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Updated almost 5 years ago,
Tax Deed Auction Purchase w/ Lease Option Exit Strategy
Investment Info:
Single-family residence other investment.
Purchase price: $27,000
Acquired this property from Tax Deed Auction Sale for $27,000 and it is being sold on a Lease Option for $62,500 and currently cash flowing $250/mo after expenses.
Tenant/Buyer is responsible for all maintenance, utilities and closing costs.
What made you interested in investing in this type of deal?
Before this deal I didn't know anything about Auctions, Tax Lien Sales or Tax Deed Sales, I wanted to help out a friend of the family so I did my research on all three and just found it fascinating that you could acquire a property for just the back taxes.
How did you find this deal and how did you negotiate it?
Opportunity was brought to me by a friend of the family who knew I was interested in Real Estate from me making it known that I was an Investor. They were losing the home due to Tax Foreclosure and wanted to know if I could help. I went to see the home and negotiated a Lease purchase agreement with them if I could win the house back at auction
How did you finance this deal?
This deal was financed using a personal loan from SOFI, so technically this was a no money down deal and my return on investment is therefore infinite. All I needed was decent credit...what was amazing is the process with Sofi was so easy and seamless; I simply filled out an application online and uploaded the necessary documents and never even had to speak to anyone. Money was in my account in like 2 days.
How did you add value to the deal?
Was able to save a family home from foreclose, allowing them to work through their current situation for a 18 months; so that they can get in position to buy the house back.
What was the outcome?
The Lease Option is still current and bringing in cash flow as well as paying down my personal loan and building more equity into the deal. Hopefully the tenant/buyer will cash me out in the next 6 months so that I can roll that money into a new deal.