Vacant lot - seller financing

[Andy Bauman]

Investment Info:

Other other investment.

Purchase price: $2,904
Cash invested: $3,075
Sale price: $13,014

This was a deal where I picked up a vacant lot from direct marketing. I found a buyer before I closed on the deal, I did a self-close on this lot. I did seller financing with this lot with a $1,500 down payment and $216 a month for 5 years. I will be paid back after 10 months and, if the loan goes to full term, will realize about a 74% annual return. Not large dollars, but my goal is to get about 100 of these deals to create more passive income.

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

I currently specialize in flipping and creating cash flow with seller financing of vacant land as well and value add mobile home park investing. This fell in my strategy.

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

I found this deal with direct marketing and negotiated with the seller.

How did you finance this deal?

Cash

How did you add value to the deal?

I found a buyer that wanted the property that could not afford it right now. So I added value through financing to make it possible for them to own it over the next few years.

What was the outcome?

Sold via seller financing.

Lessons learned? Challenges?

I learned not to give-up. I had to follow-up with the seller quite a bit to get the deal down and negotiate with the HOA for back-due fees. I also thought I lost the sale because the buyer didn't see my name on the deed because I hadn't closed yet. I was able to get their down payment and reassure them that the lot was in the process of closing and they didn't have to make their first payment until they could verify that the land was in my name.

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

Nope