House #12 22502 Depraving Tigers – Another House Flip to Boost Our Net Worth

May 2014

We did it! With enough cash from our prior houses, we decided to buy a home with cash!

22502 Depraving Tigers was a little, unassuming house that we found through our yellow letters. The owner was VERY interested in the fact that we could close in less than seven days as they were ready to be done with the house. We settled on $65,000 as a price for the home, which was 1900 sqft and four bedrooms and two baths. (That’s only $34 a sqft!) The property had a renter in it, and they were paying rent, but this landlord was just tired.

We closed early in May, and you have to remember when you close with cash, the process is so seamless and simple with the title company. There’s no bank, fewer docs to sign, and you only bring a cashier’s check, and you are good to go.

One Wrinkle…

When we went to ask our banker about a loan for this property, we find out he is a real estate investor as well.  Our original plan was to buy the house with cash; then, in our own time, we would get a loan on the property. He convinced us that he wanted the house, so we decide to sell him the property for $78,000. The mechanics to do this meant we would buy the house with cash, and then a few hours later, we sold it to our banker in a 2nd closing at the same title company. Some title companies will do a “double close” where it happens all in the same closing, but we didn’t want our banker to know how much we paid for the house, so we opted for two closings where the statements would be separate.

Love a good all cash close!

Here’s the sale a few hours later

Let’s do the numbers

Looking back, of course, we are sad we sold this one, but 8k of profit after closing costs for holding a property for about 60 mins is pretty good. This house was a good one, and we totally should have kept it. It would be worth about 140k in 2019. However, to sell it right away and make $8,000 was too alluring to us at the time. We say this a lot, but early on, we sold a bunch we wish we hadn’t since we always needed cash for the next “keeper” deal. We had to find a way to keep them all.

HUD Statement when we bought the property

HUD statement when we sold the property

Net Worth Update

See House #11