How I Was Able To Get My Investor Client 26% Cash On Cash Using Seller Financing

[Jimmy Lieu]

I'm a local investor and agent here in Columbus Ohio. I wanted to share with you a quick client story of mine (happened just a few weeks ago!) where I helped my client close a 26% cash on cash return deal using seller financing. I found this deal from someone within my sphere of influence.

So I found this deal in the Hilltop area, absolutely turnkey 3 bedroom/1.5 bathroom house with around 1500 SQ ft. From a normal purchasing standpoint, it doesn't really make sense and the ROI doesn't look great because with today's interest rates around 6.5-7%, it kills any sort of cash flow possible. However, I pitched seller financing, and the seller was okay with it! The worst thing they can say is "no" so why not ask??

The asking price was $155k, the seller wanted 25% down, was okay with seller financing the rest at 4% interest rate (amazing freaking interest rate!), and balloon payment within 5 years. The buyer can easily rent this property out for $1,600/month, or most likely even more! The buyer's plan was to rent for a few years, get positive cash flow coming in, and by the end of the 5 years, with all the accumulated positive cash flow, appreciation, loan down payment, etc., they will be able to easily refinance and get most of their money out! Best of all, this was a turnkey property, and is able to be rented out from day one!

Moral of the story: if a deal doesn't work from a numbers standpoint, always make sure to ask about creative financing!

If anyone has questions about how creative finance works, would be happy to answer any questions