Quick returns, partnership deals in Austin Texas
Deal 1:
$6,000 Needed
$900 in 2 months (15% simple ROI)
I'm a way behind on the updated pics for this deal, so I'll try to add them tomorrow. Click HERE for PICS
It has sheetrock completed, texture completed, the exterior siding is completed & painted. Interior is painted. It needs to have the Carport Roof Redone, Flooring (we're using laminate & carpet), Light Fixtures, Kitchen Cabinets (already picked out from IKEA), Appliances, Finish Plumbing Fixtures, HVAC Installed.
This deal is in Thrall, TX 612 Taylor St. The owner's grandfather built the home and it has sentimental value. His brother owns the acreage behind this property which sits on 1.5 acres and is next to the School. After a divorce the house was abandoned and became in a state of eeeeeek. The owner signed over the property to us with the agreement that we'd fix it up, then resell it back to him for $89K. There were only a few small liens on the property, so it looked like a good deal. The reason we've run out of money is because we had contractor local to that area (not one of our regulars). BIG MISTAKE. He took way too long & he ran off with our $. We can't track him down and have been trying like CRAZY! We've had to go repair some of the plumbing and other things like that which he messed up, and because of our interest and holding costs, we really need to get this deal completed so we can cash out.
We had the owner do a loan app Today to start the process because we feel we should be able to borrow the $6K soon enough. Once we have the $, it'll only take us a week and a half to finish, so we could have an appraiser in there even before we complete.
Exit strategy is 1.) Owner gets financing for $89K and pays us off. Should be less than a month turnaround on money
2.) If he can't get qualified for some reason, I'll get the financing for $75K to pay off ALL the liens and cash out, then owner finance to him for $850/mo (Essentially $200 or more monthly cashflow. No more than 2 month turnaround on money
3.) If I can't get qualified for some reason, then I have another investor already agreed that has ACE credit and assets to buy it for $75K and he'll earn the cashflow. No more than 2 months turnaround on money.
For obvious reasons this is the top priority for us to get done. We just want to end the headache.
Deal 2:
$10,000 Needed
MINIMUM $2,000 when sold (20% simple ROI)
LIKELY $4,300 - $7,500 when sold
This deal is in the popular Austin Subdivision of Allandale. 1905 Wooten Dr., Austin, TX 78757-7701
It's a 4 bedroom (rare for the area), 2.5 bath, a Family Room, 2 car Garage, Laundry Area, Formal Dining & a recent roof.
The house is a wreck it's so dirty. Needs new flooring, paint, updated light fixtures, kitchen appliances & some exterior pressure washing, new tile in the kitchen & baths. This home can be done up with Granite Counters and such to make it really stand out to draw a higher dollar, which it can get, but our research shows that we can put the minor updates and it should sell Fast! Most of the homes sell in less than a month on the market and many aren't updated. I'll send you comps if you're interested.
We know the owner and he needs money to pay taxes but doesn't have the $ to clean it and fix it up to sell. We are looking to buy it from him for $180K. $10K into it = $190K, assuming we'll have to pay Realtor Commissions ($13020), and closing costs of 2.5% ($5425), and sales price of $217K would profit $8,555. Which we'd split. If we're able to eliminate a buyer's agent, meaning Craig & I are able to find a buyer ourselves, then that would eliminate half of the Realtor Commissions and boost profits to $15,065. Then in case the property doesn't sell for what we are aiming for, then we'll put a clause in the contract for a minimum profit amount to the investor of $2,000.I know that's a HUGE ROI %, but the reason is because there is more risk as far as timeframe for return of moneys because we don't get paid until the house sells. That could be a month (hopefully), or it could take a few months. One of the keys on this property is getting started on it right away, so we can be selling in the busy summer. Completion on it should take less than 3 weeks, the cleanout being the hold up on it. It's full of trash and junk! I know it's not a killing, but we don't have up front closing costs or anything to deal with and it's a hot hot area to sell in. We know the guy, he's old, and we'd be doing him a big favor to get this done, plus we'd make some quick ching.
But this is all contingent upon us getting a final negotiated contract with the current owner that we'll get him $180K for his house on a NET lease, then we keep profits past that and we'll pay for the closing costs & commissions. Negotiations stopped on our end until we could come up with the $ to do the deal first.
Deal 3:
Option 1: $35,000 Needed
$4,200 in 2 months (12% simple ROI)
Option 2: $390,000 Needed
$50,000 or more when sold
This deal is still being negotiated, but it involves another house that is being remodeled in Downtown Austin in a VERY trendy subdivision called Travis Heights. I don't have the exact address on me now, but I know it's right off of I-35 & Riverside Dr. We can approach this in 2 ways actually.
