Second investment property. Lived there for 5 years while renting the first floor for $800 a month to a buddy and then later on a family member. Purchased via owner financing with a 5 year balloon payment. Sold for $465,000 but as a Realtor chose to run no commission and sold to someone in the neighborhood who also purchased w/o representation so the sales price was closer to $492,900 which would have been a record sales price. In fact I think the $465,000 was a record sales price in the neighborhood at the time.

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

It was an opportunity for my seller. They didn't need the cash and the house needed a lot of work so owner financing matched up well with both our needs. Gave me an opportunity earlier in my career to jump in and own some real estate. My background in construction allowed me to do all the work myself except the purchase of a new HVAC in 2021.

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

Clients of mine - I have sold numerous homes for them. They were liquidating a lot of their real estate holdings. This was the only one that really need to be gutted and they lived hours away.

How did you finance this deal?

Owner financing with a 5 year balloon payment.

How did you add value to the deal?

Gutted each floor. Did the remodel as cheap as I could but still quality work. That meant purchasing floors off craigslist. Tile on the first floor I purchased for a total of $250. Flooring on the 2nd and 3rd floor I purchased from a wholesaler for $1,000. The entire first floor cost me around $1,000. The entire second floor ran me around $2,500 - largely because I chose to do the MDF ceiling, 3rd floor ran me around $1,500. Additional costs $6,000 roof, $9,500 HVAC, $5,000 back/front, $1,000 WH

What was the outcome?

By the time I sold - I owed $185,000 on the property. Sold for $465,000 with zero commissions. I was very pleased with it. Especially because during the 5-6 years I was there I was charging $900 a month for a bedroom on the first floor which brought in an additional $50,000-60,000.

Lessons learned? Challenges?

Wish I had the property better suited to sell since it was a personal home which meant as I was moving into my new home I was scrambling last minute a lot that last month with little projects.