Update on First Seller Finance deal.

[Jamie O'Connell]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Elmira.

Purchase price: $70,000
Cash invested: $10,500

This was my first of two Seller Finance deals so far. I bought the 2 unit (up/down) 2 bed in each unit for $70,000. I put $10,000 down with a one year Seller Finance note and put another 22k into rehabbing it. I turned both units into 3 bedroom units by turning a second living room in each unit into a third bedroom which raised the FMR by $400 for each unit. I took the property to my local Credit Union and it appraised for $121,000 and I could take out 70% of the value so I paid off the original loan and got reimbursed exactly $30,000 so I essentially only "put" $2,000 into the unit that now brings in $2,700 a month.

How did you add value to the deal?

Rehabbed both units and turned one of the two large living rooms into a legal bedroom in each unit.

Lessons learned? Challenges?

1 year might be TO short for a seller finance. In theory its enough time but once you get tenants out, rehabbed, new tenants in, the time for appraisal and bank to do work and most importantly your taxes done if it falls towards the end of the year. Waiting on my 2024 taxes ended up pushing me to the deadline. I would definitely suggest atleast a 2 year SF loan with no prepayment penalty just to give yourself some time.