1/1 SFH and 2/1 SFH on the same lot

[Christina Linn]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $53,000
Cash invested: $20,000

Two SFH on one lot. The small house needs a new kitchen and possibly bathroom, but the bigger house needs a new roof, new trusses, ceiling, walls, bathroom, kitchen and probably a furnace. We will get the small house ready first and then the big house. Both should be ready and rented by the end of the summer.

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

I liked this deal for the prospect of learning more about creative financing. Plus, it's 10 feet or so from the back door to my 8-plex; I love this fact!!

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

It was on the MLS. We offered $26,000 and countered up to $30,000, but the owner would not budge on price. We gave up on this one, but decided to try for owner financing. We paid more than we wanted to, but all things considered it was a fair deal in the end.

How did you finance this deal?

Owner financing with $12k down and $1k per month payments with 0% interest.

How did you add value to the deal?

We are replacing the kitchen in back house right now, prior to first tenant. We will replace bathroom, kitchen, roof, and ceiling/walls as needed to get the front house ready to rent.

What was the outcome?

In the end we will have about $20k in extra equity, but we will have great cash flow and after 4 years the property will be owned free and clear and bringing in about $1,700/month.