Advice on my first deal aside from my house hack!

4 Replies

Hey there everyone, so I have my first creative deal I’m putting an offer on and would love a bit of input. The deal is in Peterborough, Ontario and this is scenario 1. $150,000 of private money at 7% and $125,000 of seller financing at 5%=$1654/m payment with $846 expenses. Now here is my question, I have taken my vacancy (5%) Cap X (3%) and repairs (5%) which was a $318 total and cut them to $150 for the first year until I refinance. So that’s 1654+678=2332. Monthly income is 2450 which with scenario 1 leaves me with $118 cash flow but gets me into this deal with zero money down. After year one once I refinance @4% I bumped the number back to the percentages given above which works out to expenses $846+1297=2143 for a total of $257 cash flow. ARV is 340 which was on a low end for refinance leaves me at 272,000 for bank to refinance and have to put zero dollars down to do so. What do y’all think?

Anything that will cashflow and is in ok shape and you can get for ZERO dollars in - I would go ahead barring any unexpected issues.  Ensure you get a home inspection.

@Roy Cleeves thank you, it is a friend of mine that has a problem tenant and closing will be after the courts decision. He has already agreed that he likes the idea. Bonuses for him is he still gets a piece every Month until the refinance plus gets to split up his capitol gains over a couple years. I just have to present the deal to him and he weighs the options with his wife.

Nicely crafted - those bonuses for them should make it work out well.