Tyrell is making a name for himself in real estate investing with his smart, strategic approach. His first wholesale deal earned him $35,000, showing his talent for finding great opportunities. By being selective with his deals, Tyrell is quickly becoming an investor to watch in the industry.
A $35,000 Wholesaling Success
Tyrell's first wholesale deal netted him $35,000, and it began with finding the right seller and negotiating the price. Interestingly, Tyrell didn't initially intend to wholesale the property; he wanted to buy it himself. He shared the details with a friend during breakfast, who then convinced him to sell it. That friend, who is a seasoned wholesaler, walked Tyrell through the process, making it a successful endeavor.
"I had a friend that wanted to do breakfast. Maybe he knew something about it that I didn't know that he knew. But we had breakfast. I told him about the property I was gonna buy, and he begged me to buy it." - Tyrell
Finding the Property
Tyrell found this profitable property by driving for dollars—a technique where investors look for distressed properties to purchase. In Tyrell’s market, central Kentucky, he uses DealMachine to get instant information about properties, including how to contact the owners efficiently. He spotted a property about to be listed, contacted the seller, and negotiated the price.
What to Look for When Driving for Dollars
In markets like central Kentucky, where fully abandoned houses are rare, Tyrell looks for:
- Gutters falling off
- Overgrown grass
- Cracked or broken concrete on porches and sidewalks
- Other signs of neglect
Making the Initial Contact
Tyrell initially reached out to the seller via a postcard through DealMachine, which led to a conversation about the property. The seller, contemplating listing the property, decided to give Tyrell his asking price instead.
The Art of Calculating Offers
For new investors, calculating the right offer can be daunting. Tyrell shared his approach—it involves finding the purchase price and rehab budget and ensuring that the total does not exceed 80% of the property's after-repair value (ARV). This strategy provides room for refinancing and securing loans.
Knowing Your Rehab Budget
Tyrell’s expertise is bolstered by his ownership of a contracting and construction company. This experience allows him to accurately assess rehab costs quickly, often within a 5% margin. For beginners, understanding the price per square foot for significant renovations—like kitchens and bathrooms—is crucial.
"I can just look at a property. I can probably run through a property within about five minutes and kind of probably within about 5% of the actual rehab costs." - Tyrell
Selling the Property
Tyrell sold the property through a local attorney and always maintains several exit strategies:
- Buy and hold: for rental income
- Wholesale: flipping the contract for a profit
- Partnerships: collaborating with other investors to optimize transactions
Building a Robust Real Estate Network
Tyrell emphasizes the importance of a strong network. He often finds buyers through word of mouth within his network of friends and local investors. This ensures that any good deal he finds will quickly move forward, even if he has too many projects at once.
Reinvesting Profits
Upon closing his $35,000 deal, Tyrell reinvested 80% of the profit into ongoing projects, such as new roofs, gutter replacements, and concrete repairs, thus enhancing the overall value and tenant satisfaction of his portfolio.
Scaling the Business
Over time, Tyrell has evolved his approach to include aggressive strategies like making 1,700 calls in two weeks to find leads. His current focus is on targeting lots and properties owned for over 25-30 years, often aiming for creative financing deals. He leverages software to filter potential sellers and uses structured cold-calling to land deals.
Future Goals
Tyrell's ultimate goal is to net $30,000 per month from his rentals after accounting for mortgages, insurance, taxes, and maintenance. He aims to achieve this by continually cycling smaller properties into larger, more profitable investments.
Conclusion
Tyrell's journey from a $35,000 first wholesale deal to a robust wholesale real estate business illustrates the importance of strategic planning, a solid network, and continual reinvestment. His story is an inspiration for new and seasoned investors alike, showcasing that with the right techniques, substantial success in real estate is within reach.
