It is a very interesting and unique property because it has a lot of lessons built into it.
The property has been stuck in probate for more or less 7 years. When the owner finally moved the property from probate she decided to sell it. At the same time, she is also building a house in Florida and expected to move- in into that home on December 15, 2020.
Although before she could move in, the builder of her house in Florida required her to pay all the cost by December 14.
Thus for the need for Fernando’s team to sell the other property in Illinois.
The house was built in the 1970s. It’s a 3,000 sqm floor area property with five bedrooms and two and a half bathrooms. It has a full basement with a pool table and bar. It also features a spa room with a hot tub. It has an outdoor pool as well. It sits on 1.2 acres in the middle of forest preserves that gives a very secluded ambiance.
The only issue with the house is it’s super outdated and a lot of things are not up to code which brings a lot of safety issues. This gives Fernando’s team a lot of work to Fix and Flip this house.
If you want to learn more about how and how much Fernando’s team spent in fixing and flipping this house, just continue watching this video.
Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
Hey! Guys and gals, Fernando Angelucci here, wanted to go deep dive on a few deals that we've done in the last couple of weeks. We've been getting a lot of requests for us to go a little bit further in detail on both our wholesale single family business, also our fix and flip business and some of the commercial assets we do. So, the first property I want to talk about is a fix and flip project in Schaumburg, Illinois. Very interesting deal, very interesting unique property, and has a kind of, a lot of lessons built into it. So, originally we had met with the seller and the property had been stuck in probate for something like seven years, something ridiculous. And she finally got it to clear through probate and was ready to move on with her life.
So, she wanted to sell it. And then, simultaneously she started building a home down in Florida and was slated to move into that home on December 15th. But to be able to move into that home, the builder required that she wired all of the proceeds by December 14th. So she said, Hey, Fernando, really like your company, like the options that you bring multiple investors to the table. But I'm telling you right now, I have to close on December 14th, no matter what. I said, okay, that's no problem. We've got plenty of time. So, we walk through the property. It's an old property built in the 1970's. It's gorgeous. It's 3000 square feet. It has five bedrooms, two and a half bathrooms. It has a full basement with a pool table and bar. It has a spa room with a hot tub. It's got an outdoor pool.
It sits on 1.2 acres in the middle of a forest preserve. So it's, even though it's only five minutes from the highway, it feels super secluded. When you get in there, there's tons of huge growth trees, old growth trees all around the house. So as you know, this should be no problem. The only issue with the house was that it's super outdated and everything was kind of hodgepodged together. So, the person that originally built it was an HVAC contractor. So, they kind of did all their little, you know, twists and turns in it, dual zone, heating, dual zone cooling some things weren't really done up to code. And then, when the seller bought it, her husband was also very good with his hands. So they would do a lot of, you know, let's just say not up to code changes to the house running, you know, 120 electrical under the ground without a guide wire.
So, that's pretty dangerous if you accidentally hit it. When you're excavating, they had gas pipes that were running all over the property to heat the pool and, you know, to do the old lights when they're still gas lights. So that's also not very safe as well. We also found a ton of just safety issues. There was two major gas leaks that were going on in the house. One from one of the furnaces, another one from the garage heater, the property actually has three garages on it. So just super interesting house, very large lot, gorgeous areas, just outdated and needed a bunch of work. So I said, okay, we did the analysis on the property. And I figured that there'd be anywhere between a hundred thousand to $150,000 worth of work, depending on the level of finishes that you wanted to put into this property.
We ended up going under contract for 325,000. I originally offered her 300,000. But when she ran through her number and said, Hey, you know, for me to get this done today, I really need 325,000. I said, all right, that's no problem. So, we took a few things off of our budget. Got the property signed over. I told her, Hey, you know, there's a good chance, probably 80% chance that we're going to sign this contract over to one of the investors that we work with. All the terms will be the exact same to you. The closing date and timelines will be the exact same to you. But it's just going to be a different entity. That's going to be closing on it. And the reason for that is we either will partner with our investors. So they'll put up the funds or if the deal doesn't have enough meat on the bone for them, where they don't want to split the profits with us, then they'll actually ask to buy us out through an assignment and we'll make an assignment fee.
So, that was the original plan on this. Had a couple investors walk through that were ready to you know, fix and flip the house. I ended up getting an offer at 380,000, to take down the property, to do the rehab. The only issue was, this was, it was one of the highest offers I got, out of the seven or eight offers that are received on the property, all ranging from 335,000 all the way up to 380. So, it was the highest offer. So we decided to take a chance on these investors, because, you know, usually I like to to have a pre-established relationship, somebody that I've done business with before, however, it's a catch 22. I can't have a business relationship with you if I've never given you the opportunity to close on your first deal with us.
