Case Study on my First Flip Bought from a Wholesaler

gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw== Case Study on my First Flip Bought from a WholesalerI have been approached by many wholesalers who have said they will send me their great deals. In reality 1 out of 10 of those wholesalers actually send me a deal, and most of those deals are not good enough for me to buy. I was able to buy a property from a wholesaler for the first time earlier this year. The property was purchased for $124,000 in March (2016) and I sold it for $210,000 August 5th. Most of my flips I buy from the MLS, so it was exciting to find a new way get great deals. At the moment I have 11 flips in my inventory with one under contract to buy and one under contract to sell (make sure you read the entire article to see information on all my flips).

How much money did I make on this flip?

I had $86,000 in room between what I sold this property for and what I bought it for, but that of course is not all profit. I had to pay selling costs, buying costs, financing costs, carrying costs, and repair costs. Here is a break down of the costs on this property:

  • Selling costs (buyer’s agent commission, title insurance, etc):        $7,500
  • Repairs:                                                                                                      $30,000
  • Financing costs (local portfolio lender):                                               $4,000
  • Carrying costs (insurance, maintenance, taxes):                                $1,600
  • Staff costs (my team puts time into each flip):                                   $2,500
  • Buying costs (closing fee, recording fees, inspection):                      $1,000
  • Total expenses:                                                                                        $46,600

I made almost $40,000 on this flip, which is a fantastic profit margin! There are some costs here that would be different for others who are flipping and I think it is important to point out.

  • I am a real estate agent and list my own properties. I save 3 percent of the selling costs by doing that. When I buy from the MLS, I also save money when I buy houses by being an agent as well.
  • I can finance 75 percent of the purchase price on my flips with a couple of different local lenders. They charge between 4.5 and 5.5 percent interest with one point. It will be tough for a new flipper to get that same financing.
  • Selling and buying costs vary by state. Costs are relatively low in Colorado, but in other states you may have transfer taxes, attorneys fees, higher title insurance that can greatly increase the cost.
  • I don’t have to do appraisals on my flips and I do not get inspections done either for the purpose of buying. I did start having inspections done after I buy a flip to see everything that needs to be done to give my contractor the specifics of what we have to fix.
  • I have contractors do all the work. I do not do anything as far as repairs. Some people think they can save money by doing the work themselves, but it rarely works out that way.

How to get a great deal from the MLS.

InvestFourMore Real-Time Stats (as of 9/06/18)
16 flips currently in progress. 159 flips completed. 19 rentals properties.
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What repairs did I have to do on this flip?

This flip was not in bad shape, but it needed some work. Below is a video of the property shortly after I bought it, while work was being done.

I try to take before and after videos of all of my flips and rentals. You can see them on my YouTube playlist here: Be sure to subscribe to my YouTube channel to get notified when I post new videos. I post many videos that are not on the blog.

The house needed new flooring, new paint, new counters, kitchen cabinets repaired/stained, new lights, new bathrooms, new doors, new appliances, exterior repairs and a bunch of little things. On most flips I would replace the kitchen cabinets, but this house is in a neighborhood where we were going to be at the very top of the market with our price. A new kitchen would be nice, but it would not add that much value because we might run into appraisal problems.

We used a contractor who had done foundation work for us in the past, but not a full rehab. He did a decent job and was relatively fast completing the job in about 6 weeks. His price was decent as well, but on a couple of more recent flips he came in with much higher bids and we have not been using him.

How to find a great contractor.

Here is the after video of the home. The contractor put in concrete counters, which I was not very fond of.

How to determine what to repair on a flip?

How did I sell this fix and flip?

I list all my flips on the MLS with someone on my team as the listing agent. The agents know that being a part of my team, means they will list my houses without getting paid a commission. This is not as bad as it sounds, as my assistant John enters all the data and does all the paperwork. The agent may have to take a few calls from other agents, but they also get buyers leads from having a listing. I pay a flat fee every year to my broker (I do not own my office, I just run a team within the office) and get to keep 100 percent of my commissions.

When we list a house we make sure it has many good pictures, a great description for the MLS, and is priced right. I want to price my homes slightly above or right at market value. Pricing a home too high, will usually mean you make less money. We figured this house was worth about $200,000 to $205,000 in our current market. I do not stage my flips because I do not think it is needed in my market. I also do not hold open houses like they do on the flip shows, unless one of my agents wants to hold it open to find their own clients.

We listed the house for $207,900 and did not get any offers the first week. Our market is extremely hot and I was getting a little worried we did not have any offers yet, because homes priced right will sell in a couple of days. Then on the 10th day we got multiple offers! We accepted an offer and were scheduled to close the end of June. On June 15th the buyer’s lender sent an email saying they could not confirm all the buyer’s income and the loan could not go through. We had to put the home back on the market and we got an offer for $210,000 the next day which we accepted.

