In a conversation I had with Matt Aitchison, he explained to me how he was able to net $100,000 from his very first flip by performing a single bandit sign campaign.
Matt obtained his real estate license immediately after graduating from college and began to create a traditional real estate company. Once that was up and running, he decided that he wanted to start investing in real estate on the side in order to bring in an additional stream of income.
A few days later, Matt woke up at 4 A.M. and drove around the rougher parts of his town to throw up a bunch of bandit signs. The very next day, he had his first lead. He received a phone call from a guy that said he had just gotten into town and was only going to be there for a week. Talk about perfect timing! He explained that he was in town because his mother was sick and he was helping her move closer to him so that he could take care of her. His mother was a hoarder, so her son really wanted to rid himself of the property. He told Matt “if you give me $75,000, can close by the time we leave in 7 days, and help us find a moving truck, the property is yours.”
Since this was Matt’s first deal, he didn’t really know how to run the numbers properly. However, he had met a couple of serious real estate professionals, through the course of starting his RE agent company who understood how to run the numbers, understood the real estate industry, and understood construction. After discussing the deal with them, they all said that he had found a gem!
Matt did understand how to run comps, and he discovered that the property was worth $140,000 in its current condition.
Since Matt was 22 years old and was already in $20,000 in debt, his next step was to figure out how he was going to pay for the property. He ended up doing a joint venture with an experienced flipper that he had met through networking. The flipper’s role in the partnership was to help secure a hard money loan through his lending contacts and to project manage the entire deal in return of 20% of the profits.
Matt was able to get all of his ducks in a row in less than 7 days and was able to pay the owner’s son the $75,000 in cash that he was asking for. Matt put in an additional $25,000 in renovations and sold the property for over $200,000.
All it took was the act of getting up at 4am on a single morning. This one act was the catalyst that started a chain reaction, which ultimately produced over $100,000 in profit! However, when Matt got up that morning, he wasn’t telling himself that he was putting up the bandit signs so that he could find a deal that would net him $100,000. He was simply taking action that would put him in the best position to succeed, and then he took advantage of an opportunity that presented itself.
The more action you take, the more opportunities you get presented with, and the better chance you have at succeeding. It really is just a numbers game!
When is a time where you took what at the time seemed like a simple ACTION, but it ended up resulting in a HUGE payoff?
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.