A long case study on how I turned $500 to $6800 and the 4 lessons I learned
So, in this post I created in this group on Nov 24, 2020, I talked about a pair of lots that had a super expensive $700 HOA.
(I would give you a link to those posts, but fb won’t let me for some dumb ass reason, you will just have to scroll down or do a search to find it.)
Anyway, the deal in question started a sometime in early Nov, but I didn’t pay for the 2 lot until around the 24th of Nov.
To make a long story short, I sold those 2 lots (and 1 other one) right before Christmas for $3400 apiece.
That’s a total of $6800 on lots I paid for $250 for each.
*I didn’t even pay the HOA $700+ per lot as I was expecting to. *
(that would bring the total price per lot to around $1200-ish… which I was comfortable paying)
While the payday was nice, I want to share what I learned with you during this process.
**1) If you have more than 1 deal you are working on, then you prevent being hella thirsty for land**
Before I agreed to do the deal, I had the owner get rid of the lien for non-payment of the HOA fees.
Now, the liens *USUALLY *stay with the property, so he can legally sell it to me with the liens in place, but then I would be on the hook for them.
I didn’t want to deal with the hassle since paying them off would have cut into my margins and it can be a time sink to make sure things are done correctly.
So, he got rid of the liens ***because he desperately wanted to get rid of the property.***
This process of getting the lien removed added a few weeks to the process, but I didn’t mind since it wasn’t my only deal in the works.
Because I had other deals to work on, I wasn’t desperate for this lot.
I kept a cool head and not have an attachment to this one deal that may or may not happen.
That bring me to my next lesson…
**2) Never assume the price a person will take for their lots.**
The HOA was too much for the original owner and on top of that, he was moving out of state.
***That means the property felt like a noose around his neck that he desperately wanted to get rid of!***
He jumped thru hoops to get this done since it meant a way out for him.
That also made it easy to negotiate down a price, since he *KNEW *I would be taking on his headache.
So, I went form offering $1000 per lot, to $500 to $250.
Each time some info came about his issues with the lot came up was another time to talk down the price.
He never hesitated when I said *“I won’t be able to pay you the price we agreed upon, but I can do this lower price”*
Why?
Because he was just glad to get the thing off his hands, especially since he still owed money on the property to the HOA.
On to the 3rd lesson here:
**3) Trust the process! (shot out to Joel Embiid)**
This lower price took the risk out of the deal for me…
I never sold a property with such a high HOA before so I was a lil worried about holding on to it for too long.
But, I trusted the process ***(the escape velocity system)*** so I knew I wouldn’t have the lots for long enough that a second HOA payment would get me.
This same system also helped me sell the lots before they were ready to go.
Ya see, I was advertising a different lot in the same area, so the 2 lots were not being advertised yet.
But when I had serious buyer (well, his real estate agent) ask me if I had anything else available, I was able to say *“I actually do, in the more exclusive part of the subdivision”*
*
Thats what allowed me to sell the lots since I got them to contact me for 1 lot, but they upsold themselves to these 2 lots!*
The final lesson from this deal is this:
**4) All rules are made to be broken!**
**
**I have some rules I like to use in my business to help me stay profitable and to keep my time free.**
**
For example, I normally don’t like to sell to real estate agents because their clients usually want title insurance and all that.
That’s not an issue with me except for the fact that title insurance slows down the whole sales process.
**Something that should take a day now takes a month!**
But, since they were paying for the title insurance and will buy the land *as-is* (including whatever taxes and HOA fees are owed) means I was going to make more money on the deal!
So, there are exceptions to every rule and rules get updated/change all the time.
***The key is to be flexible, and to remember the reason why you have a rule in place.***
when you keep your priorities front of mind, you know when to stick to your rule and when to break it.
The question you need to ask yourself is
*“Will this exception to the rule still get me to my business AND lifestyle goals? Or is this gonna be a pain in my ass for no real benefit?”*
If you can answer that question confidently then do what you gotta do!
Anyway, this was a long post, I hope you found some value in this…if you have questions, let me know in the comments.
Now, go get you a deal so you can share your case study with me!