Derek Dombeck loves creative deals, so when a friend offered him a defaulted note that he wanted to unload, he jumped at the chance to be in first position. For only $4500, he was poised to take possession of a 4-bedroom, 2-bathroom house on an acre of land in Wisconsin.
But this wouldn’t be the Deals Gone Bad series if something terrible wasn’t about to happen. The first hint of trouble was that the owner didn’t want to meet Derek at the house. He chalked this up to a slight hoarder problem, and he ordered the dumpsters to get ready to clean out the house. Then he found out about the back taxes. And then he got into the basement.
This house had $125,000 in ARV, and the back taxes equaled about $18,000. It was a solid deal. But it wasn’t hooked up to city water or sewer. In fact, the ten inches of water in the basement indicated that it wasn’t hooked up to anything really. And the contractor Derek had hired to clean out the house refused to touch the floating furnace and open pit of sewer.
The work Derek had to put into this house to get it ready for anyone else to buy it was tremendous, but he couldn’t have done it without his local networks. We talk about how much stronger an investor can be when they are plugged into their local REA or mastermind. If you’re not a part of a real estate investor network, then you absolutely should stop putting it off. Newer investors have no idea what it’s like to have the real estate market go south, and they’re going to need that mentoring to get through the next year.
If you’re in Wisconsin, or you’re interested in Derek’s Generations of Wealth cruise in 2022, send him a message at Derek@bestREIfunding.com.
Watch and Learn:
Listen and learn:
- Why you want to have an open relationship with the town treasurer, tax department, or city hall.
- How to spot a hoarder in 2 easy steps, and why you need to be prepared for the worst.
- The importance of a local REA, local networks, or relationships with local real estate investors who can help out in a pinch.
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