Flip & Owner Finance

[Bill Dean]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $35,000
Cash invested: $70,000

Current tenant found a next-to-abandoned hoarder house where owner just left it rot. We cleaned it out, added new heating, insulation, new siding, garage roof, updated electrical, new flooring, lighting and more. Sold it on a contract for deed where we are making interest on top of profit. Split between a partner and myself.

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

Looking for additional airbnb units, this tiny 1 bedroom home needed a lot but was manageable in size. As we started the work and with interest rates doubling, we decided to sell. Due to the small dollar amount to purchase and rehab, we took an owner financing 5-year balloon that paid us additional interest on top of the profit.

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

We offer out tenants referral fees for finding other good tenants and possible locations for us to buy/fix/rent. The owner was looking at getting out of it asap since it had been vacant for 2 years. We matched his purchase price so he could walk away with all his profit from the last 12 years and not lose money even though it was more or less trashed.

How did you finance this deal?

We paid cash from our business profit.

How did you add value to the deal?

We removed 5 dumpster loads of trash from the house to start. Then we remediated any water damage. Then it was replacing all doors, windows, garage doors, and adding attic insulation. We added a dishwasher, updated the tub to a shower, added heat to the basement, and remodeled the kitchen. We hired a 3rd party to install the siding, replace the roof/soffit/fascia/gutters and garage doors. With new a new exterior the home would now qualify for FHA & VA, he held it for over a year.

What was the outcome?

We are receiving monthly payments with a great interest rate.

Lessons learned? Challenges?

Flipping is for people with more time than me! I'd rather find them and help others make money then spend my time swinging a hammer.

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

Great home inspector A1 Home Inspections.