Creative Financing (Owner finance)

[Kyle Smith]

Investment Info:

Single-family residence other investment.

Purchase price: $850,000
Cash invested: $15,000

Bought on owner financing on a 5 yr term. I then placed a tenant buyer who will buy from me when mortgage ready for $899,900. In the meantime they are responsible for all maintience and repairs and get any forced quity they put into it. The make monthly lease payments to me until the are mortgage ready within 24months.

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

Since interest rates went up, hard to find cash flowing deals so I had to learn the terms business. I then started a business buying homes on terms.

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

Referral.

How did you finance this deal?

Seller financing, no down payment. Monthly payments to seller of $1,500 a month with a ballon payment on or before the 5 yr term.

How did you add value to the deal?

I was a hoarder situation. I paid for the clean out and a deep cleaning of the home.

What was the outcome?

Found a tenant buyer who is just outside of financing. Put them on a mortgage ready plan to be ready to cash out within two years. I also left value add equity of a $100,000 for when they remadol. Just had a drive by appraisal and it was valued at $1,000,000.

Lessons learned? Challenges?

Ensuring all paperwork is complete with the county and to go down and handle it yourself as 3rd parties don't truly know all the details when filling with the county creating delays and correction on the title and deed.

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

I worked with my coaches at Smart Real Estate Coach (SREC). Real estate attorney, my tax advisor who truly understands creative financing - Paul Dion. I also have a mortgage (Solano Mortgage) company ready to go for when my tenant/buyers are ready to go get a loan.