All Forum Posts by: Bill Dean

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $35,000
Cash invested: $70,000

Current tenant found a next-to-abandoned hoarder house where owner just left it rot. We cleaned it out, added new heating, insulation, new siding, garage roof, updated electrical, new flooring, lighting and more. Sold it on a contract for deed where we are making interest on top of profit. Split between a partner and myself.

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

Looking for additional airbnb units, this tiny 1 bedroom home needed a lot but was manageable in size. As we started the work and with interest rates doubling, we decided to sell. Due to the small dollar amount to purchase and rehab, we took an owner financing 5-year balloon that paid us additional interest on top of the profit.

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

We offer out tenants referral fees for finding other good tenants and possible locations for us to buy/fix/rent. The owner was looking at getting out of it asap since it had been vacant for 2 years. We matched his purchase price so he could walk away with all his profit from the last 12 years and not lose money even though it was more or less trashed.

How did you finance this deal?

We paid cash from our business profit.

How did you add value to the deal?

We removed 5 dumpster loads of trash from the house to start. Then we remediated any water damage. Then it was replacing all doors, windows, garage doors, and adding attic insulation. We added a dishwasher, updated the tub to a shower, added heat to the basement, and remodeled the kitchen. We hired a 3rd party to install the siding, replace the roof/soffit/fascia/gutters and garage doors. With new a new exterior the home would now qualify for FHA & VA, he held it for over a year.

What was the outcome?

We are receiving monthly payments with a great interest rate.

Lessons learned? Challenges?

Flipping is for people with more time than me! I'd rather find them and help others make money then spend my time swinging a hammer.

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

Great home inspector A1 Home Inspections.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $169,000
Cash invested: $5,000

Using seller finance, I was able to pay asking price plus more to the seller while avoiding the bank for the first 2.5 years of owning the home. With 3% down, I was able to build up 25% equity in 30 months with a negotiated rate and term seller finance.

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

I always look for contract for deeds or lease to own opportunities. That way I can use as little money as possible to control a deal. For myself I knew I needed to get out of househacking mode or my girlfriend was gunna hack me out of her life. So, I called lots of FSBO's until I found one 2 blocks away. They owned it outright so I explained my situation and showed them how I would pay them ASKING PLUS INTEREST. In this case they got more for their house than if they had sold it outright!

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

With lots and lots of calling FSBO's I finally found one what was interested in seller finance and not some ridiculous 35% down high payment BS. They were willing to take more time to get the money back but get asking price plus the interest over the course of 30 months. And they accepted my down payment being what it was $5000 instead of a % of asking.

How did you finance this deal?

I had a line of equity on my first househack duplex with just enough to cover the earnest money and first months rent. As soon as I knew we were golden, I started listing the house for rent. In this case I paid the seller $5000 down and $1000 a month till I could refinance. I just didn't play on the lowest interest rates in history and a pandemic to hit the same month...

How did you add value to the deal?

Having the lawyer, the knowhow, and contract experience helped. The seller was a judge so everything had to be perfect. After bouncing the C4D between our lawyers, we were both satisfied. In this case, I gave the seller full right to the property if I was 45 days late on any payment with no equitable return either. I took all the risk but knew the value of the home.

What was the outcome?

I learned that these deals are possible, and when explained right, more sellers are willing to get paid more and be the bank than you would think. So far I am sitting in tax filing, appraisal, and bank timeout waiting for everything to catch up but in 30 months I went from 3% to 25% ownership. Not bad.

Lessons learned? Challenges?

Lesson learned: FIGURE IN CLOSING COSTS! I went to refinance the property into my name and realized I hadn't budgeted the closing costs in. It wasn't 25% I needed. It was closer to 28% if I didn't want to pay out of pocket. Oops!! So now I have to roll in some closing costs and pay a quarter point more interest. Lesson learned!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $169,000
Cash invested: $5,000

Purchased a FSBO using seller finance. I had just become a Realtor and knew I couldn't get a loan for at least 2 years. It was meant to be my house but I needed to rent it out so my income would be higher and more stable when I could refinance it. Having an aggressive note with 90% principal and 10% interest, in 30+ months I've been paying on it, I've never had a vacant month and own 25% of the house. Waiting on the pile up at the banks, title company, and appraisal companies to finally close and take full title. Not bad for putting down 3%...

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

I always look for contract for deeds or lease to own opportunities. That way I can use as little money as possible to control a deal. For myself I knew I needed to get out of househacking mode or my girlfriend was gunna hack me out of her life. So, I called lots of FSBO's until I found one 2 blocks away. They owned it outright so I explained my situation and showed them how I would pay them ASKING PLUS INTEREST. In this case they got more for their house than if they had sold it outright!

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

With lots and lots of calling FSBO's I finally found one what was interested in seller finance and not some ridiculous 35% down high payment BS. They were willing to take more time to get the money back but get asking price plus the interest over the course of 30 months. And they accepted my down payment being what it was $5000 instead of a % of asking.

How did you finance this deal?

I had a line of equity on my first househack duplex with just enough to cover the earnest money and first months rent. As soon as I knew we were golden, I started listing the house for rent. In this case I paid the seller $5000 down and $1000 a month till I could refinance. I just didn't play on the lowest interest rates in history and a pandemic to hit the same month...

How did you add value to the deal?

Having the lawyer, the knowhow, and contract experience helped. The seller was a judge so everything had to be perfect. After bouncing the C4D between our lawyers, we were both satisfied. In this case, I gave the seller full right to the property if I was 45 days late on any payment with no equitable return either. I took all the risk but knew the value of the home.

What was the outcome?

I learned that these deals are possible, and when explained right, more sellers are willing to get paid more and be the bank than you would think. So far I am sitting in tax filing, appraisal, and bank timeout waiting for everything to catch up but in 30 months I went from 3% to 25% ownership. Not bad.

Lessons learned? Challenges?

Lesson learned: FIGURE IN CLOSING COSTS! I went to refinance the property into my name and realized I hadn't budgeted the closing costs in. It wasn't 25% I needed. It was closer to 28% if I didn't want to pay out of pocket. Oops!! So now I have to roll in some closing costs and pay a quarter point more interest. Lesson learned!

Investment Info:

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

Purchase price: $108,000
Cash invested: $8,000

Lived in half and rented the basement using the cash flow to survive at times and purchase more real estate!

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

Living as close to rent free as possible looked great but having the cash account grow year after year was the real eye opener. I leveraged my equity to purchase more rentals after that.

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

I looked for months and ended up talking with an elderly investor at a Home Show. He actually found me. From there I did a walkthrough, didn't haggle on price, and took the deal.

How did you finance this deal?

I used an FHA loan so I was able to get into the home for only 3.5% down plus closing costs.

How did you add value to the deal?

I immediately added showers and updated the bathrooms. Completely washed down all the walls and ceiling and painted. Most of the improvements were through the remodeling company I worked for already.

What was the outcome?

I still own the duplex today and it is my biggest cash flow producer.

Lessons learned? Challenges?

Lesson learned...househacking works. Living with tenants can suck, but the long term goal far outshines a random loud noise.

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

My lender was accepting almost anyone at that time so they snuck me into the house with only 18 months of commission checks. He is still the #1 first time home buyer lender in the state.

I am numbers oriented businessman who is always investigating different business ideas and ventures. I love reading and expanding what I know and believe. Recently I've focused on real estate investing mostly but am in the works of starting my own marketing company. I am always excited to meet other people with open minds who are willing to work together to expand ourselves and our networks.