Nathan Payne bought a house for $275K, spent $25-30K on rehab, and sold it for $505K, netting $145K profit in three to four months. Clean-up and professional photography added $10-15K to the sale price. He financed the deal through HELOCs, private money, and hard-money lenders, emphasizing that cheap capital and strategic improvements drive flip margins.
About that.
You did this fix and flip deal, broke over $100,000, didn't it?
Yeah, I think it was $145,000 profit. The check was $197,000, which we didn't make that. Obviously got expenses, but when we got that check, we were like, this is awesome. This is cool. This is cool. Yeah, for sure.
So what was that like? You did, you did a fix and flip. Let's talk the numbers high level.
So you're buy, rehab, and we got it at $275,000.
Okay.
I think we put in like $30,000, $25,000.
So not that big a rehab.
Really didn't because, you know, we were able to get— I feel like the work we got was pretty reasonable. We put a brand new deck on the front. The deck was kind of falling off in the front. We put a brand new deck, carpet, paint, redid the kitchen.
New cabinets or just counters or what?
The cabinets were pretty new at that point. Just the countertops before were a little older.
Did you paint them? Paint the cabinets?
We didn't.
Okay, just countertops.
So I wouldn't say it was like this crazy rehab, but it was definitely more than we've ever done. And yeah, and it got more, we listed it for $490,000, And we got an offer at $515,000. The house was built in 1911. It was like—
Old house.
Old house. So they came back and they said, hey, there's some things cosmetically you guys did a good job, but there were some issues. So we gave them a little bit of a deal. I think we ended up selling at $505,000. But so $15K above list price. And, uh, you can ask for a better deal though. No, no. Yeah, it was awesome.
And end to end, how long did that deal take from buy to resell?
So this one was a little interesting because in order to get it, the seller wanted to stay stay in it for a month after we closed on it. So, we gave him a post-possession. So, we let him stay in there for a month. He moved all his stuff out. Had a lot of trash. So, that took some time to clean it out. But I think end to end, maybe like 3 or 4 months. Yeah.
So, pretty fast.
Yeah, it was pretty quick.
To make $145,000.
Yeah, it was pretty dang nice, yeah.
So, this is the lesson, guys. Don't wholesale your home run deals.
I guarantee you we would have made like less than half of $145,000 on our wholesale deal, because they would have beat us up. The sellers, the buyers, the flippers would have been like, look how trashy it is, or look at all this. But when, the thing that's been awesome for us too is just cleaning it out almost gets you like $10,000 or $15,000 more, just to make it look nice.
[Speaker] So I have this strategy with, it works really good with on market, where there's a seller and the seller's really messy, like a hoarder. And then the agent doesn't really understand how to take good pictures, So, bad lighting, crap everywhere. And so, it just looks terrible. And then you buy that, you get them out of there and you just go in there and clean it out. And then take nice pictures with good lighting and put it back up for sale. You didn't do anything.
It looks like a brand new house.
And you sell for $50,000-$60,000 more or whatever. You know?
That's what we did with the Payson one. Like the old people were living in there. But you know, so it was old furniture and it just looked nasty. We just moved it out, cleaned it. We did carpet and paint. But It looks like a brand new house now. You know?
Yeah. I think the thing that limits people, and tell me if this was for you, it was for me, is when you're doing wholesaling, you're not really doing a whole lot of cash management. Like you are a little bit on your marketing.
Yeah.
Because you got to constantly spend money on marketing. But nothing's— It's not nearly the same as carrying debt. And as soon as you start to carry debt, it brings on like a whole another level of anxiety.
It really does. So, I mean, we've had to like, man— I guess you could say man up and be like, "Hey, this is the next level." You know? To do it. And luckily, you know, raising the money to do it, we've— the hard money lenders, and you can find them anywhere.
Yeah.
But the private money, you know, I have a HELOC, a couple guys on my teams have HELOCs. We also have private money lenders that we're able to pull money from. So getting the money has been another step where back in the day I wouldn't have felt as comfortable like asking people for money. But now I'm like, I know exactly, I run the numbers, I know, feel confident. Like I can ask people and be like, hey, this is going to sell, your money's protected.
Yeah, you know, so there's good equity, it's a good deal, exactly, lend me the money. And so raising capital is, has got to be a priority. And that, that now, Nathan, will be like top priority for the rest of your career, right? Because you either, you need more capital for bigger deals or more deals, and you're always looking for cheaper money. So raising money just never ends now. Yeah, because even if you have really good money, you're going to want cheaper money.
Get it, get as cheap as you can.
Yeah, so learning how to raise money, making that a priority in your business is what's going to allow you to just continue to grow. And you know me, I'm all about margins. So like moving up in the price points is where you start to get those spreads for sure.
And I told you this before, but your little packet in Flipster, yeah, that I use that exactly to meet with some people and take them through it when I asked them for private money. It was perfect. Yeah, thank you for that.
You're welcome.
Yeah, it's got kind of some of the tools to the questions that are asked. I was like, they had a question. Let me check real quick. Yeah, I read it.
Yeah, I'll put the link to that resource, but, or you can go to, you can go to getflipster.com.
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