All Forum Posts by: Kyle Smith

Investment Info:

Single-family residence other investment.

Purchase price: $850,000
Cash invested: $15,000

Bought on owner financing on a 5 yr term. I then placed a tenant buyer who will buy from me when mortgage ready for $899,900. In the meantime they are responsible for all maintience and repairs and get any forced quity they put into it. The make monthly lease payments to me until the are mortgage ready within 24months.

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

Since interest rates went up, hard to find cash flowing deals so I had to learn the terms business. I then started a business buying homes on terms.

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

Referral.

How did you finance this deal?

Seller financing, no down payment. Monthly payments to seller of $1,500 a month with a ballon payment on or before the 5 yr term.

How did you add value to the deal?

I was a hoarder situation. I paid for the clean out and a deep cleaning of the home.

What was the outcome?

Found a tenant buyer who is just outside of financing. Put them on a mortgage ready plan to be ready to cash out within two years. I also left value add equity of a $100,000 for when they remadol. Just had a drive by appraisal and it was valued at $1,000,000.

Lessons learned? Challenges?

Ensuring all paperwork is complete with the county and to go down and handle it yourself as 3rd parties don't truly know all the details when filling with the county creating delays and correction on the title and deed.

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

I worked with my coaches at Smart Real Estate Coach (SREC). Real estate attorney, my tax advisor who truly understands creative financing - Paul Dion. I also have a mortgage (Solano Mortgage) company ready to go for when my tenant/buyers are ready to go get a loan.

Hey Cole, 

Welcome to Bigger Pockets. I also live in Vacaville, I buy homes on terms throughout the bay area and Sacramento valley. If you run into a situation where a home is not selling for some reason let me know, when buying on terms I can typically pay full price. Plus I pay a referral fee too realtors that can be close to the commission of what you were going to make selling it traditionally.  

Funny you mention Arkansas. I also buy long term rentals out of state and just put an offer on one in Arkansas.

I like using Niche as another search engine tool. On some of the bigger cities they will give you a heat map of the good neighborhoods versus the not so good. Thanks Conner Olsen for City data, have not heard about that one. I checked it out, I had good info on there.

Congrats job well done. 

Do you have a certain percentage overages you plan for the budget and time frame of the project? Such as plan for 10% over budget and 2 months longer than expected. Do you have a system to estimate a rough cost of the rehab prior to contractor bids to see if it's worth even pursuing the property, or do you rely solely on contractor bids?  How much are you cash flowing once stabilized with a renter? What was the reason for letting the contractor go and did you have another lined up already to keep the project moving forward? If applicable what was different about the second contractor? 

I am an out of state investor as well and looking into performing BRRR strategies remotley and trying to figure out a system for myself. As cash flow margins decrease with home prices and interest rates increasing, I figure this may next best way to stair step to financial freedom.

Thanks for sharing.

@Jesse Richardson Congrats on the retirement from the Air Force and thank you for your service. Being a local Vacavillian (if that's even a word). I just wanted to say high and congrats. While I am investing out of state at this time maybe our paths will cross around town. Have a good day. 

@Jesse Richardson Congrats on the retirement from the Air Force and thank you for your service. Being a local Vacavillian (if that's even a word). I just wanted to say high and congrats. While I am investing out of state at this time maybe our paths will cross around town. Have a good day. 

My buddy just bought a second home in Vacaville, Browns Valley area. He's going to rent his original as a rental. Its's also in Browns Valley. He had no problem finding renters from the base. If you end up purchasing in the area. Let me know, I can get the contact list he used to reach out to the Air Force Personnel.

I would look in Vacaville. I think it's kept up nice. I don't notice as much riff raff as Vallejo or Fairfield. Plus less trash on the streets and the homeless are less visible. A lot of Cops and Firefighters live in Vacaville. Theres a reason they choose to live in certain areas.We also have Travis Air Force base which provide good tenants. The people in the Air Force usually look for places to live in Vacaville first, before Fairfield.  If your looking in Vacaville, Browns Valley and North Vacaville are hot spots to own. I would also look at Dixon. It's a smaller city that is just up the road and growing. It's also clean compared to Fairfield and Vallejo. I can't speak to the other cities you listed as I don't spend much time there. This is perspective from someone who has lived in the area for 40yrs. Hopefully this helps have a good day.

@Blake H. Congrats on your first purchase. I am in a similar boat as you, completing the process of buying my first rental property. Thanks for the tip on the appraisal contingency, I will keep that in mind on the next one. Happy New Year.

Dmitry Fomichenko Thank you!