,000, but we ended up settling at $30,000. And that's again, why I tell you, you need a cushion for these deals. You need a cushion in your numbers because let's say an investor came back at $100,000. We only got it at $84,000, but because we got it at $84,000, that's already what, $15,000, maybe a little bit more. So you want to make sure you have cushion on your deals. And I'm not saying, hey, don't do deals that are $5,000, $4,000, but you're going to have more problems with those. And for the same amount of work, if not more work on the smaller deals, you could be making way more money. This deal was less work than some $3,000 deals, $5,000 deals, $10,000 deals that I've closed in these past couple months. And this one was for $30,000, less work. Obviously we had some title issues, but that's to come. You can't have the good without the bad. As you can see, they got a nice little entryway, um, for whatever car they have. My car is definitely not fitting in here. I was going to pull it in through there, but I don't want to have to buy a new bumper. But yeah, the outside looks nothing too bad. It could be worse. The HVAC is in good condition. You could probably keep that for another 10 years, and we got that from the pictures, which we actually got from the homeowner. So Another thing that you guys ask about all the time, as far as through social media and the comment section of my YouTube videos, how do we get pictures? How do we handle inspections? You don't need to go out to the property, especially if you're doing this virtually, as I am with 99% of the properties that I do close. This one just happens to be in Dallas, so I was able to come and get pictures, but we already had pictures from the homeowners. So you always want to ask on the discovery call— the discovery call is the first conversation you have with the seller— hey, could you send over pictures? Did the tenants that are living in the property, are they able to send pictures? When's the last time you checked out the property? Could you go check out the property and take pictures? Because that's going to help you a lot when underwriting getting the numbers on the deal to make sure that, hey, you're able to go into contract at a good price and sell it for a profit. The neighborhood is not that bad. It could be worse. You see, it's mostly a family neighborhood, a lot of immigrants. It's not, you know, a hood hood, but it's definitely not the best area. But this is still good for a cookie-cutter flip like the one that we're selling on here. Yeah, obviously the leveling is cool. Everything on the outside is not that bad. Now, as far as how we found the buyer, So for this one specifically, this one sold quick. We got this one under contract, if I'm not wrong, on a Friday. Oof. We got this one under contract on a Friday, and then we were able to get it assigned the next day on a Saturday. We had 2 buyers walk by, and the first one that offered, he offered $110,000, I believe, and then we got him up to $115,000. The other one was around $105,000, Obviously, that's a $10,000 difference, but the first buyer was eager to sign the contract. He was eager to put in the EMD. He had a good track record. We actually found him from InvestorBase. I'm not getting paid to say that, but that's how we found the buyer. And yeah, he was eager to go. He was serious. Whenever we called him, he was ready to go. He was asking all the good questions. He had a good track record. He came to look at the property ASAP, like literally 2 hours after we called him about it. He came to look at it, do his inspection, bring his contractor out. He said, hey, I want it, let's sign, what do we have to do, what's in the way? And that's what we signed with him because he was quick, efficient, and ready to go. As far as all the majors on this property, like I said, foundation, plumbing, electrical, obviously the cosmetic side of things. You're going to need to add some light fixtures, some, um, maybe switch out an electrical box. But as far as all the majors, they're all pretty much taken care of on this property. They're all working. Depending on the investor, if he wants to go all out, maybe increase his rehab budget a little bit more than what he's supposed to do, he can, but he doesn't have to. And that's why he wanted it so badly because it's a good fucking deal. If you have a good deal under contract, you get it at the right price, everybody's going to want it. A good deal sells itself. A lot of you guys ask, again, in the DMs, "How do I find a buyer? I've had 7 deals under contract and nobody wants to buy my deal, Jay. What's going on, man? I'm going crazy. I think I'm going to quit wholesaling and go work a 9 to 5." You need to get a good deal under contract. A good deal will sell itself. A good deal is an investment opportunity. If your investment opportunity sucks and nobody's going to make money from it, and it's going to take more work than the profit that comes with that work, nobody's going to want the deal, right? So don't go out there locking up properties at a price that doesn't make sense. Don't go out there promising stuff that you can't complete on. Make sure the deal makes sense. And if it doesn't, move on. Keep them as a follow-up until they come to realistic expectations of what their property is worth. Obviously you can see windows, paint, flooring, light fixtures, all the good stuff that is needed on this property as far as the cosmetic side. You can see one bedroom over here, one bedroom over here, bathroom, closet, another bathroom over there, and another bedroom. Not the nicest property, not the worst property, but this is exactly what we're looking for. The property was nice, you wouldn't make $30,000 off of it. So make sure you look at those ugly houses and you see an opportunity because because if you don't, you might be missing out on some money. So let me give you the breakdown of the deal. Here on the screen we have the DISPO package, which is the package of information that we send over to the real estate investor, pretty much serving the investment opportunity on a platter with all the information that he's going to need so we're not wasting time back and forth. As you can see, in the beginning we have the front of the property, we have a call to action with my contact information and my name, we have the address which was removed, 3 bed, 2 bath, 1,000 square feet, right under 7,300 square feet for the lot. The asking price was $120,000. Resale value, the ARV, after repair value, what the property is going to be worth after the property is sold and fixed up, around $215,000. Again, these are not dead set numbers. It all depends on the investor and what he's going to spend on the property and what he's going to profit from it. So you have a rent and cash flow estimate from $1,600 to $1,750 on this specific deal. An estimated fix and flip profit between $40,000 and $45,000, obviously depending on the investor's rehab budget. It is vacant on lockbox. You have a drive with all the property pictures and videos of the inside and outside. Here you have some comps of the area. One property about a month ago sold for $225,000. One is pending right now for $200,000. This one— I believe both of these are actually smaller than our subject property, so ours is going to sell for a little bit more, I believe. As far as the repairs, again, where we don't want to be specific because we're not contractors, we're not the tradesmen that are actually going to be doing the work, so we don't know exactly how much it's going to be, but we give them an estimate. Between $45,000 and $50,000. Mid-repair work, kitchen floors, full repaint, minor sheetrock repair, as I showed you in the video. And this is a description that we put to every single disco package to the buyers so they don't mess up and do anything, um, without us telling them in the beginning, right, to avoid it. Do all due diligence before you submit an offer. No due diligence period on their end, aka we don't give them an option period. Closing with seller's title company, our title company. And do not post the deal anywhere online, please. And then another call to action for them to reach out and give their offer. As far as this deal, where it came from, let me give you the breakdown. This campaign from Facebook generated us 11 leads at an average cost of $35 per lead. A lead is somebody that's interested to sell their property, come through our funnel, and then we reach out to them. So a total amount spent of $389 was spent on the campaign of ads. We got 2 contracts from that. So 11 leads, $389 spent, 2 contracts, 2 properties put under contract. So that puts our cost per contract at $194.50. Pretty good. And then our cost per close is at $389. So we got 2 contracts from that specific campaign. Uh, the other deal we haven't closed yet. That's why I'm not talking about it. And that's why the numbers are dead set as they are right now. Now, if you like this type of video, you like the content, you like how consistent I'm being, like, comment, subscribe, put something in the comment section. Say say, Jay, you're the GOAT. But yeah, if you guys want to learn from me one-on-one to close your first wholesale deal, click that first link down below in the description. I'll help you close that first deal on an average time of 45 to 55 days. Obviously some people take longer, some people a little bit less, but we will close a deal. I will work with you until you do. Now as far as if you want me to run your Facebook ads, you want to scale your wholesale business, you want to get inbound leads, click that second link in the description. And yeah, like, comment, subscribe. I'll see you in the next video.
