Seller Carry back Deal

[Colton Aurich]

Investment Info:

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

Purchase price: $152,000
Cash invested: $25,000

Seller agreed to carry the loan at a 4% interest only rate until I could refinance within a year. I will use my reserves to renovate the home and put tenants in right away.

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

Needed a lot of work and the seller wanted to sell as soon as possible. Seller was willing to carry the loan which made it possible for me to avoid hard money.

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

I managed the property for a year for the owner. The owner was not willing to put in the money that the property needed to avoid more problem tenants. after the last eviction he wanted to sell. he said he wanted 160,000 for the property so I offered to wave commission fees and came in at 155,000. After the inspection we found a substantial water leak. After which we negotiated down to 152,000.

How did you finance this deal?

Seller carryback. I will use my own cash to renovate. When I finish renovations I will refinance with a conventional loan.

How did you add value to the deal?

renovations / Clean up

What was the outcome?

Buy and Hold. I am actually still in the process of fixing it up. Appraised value is 230,000 as is.

Lessons learned? Challenges?

Always ask the seller if they are willing to finance the loan. Get contractors lined up prior to closing date.

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

I am a licensed Realtor and Property manager so I took care of all negotiating myself.