Subject To Acquisition

[Joshua Christensen]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $220,000
Cash invested: $500

We bought this as our primary residence on a private owner finance deal. It is a single family 3/2 anchored in a nice neighborhood. We are turning it into a rental in 2024 as we move to our next note deal with low/no down payment. It will cash flow 1.3x DSCR in the current market.

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

I didn't have a down payment for a house and had damaged my credit at the time. I wanted rentals and also wanted out of our apartment situation. Had to be resourceful.

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

I was the broker who helped the seller buy a new house. We were getting ready to list this one and negotiated the terms that worked for all of us to buy it from them.

How did you finance this deal?

Owner Finance - Subject to

How did you add value to the deal?

Deferred Maintenance & time. It has grown in value 68% since its acquisition. The value is in the financing terms as a $500 initial deposit has created a near infinite return on our investment.

What was the outcome?

We have lived in the house 4.5 years. We're working on our next one and will be renting this one out in 2024.

Lessons learned? Challenges?

Have a much clearer contract in place with the seller. This seller was upset when we paid him off that we "took advantage of them" because the market improved so much. A lot happens in 4 years and the seller's situation had changed for the better. My next one will be more clear with less interaction with the seller at payoff time.

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

I am a broker and structured this deal myself. I do quite a few of subject to in my business.