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Making thousands of dollars in profit on a two-month fix and flip seems like a dream, but Geoff Chatham wasn’t dreaming when he brought in $70,746.13 profit from a single house flip project.
Where did the flip happen? Adelanto, CA.
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How did those numbers work out?
Source: Wholesaler
Purchase Price: $311k
Reno cost: $38,392.46 (3 weeks)
Sale Price: $457k on 6/30/22
Net Profit: $70,746.13
Wholesaler Profit: ~$100k
If you’re asking, “How did he make so much money off one fix and flip so fast?” I wondered the same thing, so I had to get into the nitty gritty of this deal and find out how this all came together.
What Is a Wholesaler?
Before we get into how this deal went down, let me give you a quick explanation of what a real estate wholesaler is.
In real estate, a wholesaler is someone that gets a property under contract, finds an end buyer for that property, and then assigns (or sells) the property to that end buyer for a fee. In this case, the wholesaler made $100,000, and that’s without any risk to them or their money.
Watch the Interview for All the Details
Finding a Deal with Over $70,000 in Profit
These deals don’t just hang out and chill, waiting for someone to analyze them and get the property slowly. You’ve got to act quickly, and this is what happened.
How Did Geoff Find This Deal?
I spoke with Geoff, and we talked about how he’d found this deal, or maybe it’s more of how the deal found him.
As a real estate investor, Geoff was on a lot of “buyers lists” where wholesalers would send properties that might be of interest.
Many times the “deals” investors see in their emails aren’t deals at all. If anything, it is a clear, “You’re going to lose money on this one.”
However, this deal stood out to Geoff, and he hopped on the phone to make things happen.
There were quite a few things that he didn’t have in order to jump on this deal, but that didn’t stop our friend Geoff.
He needed the money to buy the deal, the crew to fix the deal, and the confidence in the deal to buy the deal.
He called up our mutual mentor Brian Davila from Wealthy Investor, and they made an agreement to joint venture on the deal if it made sense.
They ended up going out to look at the property with the wholesaler and quickly noticed that there was a great opportunity there. Brian looked over the hours for maybe 3 to 5 minutes and said, “Let’s go!” And while Geoff was a little more hesitant, he had confidence in Brian’s knowledge of the market and his prior experience, so they moved forward on the deal.
Geoff brought the deal, and Brian brought the crews, years of experience flipping, and money to the deal, and they did a 50/50 JV partnership splitting the $70,746.13
Why Did You Choose to Do This Deal?
The main reason Geoff chose to do this deal was that he noticed something other people didn’t notice. This is why the wholesaler was able to lock it up so cheaply and why there was still plenty of room to make a profit.
Other homes in that area hadn’t been selling as quickly as other areas in the state (California) at this point, but Geoff could see that 1. the market was still going up and 2. There was something awry with the other houses on the market.
If you just looked at the competitor houses from the outside or only quickly glanced at the photos, the houses looked like they were nicely done and ready to go.
However, Geoff has an eye for detail.
Geoff went into the Matterport and looked at the 3D imaging of the houses. He looked at the part they hadn’t taken photos of and noticed there were small things missing here and there. Maybe there wasn’t carpet on the steps or other small unfinished things.
Well, he knew that he was going to make sure his flip was all finished up and ready to go to the new buyer. And that’s exactly what happened.
Geoff found the diamond in the rough.
Why Was This Flip So Successful?
This flip was so successful because Geoff took the time to look deeper into the project to see what was missing and how he could add more value to the property and make it more attractive to buyers.
The good thing was that he didn’t have to do a lot of the extra value add “tricks” that flippers have to do.
– He didn’t have to add a bathroom
– He didn’t have to add a bedroom
– He didn’t have to add additional livable square footage
In fact, this was a hoarder house that looked terrible, so the biggest thing needed for this house was just a thorough cleanup. Removing all the trash and grime and giving the house a “lipstick” rehab so that it would look beautiful for its new owner.
How Much Money Did Geoff Walk Away With?
Out of the $70,000 profit from the deal, Geoff took home 50% for a whopping $35,000 profit. The only money he put into the deal was $500 to pay the utilities, and that was simply because it was easier for him to take care of it.
How to Contact Geoff Chatham
You can get ahold of Geoff through Instagram. He’s not only a real estate investor, but he also works as a realtor, and offers limited no-cost coaching sessions and occasionally internship opportunities.
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