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Updated 10 months ago,
First Seller Finance Deal.
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $70,000
Cash invested: $10,500
This is my first seller finance deal. I am going to turn the 2nd living room in each unit into 3rd bedroom for each unit. There are currently tenants I inherited who pay about 1/2 the current market rent. I recently bought the property directly across the street which is a 3 bed each duplex that got an ARV of $105,000. Waiting for new appraisal for property directly across the street and will refinance out of seller finance.
What made you interested in investing in this type of deal?
I have been looking for a seller finance. Wanted to bring as little down to close as possible. Made this offer a few times over course of 6 months and gave up on it and the seller came back with favorable contract.
How did you find this deal and how did you negotiate it?
Me and my Realtor found it. We reached out 3 times over 6 months.
How did you finance this deal?
Seller Finance.
How did you add value to the deal?
For $1,000 I will be adding a door to both the 2nd living rooms (one in each unit) turning it from two 2 beds into two 3 beds. I will also be replacing the current tenants that are paying $650 and $700. Both units should be easy to rent out at $1,550. I own the exact same property across the street and rent both 3 bed units for that.
What was the outcome?
It answered a lot of my questions about seller finance.
Lessons learned? Challenges?
Learning the lingo. It isn't insanely different from regular deal but it is also great not paying high fees for a DSCR loan.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
My realtor as always. Will use my lender Ryan Deasy at Capital Three Sixty who has already done (or in process of doing) 7 other loans for me including a 3 property portfolio refinance.