2nd Contract for Deed – Bluffdale, Utah (2.375% Fixed Rate, A-Class Townhome)

Salt Lake City, Utah
Creative Real Estate Financing
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2nd Contract for Deed – Bluffdale, Utah (2.375% Fixed Rate, A-Class Townhome)

Nicholas Stevenson
New to Real Estate · Salt Lake City, UT · Member since 2022 · 17 posts · 9 votes

I’ve been building a portfolio through creative financing and just closed on my second Contract for Deed deal. This one is a newer build townhome in an A-class Bluffdale neighborhood — great location, newer construction, and easy to manage long term.

Property Overview
Property Type: Townhome – newer build, A-class neighborhood
Purchase Price: $480,000 (market value)
Down Payment: $70,000
Underlying Loan Balance: about $410,000
Interest Rate: 2.375% fixed through December 2051
Loan Start: December 2021
Monthly P&I: $1,755
Taxes/Insurance (Escrow): $470
Total PITI: $2,225 per month
Rented: $2,495 per month
Serviced through Escrow Specialists
Protection: Recorded Notice of Interest on title

Why I Bought It

This isn’t a big cash-flow play — it likely breaks even after reserves — but the rate was too good to pass up. I bought it at roughly market value for the long-term debt and strong area fundamentals.

At this stage of the amortization schedule, the loan is paying down around $11.5K in principal each year. Assuming just 3% annual appreciation adds another $14–15K, that’s roughly $26K in annual equity growth. On only $70K invested, that’s about a 37% return on equity before even considering depreciation.

In other words, even without big monthly spread, the leverage efficiency and debt structure make this a solid long-term wealth builder I believe, please feel free to correct me if I'm wrong. I want to know if my thought process is right or wrong.

Deal Summary

• Purchase price: $480K
• Down payment: $70K
• Underlying loan: ~$410K at 2.375%
• PITI: $2,225/mo
• Market rent: ~$2,495/mo
• No balloon or prepayment penalty

Big Picture and Questions

This is my second creative-finance property using a Contract for Deed. My focus right now is trying to figure out how to scale, I want to hit a 10 million dollar portfolio of cheap debt. 

For those who have scaled using CFDs or subject-to deals:

  • Are you partnering with others to grow faster?

  • How are you structuring profit or equity splits when bringing in capital partners?

  • Do people even want to be apart of these deals?

  • Any Utah investors here successfully refinanced or assigned CFDs later down the line?

Would love to connect with others building creative-financed portfolios in Utah County and along the Wasatch Front.

— Nicholas Stevenson

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
10mo
Quote from @Ethan Whaley:

Wish I had examples to share. I like the terms. And rent should continue to increase. How confident are you that it will appreciate 3%? I've heard townhomes don't appreciate nearly as much as SFH.

Have you added vacancy and repair to your monthly expense?


I agree. Townhomes will hit a "max" value just like condos do. What I wonder is if they took capex into account and increasing HOA fees as well. I would not calculate that as a ROE as you are not seeing that money until the deal closes. The interest you can book and that is 15% based on the investment of paydown which is good, but if you also have vacancy etc and turnover costs, my guess is that would eat into 30%+ of the Principal paydown. Still not "bad" but I think 37% is the rosiest of rosey pictures which most people never achieve.

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  • Ethan Whaley
    Member since 2025 · 14 posts · 9 votes
    10mo

    Wish I had examples to share. I like the terms. And rent should continue to increase. How confident are you that it will appreciate 3%? I've heard townhomes don't appreciate nearly as much as SFH.

    Have you added vacancy and repair to your monthly expense?

    0Reply
    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      10mo
      Quote from @Ethan Whaley:

      Wish I had examples to share. I like the terms. And rent should continue to increase. How confident are you that it will appreciate 3%? I've heard townhomes don't appreciate nearly as much as SFH.

      Have you added vacancy and repair to your monthly expense?


      I agree. Townhomes will hit a "max" value just like condos do. What I wonder is if they took capex into account and increasing HOA fees as well. I would not calculate that as a ROE as you are not seeing that money until the deal closes. The interest you can book and that is 15% based on the investment of paydown which is good, but if you also have vacancy etc and turnover costs, my guess is that would eat into 30%+ of the Principal paydown. Still not "bad" but I think 37% is the rosiest of rosey pictures which most people never achieve.

      7e investments53 Reviews
      WebsiteView Page
      1Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    10mo
    Quote from @Nicholas Stevenson:

    I’ve been building a portfolio through creative financing and just closed on my second Contract for Deed deal. This one is a newer build townhome in an A-class Bluffdale neighborhood — great location, newer construction, and easy to manage long term.

    Property Overview
    Property Type: Townhome – newer build, A-class neighborhood
    Purchase Price: $480,000 (market value)
    Down Payment: $70,000
    Underlying Loan Balance: about $410,000
    Interest Rate: 2.375% fixed through December 2051
    Loan Start: December 2021
    Monthly P&I: $1,755
    Taxes/Insurance (Escrow): $470
    Total PITI: $2,225 per month
    Rented: $2,495 per month
    Serviced through Escrow Specialists
    Protection: Recorded Notice of Interest on title

    Why I Bought It

    This isn’t a big cash-flow play — it likely breaks even after reserves — but the rate was too good to pass up. I bought it at roughly market value for the long-term debt and strong area fundamentals.

    At this stage of the amortization schedule, the loan is paying down around $11.5K in principal each year. Assuming just 3% annual appreciation adds another $14–15K, that’s roughly $26K in annual equity growth. On only $70K invested, that’s about a 37% return on equity before even considering depreciation.

    In other words, even without big monthly spread, the leverage efficiency and debt structure make this a solid long-term wealth builder I believe, please feel free to correct me if I'm wrong. I want to know if my thought process is right or wrong.

    Deal Summary

    • Purchase price: $480K
    • Down payment: $70K
    • Underlying loan: ~$410K at 2.375%
    • PITI: $2,225/mo
    • Market rent: ~$2,495/mo
    • No balloon or prepayment penalty

    Big Picture and Questions

    This is my second creative-finance property using a Contract for Deed. My focus right now is trying to figure out how to scale, I want to hit a 10 million dollar portfolio of cheap debt. 

    For those who have scaled using CFDs or subject-to deals:

    • Are you partnering with others to grow faster?

    • How are you structuring profit or equity splits when bringing in capital partners?

    • Do people even want to be apart of these deals?

    • Any Utah investors here successfully refinanced or assigned CFDs later down the line?

    Would love to connect with others building creative-financed portfolios in Utah County and along the Wasatch Front.

    — Nicholas Stevenson

    Nicholas, this example brings up an interesting fact: many investors only like deals (investments) where they have a significant cash flow as the dominate part of their ROI.
    Here is a situation where an interest rate 3 + points BELOW market allows for WEALTH ACCUMULATION, but just not thru cash flow.  Wealth accumulation can be thru cash flow, mortgage amortization, value (price) appreciation, and or below market purchase price / above market sale price. 

    You should obtain a copy of a book published 45 years ago “Invest in Debt” by Jimmy Napier and a book still available on Amazon, Swapping Real Estate for Fun and Profit by Paul Kelley.  There’s TREMENDOUS opportunities in RE investing for those like you that look beyond immediate cash flow. 
    Private Mortgage Financing Partners, LLC
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