All Forum Posts by: Hoa Nguyen

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $121,000
Cash invested: $5,000

Bought my first turnkey rental property using the owner financing method. The seller had already paid off the home and was looking to sell for $110000. The home was recently renovated and updated. After running comps in the area, I found that it was very undervalued. The comps ran about 125-130k. Keeping that in mind, I offered $121k with $5k down and all I asked was an owner financing balloon of 7 years at a 3% interest rate amortized over 30 years. The higher bid price is what made the seller consider owner financing over a traditional sale. With interest rates continuing to rise around the 6% and above range, the real prize of this deal was being able to negotiate that 3%.

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

Reading 0-75 Units in Year by The Kwak Brothers, and understanding what they call the FORCE method of investing.

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

Found on Facebook Marketplace

How did you finance this deal?

Owner Financing

How did you add value to the deal?

After noticing it was undervalued, I offered a little bit more in exchange for the financing terms I desired. Still making sure I was getting a deal on the purchase price ;)

What was the outcome?

Got an already updated rental with little money down and a lower than market interest rate

Lessons learned? Challenges?

- Negotiate your terms
- When seeking owner financing, owner is more willing if the home is paid off and isn't residing in it
- Find title companies willing to draft up a mortgage note for owner financing now, instead of searching while negotiating a deal

I love this because I just welcomed our firstborn daughter and am already planning to include her in my business when the time comes.
The term "partnering" really has weight on if the person you partner with brings something to the table value-wise. Does this deal require your child's partnership financially, or can you manage without them if need be? I personally would never go into business with my child if I knew it could fall through on them. I would love to teach them the ropes, show them the benefits of investing and partnering, and hopefully lay down the ground for them to invest on their own or seek their own partnerships. 

As for your question on how to start a partnership. Sit down with your partner-to-be and delegate terms. Is it 50-50 split with equal responsibilities? Is the partner just contributing financing towards renovations? From there layout the expectations of all parties. 

All partnerships are unique! And the terms and how you go about it are up to you and who you choose as a partner, whether that be your child or someone else! 

Hope this helps! 

It is important to realize that every investment is different. And the approaches to financing those investments are also different. 

With vacation rentals, in particular, you most likely won't qualify for residential-based loans like FHA, VA, or Rural. As they are designed for you to live in the home that you buy.

I advise against personal loans simply because of how high the interest rates tend to be and how much collateral they tie the loan to.

If you are totally against seeking private investor help, my suggestion would be two things:

1. The standard conventional loan. 20% or more down.
2. Contact local banks in that area, pitch your business plan, and see if they are willing to come up with a custom loan for your situation. A lot of times these come in form of a 7 year balloon loan, just make sure to refinance into a 30 year fixed before that 7 years is up. 

Local public events sponsored by brokerages are a great option. Community-driven brokerages like Keller Williams or EXP will often host monthly public education and connecting events. I find that these events are great oppurtunites to grow you sphere in regards to real estate professionals. You'll meet other investors, agents, contractors, lenders, and more! 

Outside of that, many cities and counties will have investor groups on Facebook. Just search " _________ City investors"

Growing your network relies on you taking the steps to get out there! 

Look for areas where renovations and fix n flips are happening. I would argue that 90% of buyers who buy from wholesalers do so with flipping in mind. Also keep in mind that some states are starting to implement licensing requirements for wholesalers (at that point just become an agent).

 from your point of view, what percentage on return would you want if you invested with me? I understand that every investor and scenario are different, but I am trying to get a range of opinions. 

Hey everyone! Been brushing up on some creative financing and funding options and one of the number one things I hear is "Seek privat funding. Don't be afraid to ask a partner or fellow investor"

But rarely do I hear what incentive to offer. Those who have gotten one or more investors to invest in you, what do you offer them in return?

 unfortunately, never got that financing. That's life, on to the next! 

I did end up having a conversation with my managing broker and she said as long as I don't use my local realtor association's forms and don't request any kind of commission on the sale, I am good to go! 

@Stephen Jones

Depending on the college, I wouldnt say dead, but highly competitive. In many cases you are not only competing with other investors, but also the schools who purchase properties for student housing. I am realtor, and just had a listing that was a 3 min walk from campus. The school outbid all other offers by almost 35k. Great for me, but sucks for the other offers.

If you are looking to invest in those markets, door knocking and looking for deals off the MLS would be your best bet.