As a real estate agent I got creative

[Christian Huyge]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000

I had clients that needed to sell in order to purchase. The home has a lot of wear and tear. Mainly cosmetic, but needs to be touched everywhere. It is in a decent neighborhood and the numbers should work if there are no crazy surprises. As an agent I wanted to use my commissions toward the purchase. I could also have the sellers pay 2% in sellers concessions. The sellers are still in there renting currently until we find that right house.

What made you interested in investing in this type of deal?

It somewhat feel in my lap. I really did not have intentions of investing on this part of town, but the numbers made sense.

How did you find this deal and how did you negotiate it?

As a real estate agent it is my clients selling and I explained they could potentially get more on the market, but the home needs a bit of work that they did not want to do. So we worked it out.

How did you finance this deal?

I did 25% conventional loan, but I explained to the sellers I wanted to use as little cash as possible. So They agreed to pay 7% commission and also pay 2% seller paid closing costs. I raised the actually purchase price so that the sellers were actually netting a little more than they would have. So win-win for us both.

How did you add value to the deal?

I will go in and do all the work needed and raise the rent up.

What was the outcome?

Still unknown at this point.

Lessons learned? Challenges?

This really helped me as an agent use less out of pocket money, and being with a boutique brokerage I have a bit of flexibility with this type of stuff.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Just me.