BRRRR Deal with a Twist!

[Luther Wilson III]

A business partner and I just did our first BRRRR together on a single-family home investment in Independence, MO! The property is a 3 bedroom, 1 bathroom ranch with a full, unfinished basement and an attached one-car garage that was built in 1956 and is under 900 square feet.

Purchase Price:  $70,000

Rehab Cost:  $15,000

After Repair Appraisal:  $108,000

Now comes the twist...  Instead of holding the property as a rental and then having to manage the property or hire a PM to do it for us, our plan is to owner finance the property.  This will be done through a contract for deed or a true owner finance deal.

Here are the terms we're shooting for on the back end:

Purchase Price:  $125,000

Down Payment:  $15,000

Monthly Payment (PITI): $1,000

Interest Rate:  7.5%

Term:  22 years / no prepayment penalty / no balloon

We were able to use private/hard money along with some of our own capital on the front end as part of the acquisition and then refinance a lot of it out.  There was still a significant amount "left in the deal" per se, which is why the owner finance piece is so critical.  Especially in this market...

In my opinion, owner financing properties is like a double-whammy, or the best of both worlds, in regards to flipping or holding property.  Not only do you get a large down payment from your buyer once you resale but you also get to cashflow each month...  All the while not having to deal with management or maintenance...  My question:  Why aren't more investors utilizing this strategy???

Either way, we'd be happy to share our knowledge experience with those who are interested in learning more about this particular deal or creative financing in general.

Cheers and happy investing!  :)

@Phil Shearcroft

[Adam Reynolds]

Congrats and great work! How long did it take you to find the lease-option buyer? What was your marketing strategy? What was your backup plan if you couldn’t find a lease-option buyer? Thanks in advance for sharing. This is something my partner and I have been considering as well.