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“Bob” almost went broke in real estate during the Great Recession.
Then he bought a property, sold it, became the lender, and brokered it twice.
He was back on his feet.
Comeback story below:
#cre #retwit
Then he bought a property, sold it, became the lender, and brokered it twice.
He was back on his feet.
Comeback story below:
#cre #retwit
A single unit franchisee drive thru building hit the market for $350K.
Seller was willing to “carry back” a loan for $250K at 6% interest only, so Bob needed $100K for down payment.
Seller was willing to “carry back” a loan for $250K at 6% interest only, so Bob needed $100K for down payment.
Bob put the property in contract, brought in a friend for the $100K down payment, and closed on the property.
6 months later, Bob sold the property to the tenant for $550K and carried back his own loan for $350K at 8% to finance the deal.
This is known as a “wrap loan” where Bob didn't pay off the existing loan, but rather "wrapped" a new loan around it and “upsized” the loan amount and interest rate creating arbitrage.
Result:
Investment: $100K
Profit: $200K
Cash Flow on Debt: $1200/mo.
Investment: $100K
Profit: $200K
Cash Flow on Debt: $1200/mo.
No lie - Bob then brokered a sale/leaseback at $750K, which he double ended and made another $45K in commissions.
Over the course of 2 years Bob bought the property, sold it, became the lender on it, then brokered a sale/leaseback making over $300K across fees, profit, and interest.
This was a home run in the bottom of the 9th inning with 2 outs type thing for Bob.
He stuck it out and is now thriving in the real estate business.
He stuck it out and is now thriving in the real estate business.
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