I bought a turnkey duplex with $0

Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

2y

@Adam DeShone. Well done, congrats! There are two big “kickers” in this deal that demonstrate the get rich with low risk real estate strategy. First of course is the modest cash flow along with the note amortization. But the potential big kicker would be from value appreciation in an area undergoing “revitalization” or gentrification. You set yourself up very well to take advantage of both and with “no money down”. Nice

Private Mortgage Financing Partners, LLC

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

JLH Capital Partners51 Review

4 Reply

James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

2y

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @James Wise:

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

Yup! It was a credit union, so they hold their own portfolio of properties. Since I had done past deals with them and the numbers penciled out, they approved.

As far as the late fees, Indiana has no statutory limits, and you can set them to what you like. We have every tenant initial right next to the amount, so they are fully aware. With the intent of incentivizing timely payments.

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Don Konipol:

@Adam DeShone. Well done, congrats! There are two big “kickers” in this deal that demonstrate the get rich with low risk real estate strategy. First of course is the modest cash flow along with the note amortization. But the potential big kicker would be from value appreciation in an area undergoing “revitalization” or gentrification. You set yourself up very well to take advantage of both and with “no money down”. Nice

Thanks Don!

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Adam DeShone:

Quote from @James Wise:

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

Yup! It was a credit union, so they hold their own portfolio of properties. Since I had done past deals with them and the numbers penciled out, they approved.

As far as the late fees, Indiana has no statutory limits, and you can set them to what you like. We have every tenant initial right next to the amount, so they are fully aware. With the intent of incentivizing timely payments.

And yes, it appraised for $160,000 with a different bank in March 2023, when I was getting approved for a loan.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Adam DeShone:

Quote from @James Wise:

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

Yup! It was a credit union, so they hold their own portfolio of properties. Since I had done past deals with them and the numbers penciled out, they approved.

As far as the late fees, Indiana has no statutory limits, and you can set them to what you like. We have every tenant initial right next to the amount, so they are fully aware. With the intent of incentivizing timely payments.

thanks for clarifying .. that is a heck of an incentive. out our way that would not be legal.

JLH Capital Partners51 Review

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Jay Hinrichs:

Quote from @Adam DeShone:

Quote from @James Wise:

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

Yup! It was a credit union, so they hold their own portfolio of properties. Since I had done past deals with them and the numbers penciled out, they approved.

As far as the late fees, Indiana has no statutory limits, and you can set them to what you like. We have every tenant initial right next to the amount, so they are fully aware. With the intent of incentivizing timely payments.

thanks for clarifying .. that is a heck of an incentive. out our way that would not be legal.

You’re welcome. Indiana is pretty landlord-friendly.

Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

2y

No way cap/ex/vacancy/reserves on a duplex is only $200 a month id bump that up significantly but nice if its working. Also agree above not sure $50 late fees are legal but neither was this deal either unless bank crazily actually approved seller paying your full downpayment lol ive never seen that allowed.

Michael Thach

Member since 2019 · 144 posts · 93 votes

2y

Wow, Seller paying full downpay is new to me. Usually is only 3% of purchase price which can be gifted or claimed as sellers contribution. Can you share how you, the lender and the seller discussed about the downpay coming from the seller ?

But congrats regardless, it's a real present. I would take deals like this everyday.

Eric James

Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes

2y

Quote from @Jay Hinrichs:

Quote from @Adam DeShone:

Quote from @James Wise:

Quote from @Jay Hinrichs:

Quote from @James Wise:

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Did the bank appraisal come in at $160k?

is 50.00 a day late fee even legal ??? And the bank approved a seller second behind them with no cash from you it appears ?? that's a pretty aggressive bank.

Agreed. I've had banks do the seller provided 2nd on some apartment buildings I bought, but I've never seen one do it on such a small asset like this.

Yup! It was a credit union, so they hold their own portfolio of properties. Since I had done past deals with them and the numbers penciled out, they approved.

As far as the late fees, Indiana has no statutory limits, and you can set them to what you like. We have every tenant initial right next to the amount, so they are fully aware. With the intent of incentivizing timely payments.

thanks for clarifying .. that is a heck of an incentive. out our way that would not be legal.

Even here in TX we couldn't charge that much of a late fee, legally. Though some property managers aren't aware of the law.

Eric James

Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes

2y

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

When you do a partial owner finance like this, does the seller's note get file as secondary to the bank lien?

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Henry Lazerow:

No way cap/ex/vacancy/reserves on a duplex is only $200 a month id bump that up significantly but nice if its working. Also agree above not sure $50 late fees are legal but neither was this deal either unless bank crazily actually approved seller paying your full downpayment lol ive never seen that allowed.

You seem bitter. The deal happened legally, and late fees can be set to the landlord's discretion in Indiana. Thanks for the comment though.

Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

2y

Not bitter, its just clear you are either lying or doing things illegally. No bank will let you do that. In our state $50 late fees would not be legal, either way seems like a scummy way to do business probably why so many hate landlords now a days, if its legal all good but not how I run my business.

Tim P.

Real Estate Investor · NJ · Member since 2016 · 8 posts · 4 votes

2y

I feel like these type of deals overlook the value of your time time and energy. $2,400 per year cash-flow... it's so little... even if you bought 20 of these you'd be at $48,000/year... just doesn't seem worth it. Duplexes are not passive income, and one major repair will eat your entire year's cashflow. More money would come from a raise at work or bartending on the weekends. I don't mean to be cynical, if you love real estate, I'd just suggest you chase higher $$$ properties so that you get rewarded for your efforts.

