So I thought that with the whole economy, COVID 19 doom and gloom forecasting out there, it would be really nice to highlight some of the positives in my own personal life, hoping that they will rub off on yours!

Today (and for the next handful of weeks), I am going to be creating a series of posts highlighting a transaction I just completed using seller financing. The banks wouldn't lend, so I had to get really creative in finding a deal that would work for me in today's market, and I am going to share with everyone how I execute, and what I do with my property.

Finding The Deal: So I began telling everyone I know in December of last year that I was looking to buy another property. Fast forward a couple months, and my neighbor gives me a name and a number of a gentleman in the same development with 4 homes that he is looking to sell. I give him a call, and a week later, we meet at the 1st property that has just been vacated by horrible tenants (see the pictures of the trash). The home is a 2,250 sf home, 5 bedrooms, 3 bathrooms, with a pool and a spa in the backyard. Its located in a small community in southern Orlando, FL.

Negotiation: We agreed originally at a $272,000 purchase price. To be honest, this may be a tiny bit above what I thought the house was worth, but if overpaying by a couple thousand dollars to acquire a new rental was what it took, then I was fine with it, as he was going to be financing the deal for me. After the inspection, a few very bad things came up, with the air conditioning being non-operational and the roof being very old and potentially having a couple leaks. I already had a new AC unit and a new roof planned into my budget, but I was able to negotiate a $10,000 reduction in price, down to $262,000

Final Numbers: $262,000 purchase price, with $5,000 down. The mortgage of $257,000 will be carried by the seller for a maximum of 18 months with interest only payments for the duration. The Interest rate starts at 6.5% for the first 4 months, and then creeps up by 1 point each month until it reaches a max of 10% in month 9. I agreed to the increase in interest rate because I am extremely confident that I can refinance this asset once rehab is completed, but even at 10% interest, I cash flow $200 a month.

Preliminary Rehab: The rehab for this particular project is a bit complicated. The plan is to take the floor plan and split it in 2. I will be building a mother-in-law type of suite on the one side of the home, breaking it into a duplex that is a 3-bed, 2 bath 1250 sf home on one side, and on the other will be a 1000 sf 1 bed, 1 bath studio with the 5th bedroom converting into a home office or spare bedroom for the studio tenants.

So for the rehab, the plan is to replace all of the major components of the home: New HVAC unit (with additional duct work), new roof, new pool equipment, and an expansion of the driveway.

Smaller items will be to redo all of the bathrooms, frame up walls to split the home in 2, and a new kitchen in the studio.

Final Thoughts: I hope everyone enjoyed this original post. This deal is a culmination of all of the new skills I have been learning in real estate, from getting a real estate license, to learning and listening to the podcast on BP, and reading what everyone is posting.

I will be posting a new thread every week with my updated projects on the home, as well as hopefully answer any questions anyone has in the thread!

Happy Housing,