How did you find and structure the financing of this deal?
This is another owner financed deal. We put $1000 earnest money on this one to lock it up. The owner was willing to finance $65,000 at 5% amortized over 20 years with a balloon payment after year 5. We put a private money lender in second position. The pm brought $25,000 to the deal on a six month note at a flat 5%. We walked away from the table with a check for $5637 and deed to the property. It will rent for $1100/mo. If we put an apartment in the basement it should rent for $440/mo. Cash flow without the second unit will be $8110/yr
Provide a summary of the repairs and improvements you made to the property.
We will put a new counter top and a couple extra cabinets in the kitchen and paint. Should be around $1200 in improvements.
If we add a basement apartment, we will budget around$30,000 which includes a second furnace, duct work and split out the electrical meter.
What are some of the major lessons learned that you would like to share with other students that they can learn from?
Offering sellers owner financing is a must on all our deals. We can offer closer to their asking price. The profit is in the terms on these deals.
Shout Outs & Testimonials
Props to my Fortune Builders business partner Shane Taylor for staying on top of deals. CAW 2017!