SubtoBnB - Notebook Paper Contract? Written by me?

[Joe Stout]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $390,000
Cash invested: $40,000

My first Subto-BnB deal! Awesome house, just needed about $15,000 in cosmetic rehab and furnishings. Design was breathtaking when I walked in. Found a seller who needed to leave town quickly and was able to find a deal that worked for both of us... $10,000 down and $50,000 under market value 4 minutes outside of a great airbnb city!

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

I was so intrigued by Biggerpockets episode 527. I must have listened to it over and over 15 times. I couldn't believe what Pace Morby was saying... and that it was legal? I just had to challenge myself to do a Subto deal!

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

Met a janitor at my day job, and being myself, spoke to him about what I'm doing in real estate. I offered $375,000 when he told me he was looking for at least $400,000 previously. He came back with $390,000 - we agreed. We negotiated back and forth about the down payment, he wanted $10,000 and I agreed. We had $34,000 left of his profit that I asked him to finance for me over 60 months. From there, I took over the loan of $346,000.

How did you finance this deal?

Took over his loan, paid the $10,000 down payment myself. Now I just pay his mortgage every month & add his profit into the payment.

How did you add value to the deal?

Did some plumbing fixes, painted the entire place, and furnished it. Replacing sunroom windows soon. Put about $16,000 total rehab into it- it was really fine to begin with.

What was the outcome?

It's now projected to be a cash-flowing Airbnb and I just listed it tonight! I just recently got my short term rental license for this city so I am excited.

Lessons learned? Challenges?

It was a little bit of a challenge for my title company to do a remote closing with him but they figured it out. Probably should have gotten an inspection done on the house, it would have saved me from some surprises. Luckily I lived there for 3 months before listing on Airbnb and found (most) issues. Guests will let me know if I missed anything!

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

I'd recommend True Title Company in Columbia, MD.