Seller financed barrier island pool house

[Kerry Baird]

Investment Info:

Single-family residence private money loan investment in Melbourne.

Purchase price: $500,000
Cash invested: $100,000

Seller financed barrier island pool house, used as short term rental. Most guests come via VRBO. My avatar guest is a set of grandparents, their adult children and grandchildren.

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

Have owned many long term rentals, fix and flips, foreclosure & probate houses. This house is my second short term rental.

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

Found it on the MLS, made an owner finance offer at full price. Asked my agent to expand to seller the benefits of getting a lump sum today, and continue to get cash flow from me over time. There is a capital gains benefit to the seller, as well.

How did you finance this deal?

Seller financing, 6% interest only.

How did you add value to the deal?

Using this barrier island house as a short term rental rather than a long term rental, which produces more cash flow; once the furnishings are accounted for, my ROI is higher than my long term rentals.