Creative Financing for a Win-Win scenario with huge Payday !

[Tyler Smith]

Investment Info:

Single-family residence wholesale investment in New Haven.

Purchase price: $45,000
Cash invested: $1
Sale price: $65,000

Single family home With 3 bedrooms and 1 bathroom. The Owner was losing the house to tax foreclosure but did not want to leave the property. Was able to create a win- win by renting the property back to her for 1 year at 1200/month under the condition that she pays all 12 months up front at closing. 14.7% ROI for my investor and all 12 months up front!

How did you finance this deal?

Did not have too

How did you add value to the deal?

Offered Creative Financing to get the deal done

What was the outcome?

Created a Win - Win scenario for everyone in the deal! The seller was able to stay in her home for another 12 months without worrying about paying rent or taxes and was able to put cash in her pocket! My Investor is making 14.7% ROI and got the first 12 months rent up front at closing.

[Ehsan Rishat]

@Tyler Smith Congratulations!! 

[Josh Carr]

@Tyler Smith The deal sounds amazing.  It cost 45K for you to get the property and then you rented it back to the homeowner who did not want to move for the next 12 months.  That is creative.  How long did it take for the tax foreclosure to be completed?  I know that New Haven CT is a Judicial foreclosure state and requires interaction with the Superior court.  

[Tyler Smith]

@Josh Carr We Got lucky. Caught it in the early stage of foreclosure plus My Attorney knew the attorney who was doing the town foreclosure and they agreed to stop as long as the back taxes were paid.

[Jaysen Medhurst]

@Tyler Smith, the tenant/former owner couldn't pay the back taxes on a $65k house, but could afford to pay $14,400 up front for a year of rent? Doesn't that sound fishy to you? Stay on your toes, brother. I think you're in for some drama.

[Nathan Gesner]

@Tyler Smith Congratulations but something is missing in this equation.

You said the Seller was able to pay the full year of rent up front so somebody obviously paid more than $1 for the property. Who paid the Seller and how much did they pay her?

[Tyler Smith]

@Jaysen Medhurst Hi Jaysen , No It is not fishy at all. The deal has been closed for a while. She owned the house free and clear. Back taxes were about $10,000. I put it under contract for 45k. Which leaves her with more then enough to pay back taxes , pay a full year rent at closing (which she did) and was able to keep extra cash in her pocket.

[Tyler Smith]

@Nathan Gesner Hi Nathan, I paid the Seller 45k for the property. I then wholesaled it to my investor for 65k. I made 20k , the owner received 45k minus 10k in back taxes minus  14,400 year rent. Which left her with extra money in her pocket after closing. Also to clarify no money was invested out of my own pocket which is why I put one dollar.

[Jaysen Medhurst]

Ah, that makes more sense. Didn't realize she used the purchase money to pay the rent. Good luck with it, @Tyler Smith.

[Bruno Nunes]

@Tyler Smith

Well played.

[Nathan Gesner]

Thank thank you for the clarification and congratulations!

[Dennis M.]

you did well , now keep repeating that . The real winner is the buyer he gets a great return forever if he keeps it . Your money will come and go and you’ll be paying out to the tax man