New guy makes his first offer...

[Andrew Brock]

After months of learning everything I can about Real Estate Investing by following the  forums, listening to the podcasts, reading the books, attending the webinars, and talking daily to my mentor, I felt it was time that I needed to take some action as experience is life’s greatest teacher instead of falling prey to “Paralysis by Analysis”.

As it turns out, I remembered that my sister and her husband have a house in Philadelphia that has been sitting vacant since July. After reaching out to see if they are interested in selling it, coincidentally not only do they want to get rid of it and be done with it, but they also own it free and clear. Just by asking the question, I saw a tremendous opportunity. They told me that they would sell it to me for a "family discount" of $196k which is what they bought it for 13 years ago. The comps are going for $260k in this market. As a new investor, I don't exactly have $40k laying around to put 20% down. I also don't want to use FHA Lending with 3.5% down and be stuck there for a year because I want to use that to "house hack" a 2-4 plex. In the end, I offered them $170k @ 4.5% for 10 years of Seller Financing with monthly payments of $800/month and a balloon of $146k in June of 2031. They are thinking about the offer, but it is literally win/win for everyone. They get rid of the house, I get a first investment property cheap to guarantee a positive cash flow, and they will end up making $242k with interest in the end, $46k more than they asked. They wanted to do it traditionally and get one lump check, which I totally understand and respect, but their situation presented an opportunity for creative financing that is literally a homerun for everyone. So fingers crossed we come to an agreement!