Investment Info:
Single-family residence note investment investment in Uvalde.
Purchase price: $133,000
Cash invested: $3,000
Subject too purchase: $133,000 balance. $3,000 down.
Sold for $190,000 with $10,000 down. Owner finance $180,000.
About $50,000 equity on back end.
Cash flow about $550
What made you interested in investing in this type of deal?
The underlying loan had 18 years left so the principal pay down would be faster when I sell it on a new note.
Also, tons of equity.
How did you find this deal and how did you negotiate it?
I met a new friend at a Christmas party. Of course, one of the questions that is always asked is, "So what do you do?" It so happens that he had a good lead on a distressed seller.
How did you finance this deal?
I bought it subject too with $3,000 purchase.
How did you add value to the deal?
At first, I tried to help the seller by guiding her to clean and make minor repairs to the home so she can maximize and make money. I was too much for her to handle. Then I offered to do it for her and we could split it. She didn't want to deal with it. Then I offered to take it off her hands, take over payments and give her $3,000. She was very happy. On top of that, I handled getting her personal items to her from the house, some personal affairs, etc.
What was the outcome?
I sold the house as an owner finance deal. Wrapped the original note and collected $10,000 with about $550 cash flow. Plus, I have about $50,000 equity on the back end that keeps growing as time goes by. When the new owners refinance, I'll get that lump sum.
Lessons learned? Challenges?
Never not offer a solution based on how you would react if it were offered to you. In other words, the whole time, I was trying to find out how I could maximize the sellers profits when in reality, she didn't care about the money, she just didn't want to deal with the house period.
