I love creative finance!

[Russell Lavoie]

Investment Info:

Single-family residence buy & hold investment in New Bedford.

Purchase price: $110,000
Cash invested: $980

I purchased a person residence, which appraised as is for $90,000 more than I paid for it. The A.R.V. for the property is $220,000. I plan on putting about $30,000 into the property and investing (BRRRRing) with the equity I gained through the transaction. As a matter of fact thanks to creative financing, I brought $980.00 to the closing and walked out with a check of $30,000!

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

I wanted to make sure my dads house (rented) didn't get taken away due to back taxes.

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

My uncle owned the property with a small mortgage left on it. When I went to visit him I noticed a Housing Court noticed posted on his door. With a little research I found that he had not paid taxed on the property in 7 years and it was a about $25,000 due. My uncle is not well physically, he's on dialysis and a diabetic he did not even care to open the notice. We haggled back and forth just because he could ( he really doesn't care about the money) and we agreed to $80,000.

How did you finance this deal?

With a gift in equity from my uncle. He agreed to sell the property for 80,000 and then I was gifted my 20% down. Basically the contract read that I bought the house for 143,480, but my loan amount is for $110,000. That's is the $80,000 for the property and the $30,000 the I borrowed to rehab the house. I had rented in this property for 6 years and never thought buy it until I was financially educated.

How did you add value to the deal?

I will remodel the kitchen and bathroom. (both stuck in the 1970's) Refinish the original hardwood floors (house was built in 1874), and semi finish and add a bathroom in basement. Roof, windows, a fence and some landscaping.

What was the outcome?

I will end up with about $100,000 in equity that I will put to work with the BRRRR strategy. I moved out of my 3 family I was house hacking back into a single family that I will design to fit my families needs. My uncle paid off the mortgage and his tax lien and has now freed up $400 a month he was spending on the property and has $50,000 more in his bank account I call that a win win!

Lessons learned? Challenges?

I have more of a network than a knew of. And the challenge is to do my first full rehab with my family living in the house! (before and after pics will definitely get posted somewhere on BP)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Caliber Home Loans, was an amazing asset through the entire process as well as Patrick Walsh the Agent who represented both sides in the transaction. Both understand investing and were there for any questions I had. Will definitely be working with them again soon.