SFH purchased for $10 sold for $800k

[Shiela R.]

I thought you might be interested in seeing a remodel project that I recently completed. It was the first remodel I have taken on in a while and I found it very rewarding from start to finish. One of the coolest things about the project was I bought this house in Lafayette, CO (Boulder County) for $10.

It goes back to my early investing days of buying on terms.  I did a bunch of sandwich lease options but this project involved using a land trust.

I'm considering doing a class or some sort of course. Would any one be interested in that?

[Shiela R.]

Hi @Steve K.! So, this was not what I would call retail, meaning not on the MLS. You can't get these types of terms in the MLS - at least not in 2022 in Boulder County. It reminded me of when I first started in REI and I was wholesaling. But instead of me farming and marketing, these happened to be repeat clients and friends who reached out to me. I felt like they where leaving money on the table so I threw out a sort of partnership with terms that felt fair to both of us.

I hired a trusted real estate attorney who actually started CAREI. He drew up all the paperwork after I told him the details - Sellers keep paying the mortgage, taxes and utilities. And I would use my own money for the remodel. Plus I would manage the project with complete creative control and decision making latitude (as the trustee). I'd then list in the MLS. We agreed on a cap to protect their equity and give me a return on putting my own money on the line. The QC deed was granted to Property Address Trust that's where the $10 comes in - must have legal consideration. This trust agreement named all 3 of us: husband and wife (50%) and my company (50%) as co-beneficiaries. Running concurrently with the Land Trust was the Co-Beneficiary Agreement that defined the equity split.

Easy Peasy :) I simply showed them a resale study in google sheets and the numbers made it a no brainer. In the end, the sellers walked away with about $80k more than if they listed as-is.  Plus they had a tremendous amount of equity as I sold them the house 10 years ago for $290k. I made a return on my investment + a commission. The buyers got a much better, more updated and functional home. Everyone won!