So, this was one of those types of situations, where I gave them the opportunity to prove to me that they're a good investor and they follow through on their work. So fast forward. It's about, I think it's around December 1st at this point. So we're 14, 13, 14 days from closing and the investors. They saw that we had the property under contract for 325,000. Originally I told them, I said, Hey, we're, we have an under contract below 380, and we're going to keep the difference. And they said, that's fine. But then when they saw how much we were making, they started to get a little greedy and started counting our pennies. Which, you know, I don't count if you're going to make 150,000 or $200,000 on a rehab project. I'm not going to ask you for a portion of that. So, I expect the same level of professionalism when you're working with me.
Why does it matter? I have it under contract. Well, they didn't see it that way and they want it to tarnish the relationship. So, on December 1st, they decided to redact their offer and resubmit an offer at 330,000. They thought that because closing was so close, I'd have no other way to go with a back up offer. And, that they kind of had me in a corner. And I said, listen, you know, I'm not, I'm not bluffing with you. Not only do I have seven other buyers behind you, but I'm also willing to do this project myself. And again, they thought that I was bluffing. So, they tried calling my bluff. I said, all right, you know, that's it, we're just going to cancel the contract. So, I ended up closing on the property myself on December 14th, we ran the scope, just hired the contractor today.
So, I'm super excited about it. And so here are the basic numbers. So, we have it for 325,000. We can spend anywhere between a hundred to 150,000 in rehab, depending on the level of finishes that we're going to put into the property. And then, that will allow us to sell it anywhere between 580 to 610,000 plus, depending on the type of buyer. I think that $600,000 number is going to be super fair. We're in a market right now, where there is super low inventory. Every property that I send out to my investors, every property that I list on the MLS is usually getting anywhere between seven to 15 offers within the first two weeks. So, truly is a seller's market right now, just because of the low inventory. I think that was because of, you know, the pandemic is really causing people to kind of hold back, slow down on any major costs, slow down on any transition.
So, to sell a property, you usually have to have another one lined up to buy as well. And because not a lot of people want to do that. There's low inventory, it's causing an artificial price increase. I think this artificial market's gonna last probably until the, probably the end Q3 to Q4 of 2021. And then at that point, I think we're going to start seeing things kind of normalize again, but because they're super low supply we're just in a perfect time to do this. So, get with the contractor, we should be able to finish this project in about eight weeks. He's a really good friend of mine. He does amazing work. He's actually one of my investors, that also buys properties from me. And so I know him really well. I have a great with them and I'm just super stoked, really excited to start working with him. In the end of that eight week rehab, we're going to go ahead and sell the property or listed at least with a whole set of professional photos, professional videos.
We're going to do a 3d virtual reality experience where you can, you know, on your computer or even put on these virtual reality goggles. You can walk through the entire house, look all around, look at the ceiling, look at the floors. You can measure things. It's going to be super cool. So, this was very like just opportunistic deal for us to take down. And again, like I said before, there was a lot of lessons learned in this, you know, number one, if somebody says that they are willing to close on the deal, if a wholesaler says that they're willing to close on the deal, number one on the wholesaler side, they better mean it because this seller had a drop dead date of December 14th. If, the money was not wired to the builder in Florida on December 14th, when she got down there with her rental truck that she's paying, gosh knows how much money for, I mean, it's a huge truck to fit 3000 square foot feet worth of house into, you know, they wouldn't have given her the keys and now she's got to pay additional holding costs.
And what we're doing is for all those investors, we're offering them a 10% return on their money and that's 10% absolute. So, what that means is, you know, this is about an eight week rehab project. I'm assuming that we'll be able to get it on the market within three months. So, about 12 months in that it'll sell within a month after that. So, we're looking at about a four month project from check to check if you will, from closing table to closing table, but just to be safe, I decided to take out a fix and flip loan that will actually give me an entire year of leeway, it's interest only. And the nice thing is with that 10% absolute interest rate. If, we finish in 12 months, you get 10% on your money. If we finish in six months, you get 10% on your money, but once you apply that to an annual percentage rate, you're actually making 20% APR because we finish it so quickly.
And then same thing with, if we finish it in four months, now that number goes up again, and now you're going to be making anywhere between 25 and 30% return on your money from an APR standpoint. But again, it's just a 10% absolute. And the way we structured this with our investors is, you know, no payments, no debt payments until the property sold. And once the property sold, the investors get paid out first, after the investors get paid out first, then we go ahead and take the rest of the profits, into the fix and flip company. So super cool deal, really excited about it. Like I said, it's on, in the middle of the forest preserve it's 1.2 acres, five beds, two and a half bath, 3000 square feet in an area where properties basically never come up for sale.
It's a property in this little area, comes up for sale, once every 10 years. So super, super excited about that. So that's the first deal that I wanted to talk about in Schomburg. Now, let's switch gears and talk about some of our wholesale deals and how to work with a wholesaler to really get, you know, the fast lane, really to get the deals first. So the first one we're going to talk about was a property in South Holland. It was a small investment property. It worked both ways to either go as a buy and hold property, or as a, fix and flip. And let me go ahead and pull up those numbers so that we have them here in front of us.
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