Latest Deal. House hacking and seller financing.

[Brett Merrill]

Investment Info:

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

Purchase price: $408,000
Cash invested: $40,000

Another house hack, but with a twist! This one I did not house hack for a low down payment. I house hacked to live for free while doing doing all of the repairs the property needed after closing. For this deal I used seller financing. The property is a beautiful building in a very popular part of town. The seller was a passive investor that had no want to manage the property and was sick of all the headaches. The terms of the seller financing were outstanding. He held a second for the 15% down payment at 4% APR and a 10 year balloon. I provided the other 5% of the down payment. When I purchased the property the rents were $1000, $1200, $1200 and $1400 for a total of $4800/month. After closing I spent about 2 months completing the minor/moderate repairs for approximately $10,000. These repairs allowed me to increase the rents to $1300, $1500, $1500, $1800 for a total of $6100/month. The property has already significantly increased in appraised value and should be able to be refinanced to pay the balloon in no more than two years. Even with the seller financing and conservative numbers for R&M/Cap Ex the property averages 35% ROI and $1600/month cash flow. I found this to be an excellent learning experience with seller financing which lead to a great deal. I certainly plan on using seller financing again in the future.