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Henry Lazerow:

Not bitter, its just clear you are either lying or doing things illegally. No bank will let you do that. In our state $50 late fees would not be legal, either way seems like a scummy way to do business probably why so many hate landlords now a days, if its legal all good but not how I run my business.

I’m not going to argue with you. Good luck man.

OP

Investor · Northern Indiana · Member since 2024 · 25 posts · 27 votes

2y

Quote from @Tim P.:

I feel like these type of deals overlook the value of your time time and energy. $2,400 per year cash-flow... it's so little... even if you bought 20 of these you'd be at $48,000/year... just doesn't seem worth it. Duplexes are not passive income, and one major repair will eat your entire year's cashflow. More money would come from a raise at work or bartending on the weekends. I don't mean to be cynical, if you love real estate, I'd just suggest you chase higher $$$ properties so that you get rewarded for your efforts.

I respect that opinion! There is also appreciation (gentrification area for this one), debt pay-down, and tax benefits of owning it outside of the cash-flow. Most of all, though, I think this deal shows new investors they can find deals with no or low money, get experience, and grow.

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Adam DeShone:

Quote from @Tim P.:

I feel like these type of deals overlook the value of your time time and energy. $2,400 per year cash-flow... it's so little... even if you bought 20 of these you'd be at $48,000/year... just doesn't seem worth it. Duplexes are not passive income, and one major repair will eat your entire year's cashflow. More money would come from a raise at work or bartending on the weekends. I don't mean to be cynical, if you love real estate, I'd just suggest you chase higher $$$ properties so that you get rewarded for your efforts.

I respect that opinion! There is also appreciation (gentrification area for this one), debt pay-down, and tax benefits of owning it outside of the cash-flow. Most of all, though, I think this deal shows new investors they can find deals with no or low money, get experience, and grow.

I suspect new investors with limited funds would ever get a bank or credit union to allow a second like this and no money into the deal. that violate most banks lending criteria big time.. I mean I have pretty substantial relationships with my commercial banks 8 figure construction loans and no way would they give me 100%.. And of course i would never even bother to ask for it.. as I dont like fully levered real estate there is no exit other than stroking a check if you have to exit in a few years. But anyway you have the relationship and it works for you so thats all cool but to suggest others starting out with limited funds can do what you just did I dont think that is reality.

JLH Capital Partners51 Review

Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

2y

Yeah we just didn’t tell the bank about the silent 2nd.

Why people post these “success stories” I don’t get it. What is possibly to gain?

Gimer Law516 Reviews

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Tom Gimer:

Yeah we just didn’t tell the bank about the silent 2nd.

Why people post these “success stories” I don’t get it. What is possibly to gain?

silent second is a trick us builders use LOL. Most banks have rules of the road that loan committee sets out and generally one of the major rules after the GFC is NO 100% financing and investors MUST have a down payment in cash.. At least with all the banks I have used. Although I have never used a credit union but the ones out this way follow the same rules.

JLH Capital Partners51 Review

David Cruice

Rental Property Investor · Raleigh, NC · Member since 2018 · 179 posts · 192 votes

2y

Congratulations on the deal, Adam. Ignore the naysayers slating your deal. You might not have hit a home run on this one, it's at least a decent RBI. Pat yourself on the back for moving the needle on your dreams. The more deals you do the better you and your deals will become. You've differentiated yourself from the other 95% of wannabe investors out there who never find the cojones walk the walk. Keep crushin' it!

Carrie Matuga

Lender · Riverside, CA · Member since 2017 · 248 posts · 98 votes

2y

@Adam DeShone That's outstanding that you were able to do this deal with 100% CLTV! While CF doesn't make this a HR, you have 0 invested and infinite returns! Awesome!

Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

2y

The real profits in real estate investing are made by price appreciation.

Private Mortgage Financing Partners, LLC

Kevin Greer

Member since 2023 · 1 post · 0 votes

2y

Quote from @Adam DeShone:

Investment Info:

Duplex buy-and-hold investment.

Purchase price: $130,000
Cash invested: $0

Acquired from a motivated investor moving out of state in late 2022, this duplex was turnkey upon closing. The previous owner was starting a new business and was ready to be done with real estate. We negotiated a 75% bank finance, 25% seller finance deal that required no money down at closing and no work needed, given it was turnkey. The total monthly PITI, including seller finance, is $1,200 a month. Both sides rent equal $1,600. After maintenance and property management, it cash flows ~$200 a month.

Being the property manager on the backend does have its perks. The tenants have never missed a payment, but being on time has been another situation. Last year, the property averaged nearly $2,000 a month in rent when you include late fees. We have an aggressive $50 a day charge beyond the 3-day grace period. The late fees are not something to rely on by any means, but they increased the property performance in 2023.

The market value is $160,000.

What made you interested in investing in this type of deal?

My current specialty is residential investing and managing the properties on the backend. Given this was a duplex in a developing area, my strategy was to buy and hold with cash flow. The fact that I could hit every box with $0 down and still have a good margin of safety made me jump all over it.

How did you find this deal, and how did you negotiate it?

This property was found on Zillow FSBO. He wanted the cash pop to help with his new business but liked the idea of monthly cash on the backend.

How did you finance this deal?

The bank loaned 75% on a 30-year fixed loan with a 15-year balloon. The remaining 25% was seller-financed on a 4% interest-only loan, ballooning at 10 years.

What was the outcome?

We now own a highly desirable duplex with instant equity, cash flow, and no money invested.

Hi Adam, congratulations on your duplex acquisition, I have an 8-unit deal in Chicago and I am looking for a lender or credit union that will allow for seller financing in a second lien position, do you mind sharing what lender or the credit union you used?