Purchase Date: 12/17
The Deal:
The owner wanted $20,000 for the property. He was looking for a quick cash sale, and we were looking to expand out a portfolio after saving all of our current rent money. However, I was also looking for a car around the same time, but based on the book Rich Dad Poor Dad, I knew buying a house was the better financial move. However, the book tells a story about how Robert Kiyosaki was able to buy both, and that was my goal. I had found a brand new car with hail damage, and I was able to negotiate it down to $16,000 (original MSRP was $28,500). I was able to put $5,000 down on the car using a credit card, and then make monthly payments of $350 per month. I turned around and sold the property on a land contract deal for $59,999 and the new buyer paid about $550 a month for the property. I paid off the credit card used to purchase the car in the next 45 days or so, without ever carrying a balance AND I received cash back for the purchase. Then 10 months later the new property was not only paying for my car, but I was making $200 per month on the deal.
About 5 years after I sold the house to the buyer later it was in their best interest to sell the house, I paid the original buyer $3,000 to walk away from the deal and tear up our original contract. All told I am into the house for $28,000 (the roof and fee to tear up the contract), $5,000 for the car (which is now paid off) and I still own the house, which is now worth $70,000+ plus the car (which I still own, drive every day, and is still worth more than I paid for it). In addition, the previous buyer/tenant made every payment, was responsible for all repairs, taxes, and insurance, and I made cash flow.
How Did We Find The Property?
We found the property listed on Craigslist. The property was in rent-ready condition and we knew this was a property we were interested in, so we started negotiations with the owner right away.
How Did We Fund The Property?
We had saved up $15,000 and had started looking for an investment property. This house was slightly out of our reach, but we were able to negotiate a deal where we paid our entire $15,000 down and made 10 monthly payments on the remaining $5,000. The investor took this deal and ended up partnering with us on another deal about 9 months later.
How Did We Fix The Property?
About a year after we purchased the house we had to pay around $5,000 for a new roof to be installed, and later on, we paid around $1,000 to clean up and haul a bunch of trash that had been left at the property.