That offer went smooth, except that they asked for a radon mitigation system to be put in and the furnace replaced. We had the furnace checked out and the HVAC company said it was fine. We had the furnace checked out by another company and they said it was fine too. The buyers insisted the furnace was bad, so we agreed to replace the furnace and not the radon mitigation system. The appraisal came in at value, which I was very worried about and we closed August 5th.

It is very common for owner occupied loans to take 45 days to close in our area. Appraisers are backed up and loans are taking longer than they used too.

How did I find the wholesaler on this flip?

I have spent a lot of time looking for great wholesalers, because I hear how successful other investors have been buying from them. I have looked online, gone to real estate meetups, called back people who sent me direct mail trying to buy my properties, and asked everyone I know. In the end, the best wholesaler I have found, found me! A wholesaler emailed all the real estate agents they could find and said they would be happy to pay agents a commission who brought them buyers. I contacted the wholesalers and made sure they knew I was a major player in Northern Colorado.

I signed up to get on their email list and as soon as they get new properties, they send an email out to all their buyers. Most of the properties are not in my area, but a few are. When I saw this property come through in my email I wanted to see it right away. The only problem I had was I had 12 flips at the time, and I was a little short on cash to buy this house. I was able to see the property, which was occupied and worked out a deal to buy the home in about 40 days since the occupants needed time to move out. The wholesaler required $3,000 in non-refundable earnest money, and a $5,000 non-refundable deposit to get the house under contract. I was a little hesitant about paying that much upfront with a company I had never done business with, but some investors I knew vouched for them.

I wired them the money, signed the contract for the house, and closed about 40 days later. When you buy from a wholesaler you don’t get an inspection, financing, or any type of contingency. All they provided was clear title. This wholesaler has sent me a few more deals over the last couple of months that were okay, but not quite good enough for me. Then last week they sent me a great deal that I jumped on and got under contract.

How does it work when wholesaling houses?

Update on my other flips

I am still not buying rentals in Colorado, because prices are too high. I talk about this in detail on a podcast I did a couple of weeks ago. My flipping has been going great now that I am focusing on putting systems in place and getting my contractors lined up how I want them. So far in 2016 I have sold 11 flips and bought 10. Below is a list of flips I have in my inventory:

  • Flip bought 9/15/15 for $95,000 and will be worth $185,000. I had major problems last year with a project manager I hired, which caused huge delays on many of my flips. This flip should be done Monday and listed (finally!).
  • Flip bought 3/18/16 for $102,000, is listed for $159,900, and under contract. I did no work to this house, except for getting the tenants out.
  • Flip bought 3/18/16 for $118,000 and listed for $204,900. This house was just listed yesterday and we used a brand new contractor. We had some hiccups and it took much longer than expected to repair.
  • Flip bought 4/7/16 for $110,000 and will be worth $250,000. This is a country property that needed a major rehab. New kitchen, bath, roof, stucco, electric, plumbing, well work and more. This house should be ready to list in a couple of weeks.
  • Flip bought 4/29/16 for $155,000 and will be worth $225,000. This home did not need as much work as many of my others. The rehab just started a couple of weeks a go and should be done next week.
  • Flip bought 6/21/16 for $130,000 and will be worth $225,000. This home needs $30,000 to $35,000 in work and the work is starting next week. Hope to have it done in 6 weeks.
  • Flip bought 7/1/16 for $142,000 and will be worth $290,000. This home is in need of over $40,000 in work and possibly $60,000 depending on how much we do. The work will be starting in a few weeks.
  • Flip bought 7/25/16 for $140,000 and will be worth $215,000. This property was a 1 bed, 1 bath home with a 1 car garage. I am turning it into a 2 bed, 2 bath home with a 2 car garage.
  • Flip bought 8/1/16 for $130,000 and will be worth $185,000. This house is small and easy to fix! Work started this week and should be done in two weeks.
  • Flip bought 8/5/16 for $114,000 and will be worth $190,000. This home has a huge covered patio that I am going to turn into a garage.

I have used a mix of bank financing, my own cash, and private money to buy these flips. All of the flips listed above I bought from the MLS. I talk about some of the ways I get these deals in my podcast I did with Nikki True (she is on my team and doing an awesome job helping with the flips). It is tough to coordinate getting all the work done on these properties, but I have made huge progress this year getting things dialed in.

How to make sure your contractor does a good job.


I sent out a survey to my readers this week and many of you mentioned you wanted more case studies. Well, one person said I was full of BS over and over, but why they took the time to fill out a survey to tell me that is beyond my comprehension. I will try to have more case studies in the future and do more updates on my flips.

This year has been a lot of fun flipping, at least the last few months have been. The start of the year was tough, trying to fix problems caused by poor management of projects. If things go really well the rest of the year, I will have sold close to 20 flips and bought close to 20 flips as well. My book Fix and Flip Your Way to Financial Freedom goes into all the details on how I flip houses and is available on Amazon as a paperback or eBook.

I also created a flipping video course this year, that goes through every aspect of making money flipping houses.

This post may contain affiliate links and I may be compensated if you make a purchase after clicking on my links.


  1. Dan August 12, 2016
    • Mark Ferguson August 12, 2016

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