All Forum Posts by: Ben Scott

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $98,000
Cash invested: $3,000

Owner finance option where I have equitable interest in property. My cash flow is minimal but I purchased at a good price and have instant equity.

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

I'd been interested in this area as a buy and hold. The home next door had been remodeled and the home I purchased was in good condition. This home gave me an equitable interest in a property without a ding on my debt/income ratio.

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

This is an old school company that buys homes at the tax sale, fixes them up and sells them owner finance to high-risk buyers with bad credit. The sale price was fixed but it was a good price for the area and condition.

How did you finance this deal?

This was owner finance. Owner owns the home free and clear. Term is 20 years at 10 percent (yikes). I put $3k down and owner financed the $95k balance

How did you add value to the deal?

I purchased an oven and had the home professionally cleaned. Then I found a tenant.

What was the outcome?

My mortgage is $917/month. I have to pay taxes and insurance. My rent is $995. Do I have cash flow? No. But I believe the home is worth $120k. And I'm accepting I won't make money on this home for several years while I build equity.

Lessons learned? Challenges?

I wanted to find an owner finance deal where I could have a tenant pay my mortgage. I've accepted the reality there is no cash flow. I'm in this particular deal for the appreciation.

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

No. I'm an agent and I represented myself.

I own or manage 11 doors in OKC and I haven't had one person not pay due to Covid. A few will pay half on the 1rst and half on the 15th. But no one has refused to pay. These homes are A and B class though.

Midwest City is a safe place to own real estate, especially rentals, because there will always be demand thanks to Tinker Air Force base. I haven't done anything in the Mid-Del area. Del City (just south) can be spotty but glad to see you hit a home run in Midwest City.

Awesome @Simon Schermerhorn, what part of OKC was this home?

Hey @Cody Spaulding, like all the other folks on the thread, I enjoy working with investors. Best part of my job. A few of which I met on Bigger Pockets. Let me know if you'd like to grab coffee.

Password is: pockets. Local and out of state investors getting together virtually to discuss the Oklahoma City real estate market. All are welcome. 

Congrats on starting the journey. With eviction moratoriums and COVID, I imagine there are tired landlords in your market. If you can identify any that own a property free and clear, you could negotiate an 'owner finance' deal. You create a note and mortgage with the owner. Then restrictions are much less than with a bank. Acceptable down payments are 5-10%. Interest rate one above prime. Most tired landlords just want the cash flow, that check coming in every month.  If you take on owning and managing the property, you can pay off your debt with minimal cash down and no ding on your credit. I'd start with your personal network and identify any in your sphere of influence that fit that criteria.

NEW LINK TO VIRTUAL MEETING. If you joined past calls, please note the link has changed. Local and out of state investors are welcome for a round table discussion on real estate in the Oklahoma City market.

I'm sorry you're having to go through this. Did you have an agent representing you on the purchase? Your agent should get a form signed to release the earnest money. There should be language in either the contingency form or the VA loan addendum allowing you retrieve your earnest money.

Bi-weekly real estate meet up to discuss the Oklahoma City market. All are welcome. Local and out of state. Just like minded folks getting together over the internet to discuss OKC real estate.