Owner finance (first time)

[David J. Pring III]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $85,000
Cash invested: $11,000

Found a couple that had a duplex in town that they no longer wanted to manage. The downstairs was rented out below market and the upstairs was vacant and in need of some cosmetic work. I saw value but had to get creative with the financing to make it work. I Small duplex in a good part of town with great bones. The house was being rented below market value and needed to be cleaned up to add value, nothing major.

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

House was in good condition and in a good part of town.

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

from my sister who is friends with the couple.

How did you finance this deal?

$10,000 down payment
$700 per month for 60 months
$1000 every January (interest)
balance due on 61st month (balloon payment $33,000)

How did you add value to the deal?

cosmetic update and cleaning upstairs. took two months and roughly $3,500. Currently rents out for $900 a month. cleaned and painted downstairs rents for $900 a month.

What was the outcome?

currently cashflows 1050 per month after mortgage and insurance. I have very little maintenance issues and should be able to pay the home off completely on the 61st month entirely with rents collected over the five years renting it.

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

no real estate professionals other than a lawyer to handle the paperwork.