Interesting long-term investment

[Emily Ford]

Investment Info:

Single-family residence other investment.

Purchase price: $178,509
Cash invested: $5,800
Sale price: $339,500

This was different in that it was a preforeclosure; partner and I bought it from the owner and leased it back to him for a year. Seller was supposed to do minor repairs (paint, touchups, flooring) and we split profits with him upon sell. Seller paid rent till October 2018 and ended up having to be evicted. Partner and I had the repairs done and still split the proceeds (minus the cost of eviction, late rent and repairs).

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

Trying to start investing business.

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

Door-knocking preforeclosure list. Got the buyer interested in speaking with my partner; went back later in the evening and partner and I negotiated the deal with the seller.

How did you finance this deal?

Partner provided 95% of funds; I provided the remaining 5%.

How did you add value to the deal?

I did all the follow-up, documentation, and communication with the seller.

What was the outcome?

Made the minor repairs and sold the house a year later which changed taxing to long-term. Split the proceeds with seller.

Lessons learned? Challenges?

Should have taken the rent money from their proceeds upon purchase.