$800K multiple property deal for $15K down-seller financing

12 Replies

This post is to highlight the benefits of seller financing and building relationships with other landlords in your area.

Yesterday we closed on an $800k deal using seller financing with only $15,000 down. Details on the properties below.

1. Single family house near a college, previous owner bought it after it was in a fire last year, all new systems, basically new historic 100 year old house.

Purchase price: $195,000, $5000 down

Rented for $2000/month, monthly cashflow after expenses (including, taxes, vacancy, repairs etc) approx $350/month

2. Single family house across street from private college built in 2018.

Purchase price: $220,000, $5000 down

Rented for $2300/month, monthly cashflow after expenses (including, taxes, vacancy, repairs etc) approx $450/month

3. Duplex across street from private college built in early 2000s

Purchase price $380,000, $5000 down 

Rented for $4000/month, monthly cashflow after expenses (including, taxes, vacancy, repairs etc) approx $650/month


In Summary, $8300 in gross rents added and $1450 in monthly cashflow, hows that for cash on cash return!

We just want to show people that these deals are out there! Let us know what questions you have!

Cheers,

Rod

The stated monthly cash flow is about 10% of the total invested cash, meaning that the seller would have earned his $15,000 in about 10 months if he/she had not "sold" to you. Based on that, I assume he got pretty beneficial terms on this deal? May I ask what interest rate/loan terms you gave him?

Sounds like an incredible deal. Congratulations! How did you find this deal and did the seller offer seller finance or did you ask?

@Darius Ogloza i have done deals with this seller in the past at 6% interest, this one was at 5.5% due to size of deal, varying balloon payment terms, 30 year amortization. thats it, he mostly buys them rehabs them and also makes money on the back end financing, i have refinanced and cashed this particular seller on several properties within the first 1-2 years way before balloon payment is due.

@Rodrigo Barrera

Call me crazy, but $1450/month cash flow on properties that you now owe $785,000 doesn’t seem great to me. I cashflow more than that on 3 properties I own, and owe about $110,000 combined.

The amount of down money was great for sure.. I’m not sold on the amount owed vs cash flow.

@Matt M. i understand your point too but if we would have put down 20% ($160,000) they would would have cashflowed another $850/month.

I guess the point being that they still cashflow even when only putting $15000 down and 20-30 years down the road i have an extra $8-9k every month assuming rents stayed the same.

$800k that others will payoff for me.

@Rodrigo Barrera

Point taken and understandable, just a huge nut for me to fathom. But then again, $1450 cash flow on $15k isn’t bad either. I wish you luck sir!