Seller Financed- 6 Bedroom Boarding House

[Jason Coleman]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $120,000
Cash invested: $15,000

Seller financed rooming house. Could be used as a 4 bedroom long term rental. Instead we are going to keep operating as a 6 bedroom "room for rent" model. Figuring out the management side of this boarding house model is... interesting. Let's just say that.

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

The development potential. We're trying to acquire the whole block : )

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

Asked the seller if she had any other properties she would consider offloading which turned into seller financing. "I want to sell more properties but my CPA said I had to wait to sell until next year because of my tax hit" (That's when I come swooping in with seller financing, cash, subject to, listing options...:)

How did you finance this deal?

Seller financing. 10% down payment @ 5% interest

How did you add value to the deal?

Simple cleanup and operated as usual

What was the outcome?

Teardown in 3-4 years and develop on the parcel.

Lessons learned? Challenges?

Bed Bugs!!! We found bed bugs during the due diligence process and had seller fumigate. We have increased management/cleaning systems and paid for monthly pest treatment to stop this from happening again.

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

I am an agent