Purchase Date: 23 DEC 16
JV Funding Date: N/A
Sale Date: 13 APR 17
Initial Closing of Books - 01 MAY 17
Note Cost: $19,625
Estimated Workout Costs: $2,491.22
Total Investment: $20,839.05
Check from Closing: $30,361.76
Checks from Seller and Title Company after closing: $168.27 - Water escrow refund.
Actual Workout Costs: $1,277.17 (Received some escrow 4 months after closing to lower our holding costs)
Profit after costs: $9,690.98
We bought this CFD as part of a pool in the Winter of '16. In the beginning we were confident in the value of the asset, but after we purchased the note, we had doubts about our boots on the ground there. We decided to risk our capital on this one instead of taking on a JV, so we kept it in our portfolio. It took a while, but we got a hold of the borrower, who was not living there, and got him to sign a release of the land contract for $500. In the meantime, we built a new team. We were quick to get the property secured, but our contractor put a lockbox on it and didn't pass on the code, so our realtor was locked out. After some delays, we finally got access and she inspected it. We came up with a price to move it quickly and listed it on MLS. We had it under contract for our asking price that week. Our closing was a few weeks later and we were done. Or so we thought.
We were going through the books with our bookkeeper and we were putting in the HUD Statement. We noticed there was $250 in closing costs for a Water Escrow. After speaking with the title company, they sent us a check for $168.27. That's almost another 2% of profit. We finally finished this deal on 29 June.
Total investments, $22,116.22. Our profit was $8,413.81. ROI 38% for a four month hold.