Remodeled Rental-Tenant Bought

[Paul Lowe]

Investment Info:

Single-family residence note investment investment.

Purchase price: $550,000
Cash invested: $120,000
Sale price: $710,000

I bought this property in December of 2022. I did a complete remodel on it. For the first 6 months I ran it as a AirBNB and after 6 months I converted it to a long term rental. When coming up to the end of the lease the tenant reached out to me to purchase the property. We sold this using a installment contract. It has a sunset clause maximum of 5 years with no penalty to pay it off early. If it runs the full five years the final sale price will be closer to $821,264 which includes P/I paid to me over the 60 months.

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

This opportunity evolved into a situation where is was good for the buyer and myself. I would have been just as happy keeping it as a long term rental.

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

This was an estate sale and I knew the family. In the beginning they held the note well I was able to complete the remodel. During this time I was not charged principal and interest,

How did you finance this deal?

When it came time to buy I paid cash

How did you add value to the deal?

Complete remodel

What was the outcome?

In the end we were happy with the sales price and the buyer with the financing terms we negotiated.

Lessons learned? Challenges?

This home required a lot of work which I personally did. Next time I would probable sub out more of the work.

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

I am in the business. I used Equity Title and West Star for the servicing company and both of these companies have been professional to work with.