Option 1) The current owner bought the property to fix & flip but doesn't have enough $ to do the estimated rehab.(He had a couple of closings he was counting on fall through) He's not in an urgent situation or anything but it opens up an opportunity for us to come in with the rest of the money needed to finish and sell the property. When complete, if not sold yet, he'll refinance to cashout and pay us back our $ in it plus $4,200 interest.
Option 2) He's willing to sell the house to us for $300,000 (we can probably get that even lower, maybe down to $275,000 even), then we put the $90,000 needed for rehab (this is a high end property, I should have specified that). Market value is between $500,000-$750,000 (price per sqft in this area is over $200/sqft which is a lot for Austin). And the homes here sell like hotcakes.
Since this is another deal where we do the labor & no one gets paid till it sells, we'll split profits evenly again, with a minimum profit in there of $50K (12.5%)
Those are just 3 deals that I have on my plate right now. I've got all kinds of investment opportunities where I just need the $ for them I'd be rockin' and rollin'. For example, we have a Special Effects Movie Studio that a guy wants us to build for him, but he lost his finance guy, so it's a situation where he's looking for a partner, or just a construction loan then he'll get a permanent loan from a bank post construction to pay off the investor. This is right around $1MM for the development. It'll be the only special effects studio in the Austin Area! Just in case you don't know, Austin's a big movie area, so it's a shame it doesn't have a Green Stage. We're going to be the builders on it, so it's going to be built "green" as well and highly energy efficient, so it'll be a "green" green stage! Hollywooders are going to love it! We've got press & media just waiting to hear from us that they we have the funding to build and they're going to be all over it around here.
Another deal, is that my construction partner, Brian, has years of experience in Wisconsin taking old historic type homes in downtown areas, literally picking them up off the foundation and moving them to a countryside or suburban area, renovating them and selling them. It usually only costs around $10-$15K to move the house plus the renovation, which these homes are smaller and have a lot of character so that should stay below $20K. We currently have a client that has 4 Acres that he's willing to let us put homes on and sell! He just wants to be paid for the land when we can at the end! Plus I've found a ton of lots on the north side of Lake Travis in Lago Vista for under $15,000. So, $15K for the house move (they pay us $ to take the house, we just have to pay for the move), $25K for renovations, $15K for the Lot = $55K...where in America can you get a nice renovated house for under $100K? Well, not in the Greater Austin Area, I'll tell you that! We have 2 houses right now that we are looking to move. We're just trying to find the financing to do the renovations because we're trying to convince the lot owner to pay for the move!
Another deal we have brewing is a manufacturing plant that deals with the wall panels we like to build with. The creators of the panel LOVE US and want us to run the manufacturing out of Austin as well. (We already have the Distributorship for Central TX) If we owned the Manufacturing then we profit from all of the panels sold in TX, FL, LA, MS, AL etc you get the idea, PLUS it makes our cost to build walls of a house the essentially the cost of the materials and labor to manufacture them. Let's put it this way...we'll be able to build homes stronger, faster, and better efficiently than stick built homes for HALF the PRICE, but we'll be able to sell them for just as much and even a tad bit MORE! PROFIT, PROFIT, PROFIT! We've already got a couple of investors interested, we just are trying to get our spec home built first!
So all these deals and this doesn't even include all of the stuff for NEW CONSTRUCTION!! We've got commercial opps & residential projects. Stuff here in Austin & Stuff down on the Coast in Corpus Christi.
Honestly, one of the problems I have, is that I get investors telling me that they want to buy an investment and they don't expect me to come up with so much stuff right away. It throws them off!
So if you have other investors that want to invest out here, we'll do, but I'll also be honest and tell you what I won't do or find:
Single Family Residence:
A property that gets positive cashflow of anything over $150/mo after PITI. Why not? Because, simply put, it hardly exists in the Austin Area! Our 3% Property taxes eat up any cashflow you could've gotten. When I was in SLC, I could buy a duplex and make $500/mo on it after taxes, so it's been a HUGE shock for me and took some hard knocks for it to get through.
Another typical request I won't aggressively search for is the 75% - 80% of Market Value (not Appraisal), that only needs lipstick & rouge and will rent out with positive cashflow or will profit at least $20K on the backend sale. Yeah, somebody went to a seminar. Only thing is that the instructor forgot to mention a small detail about real estate...Real Estate is LOCAL. What works in one area doesn't work in another. As you can see from the deals above, I can find these deals, but most of the time those fall in my lap....well, kinda. You see I created a software program that searches our MLS for properties below market value. Contact me for temporary access.
Craig Ellmaker
Ellmaker Realty
512-784-1494