All Forum Posts by: Geren Knight III

Thank you, everyone.  The only information I currently have is what they sent me in an email.  I do not have any paperwork yet.  I am going to talk to my attorney and have them draw up a contract if this is the path I take.  The total of $320k does not seem right.  I may be misreading their email.  

I haven't had much experience with owner financing as the seller.  I just received an offer on a property that I am selling for $178k.  The offer is "owner financing at $20k a year for six years and then a balloon payment of $200k".  As the seller what are the risks and does this seem "too good"?  The asking price is $178k this would be $320k?  Is that correct?

Investment Info:

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

Purchase price: $43,000
Cash invested: $87,000
Sale price: $180,000

This is a 1904 duplex with three bedrooms and 1.5 baths on each floor. This house has been completely renovated. This is a great opportunity to house hack. Live on the first floor and rent out the second floor to pay for your mortgage. The house is currently in the final stages of the renovation.

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

The size and style of this house along with the neighborhood made it a great investment opportunity.

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

This property was listed on a popular real estate site. I scheduled the walk through with the owner. Due to the amount of visual damage, I offered him 25% of market value based on area comps. We negotiated back and forth a couple of times. He repaired some damage and we settled for around 27% of market value.

How did you finance this deal?

The project was financed through a HELOC, construction loan and independent investors.

How did you add value to the deal?

The house has been completely rewired and upgrade to 200 amp service. All of the plumbing has also been updated. The house has a new front porch, new rear deck and new windows and siding. Two additional bathrooms have been added, one on each floor. All structural damage was demolished and rebuilt. New walls and floors were added where needed.

What was the outcome?

The value of the property is now in align with comparable homes in the area based on size and style.

Lessons learned? Challenges?

This house had major structural, electrical and plumbing issues that needed to be completely rebuild/replaced. The main lesson learned on this project was not to underestimate the amount of damage or repair required. What you can see may only be 50% of what the real damage is once the walls are down.

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

I did not use an agent on this property.

Investment Info:

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

Purchase price: $43,000
Cash invested: $77,000
Sale price: $180,000

This is a 1904 duplex with three bedrooms and 1.5 baths on each floor. The house has been completely rewired and upgrade to 200 amp service. The electric is split with two separate meters. All of the plumbing has also been updated. The house has a new front porch, new rear deck and new windows and siding. The roof is four years old. This house has both front (street) and rear parking. This is a great opportunity to house hack. Live on the first floor and rent out the second floor to pay for your mortgage. The house is currently in the final stages of the renovation.

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

The size and style of this house along with the neighborhood made it a great investment opportunity.

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

This property was listed on a popular real estate site. I scheduled the walk through with the owner. Due to the amount of visual damage, I offered him 25% of market value based on area comps. We negotiated back and forth a couple of times. He repaired some damage and we settled for around 27% of market value.

How did you finance this deal?

The project was financed through a HELOC, construction loan and independent investors.

How did you add value to the deal?

The house has been completely rewired and upgrade to 200 amp service. All of the plumbing has also been updated. The house has a new front porch, new rear deck and new windows and siding. Two additional bathrooms have been added, one on each floor. All structural damage was demolished and rebuilt. New walls and floors were added where needed.

What was the outcome?

The value of the property is now in align with comparable homes in the area based on size and style.

Lessons learned? Challenges?

This house had major structural, electrical and plumbing issues that need to be completely rebuild/replaced. The main lesson learned on this project was not to underestimate the amount of damage or repair required. What you can see may only be 50% of what the real damage is once the walls are down.

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

I did not use an agent on this property.

Here are a few of the improvement photos.  We aren’t finished yet.

No, I am holding it as a rental.

Investment Info:

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

Purchase price: $43,000
Cash invested: $77,000

100+ year old multi-family house on Cumberland’s West side. Required major renovations, Including structural rebuilds, rewiring and re-plumbing.

@Steve Morris thank you!  That is good advice.  I have an atty lined up.

I just got a verbal from a homeowner on purchasing their property.  Where is the best place I can get a contract form?  We are not using a realtor in the purchase.  Are there any other forms needed or lessons learned?

Does anyone have mobile home rentals in 55+ communities? Are they consider a “good” investment?