Investment Info:
Townhouse private money loan investment.
Purchase price: $160,000
Cash invested: $42,000
I started my journey to purchase Tiki Dr for my Airbnb property by searching for the perfect location. This involved a combination of online listings, help from a real estate agent, and exploring various neighborhoods. Once I found a potential property, I had to evaluate it carefully, considering factors like its location, size, condition, and rental income potential.
One significant challenge I faced was obtaining financing. Going through a bank would have added an extra $8,000 to the closing price due to various reasons like my credit history or the property's condition. Fortunately, I was able to find a solution. The seller was open to providing financing to facilitate the purchase. This seller-provided financing turned out to be a crucial turning point in my journey.
After negotiating terms with the seller and agreeing on the financing details, we proceeded to draft a purchase agreement. This legally binding document outlined all the terms and conditions of the sale, including the specifics of the seller-provided financing.
With the financing arrangement in place, I had to complete my due diligence. This included property inspections, title searches, and necessary paperwork to ensure there were no hidden issues or complications with the property.
To prepare for the closing, I needed to secure the necessary funds for the down payment and closing costs. This involved transferring funds to an escrow account.
On the closing day, all parties involved, including the seller, real estate agents, and any attorneys, gathered to finalize the transaction. I signed the required paperwork, which included the financing agreement, and made the necessary payments. At that moment, ownership of the property officially transferred to me, and I received the keys.
After the purchase, I got to work setting up the property for Airbnb rentals. This involved furnishing the property, creating listings, and ensuring compliance with local regulations and safety standards. Overall, the seller-provided financing was a critical factor in overcoming the financing challenge and making my Airbnb investment a reality without the added cost of traditional bank financing.
What made you interested in investing in this type of deal?
I was interested in investing in this deal because Airbnb properties can generate rental income, and the location of Tiki Dr seemed promising for this purpose. Additionally, the seller-provided financing made the deal more appealing and accessible.
How did you find this deal and how did you negotiate it?
I found this deal through a real estate agent who had listings in the area I was interested in. Negotiations involved discussing terms directly with the seller, including the seller-financing details, and reaching an agreement that suited both parties.
How did you finance this deal?
I financed this deal through seller-provided financing. Instead of obtaining a mortgage from a bank, the seller extended a loan to me to facilitate the purchase. This helped me avoid the additional costs associated with traditional bank financing.
How did you add value to the deal?
I provided additional furnishing to enable the desirability of the property
What was the outcome?
The outcome of the deal was successful. I acquired the property on Tiki Dr for my Airbnb investment with the help of seller-provided financing, which allowed me to avoid the extra costs associated with traditional bank financing. I subsequently set up the property for Airbnb rentals and began generating rental income.
Lessons learned? Challenges?
Some lessons learned from this experience include:
Seller-provided financing can be valuable when traditional bank financing is challenging or costly and conducting thorough due diligence is crucial to avoid potential issues with the property.
Challenges included: Initially, obtaining financing through a bank posed a significant challenge due to added costs and negotiating the terms of the deal, including seller financing, r
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, I worked with Jake Sostheim from The Corcoran Group, and I would recommend him to others based on my positive experience.
