Creative Land Contract Deal
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $70,000
Cash invested: $5,000
The seller would not budge on getting $70,000 for the house, but it really was not worth it. So, as the old saying goes, "my price, your terms/your price, my terms"
I put $5,000 cash down. $65,000 note with the seller on a 15 year amortization at 3.8% interest with a 5 year balloon. Right now, over 55% of my monthly payment goes to principal. Since I put this on a 15yr amortization with the seller on a 5 year balloon, it will be paid down quite a bit when the bank picks it up in 5 years and puts it on a 20yr am. I should be able to pull quite a chunk of cash out of it!
How did you find this deal and how did you negotiate it?
Drove for dollars for months, compiled a list of properties I would be interested in purchasing, and then sent out mailers. Negotiated with the seller for about 4 months. Unmotivated sellers do NOT move fast - which was fine because I was rehabbing another house and needed the cash anyways.
How did you finance this deal?
$5,000 down that I borrowed from a friend.
How did you add value to the deal?
The terms are the value!