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Hi-End Seller-Financing (2.875%) Rented $10k+ Cashflow per year

Posted by Dan B on August 10, 2022
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This opportunity is mainly suitable to:
  • Investor with many mortgages (or dislike working with lenders)
  • Investors that have cash but are having difficulties getting a mortgage at the moment
  • Experienced investors that are able to see the opportunity 
  • Investor in a 1031 exchange process 
  • Foreign investor
If you are a beginner investor – this is probably NOT a good fit for you.
The property
  • Metro Birmingham AL
  • 5 beds, 3 baths, 2582 sq ft, 2020 built, B rated schools, 2-car garage, ~9500 sq ft lot, $17/mo HOA
  • We've got a renter signed at $2500/month (lease for 2 or 3 years)
  • Note: a buyer from Canada backed out 48 hours before closing – which made this deal available to us
  • Note: SDI unique opportunity fee is $2500 in addition to normal transaction fees
  • Timeline – as fast as possible – this investment is being offered to other groups as we speak.
Financial Data
  • $430,000 purchase price
  • $160,000 Down payment
  • $270,000 financed fixed at 29 years at 2.875%
  • No closing costs or loan fees
Owner financing 
  • Basically, the owner is letting the new buyer pay off the existing debt at his rate and passing it down
    • In order to keep the current mortgage terms, title needs to under the current owner's name. 
  • Current note holder is allowing new buyer to take over
  • Seller had been living in the house for 2 yrs, and have met the demand of holding the mortgage for a mini of 12 months
  • Title to the property won't transfer until refi or sale – title stays w/ the current owner*.
  • PM will handle the mortgage payment to ensure mortgage is paid
  • Buyer will be added to the ins and mortgage as an additional interest party.
VERY IMPORTANT
*Since this is a seller financing with title held w/ the current owner (seller) we suggest working with a local real estate attorney to ensure your interests are protected under the circumstances. 

Call/email Simply Do It for more details or your specific questions


Download full analysis PDF
 

Property Specifications 1
 Bedrooms 5
 Bathrooms 3
 Square Feet 2582
 Year Built 2020
 Garage Size 2
 Schools Rating (on scale of A-C) B

  

Purchase Assumptions My Offer
Offer used for analysis $430,000
Suggested offer (low) $430,000
Suggested offer (high) $430,000
Asking $430,000
Market Value (after improvements) $435,000
Improvements (lower) $2,000
Improvements (upper) $4,000
Closing Costs $4,300
Mortgage Costs $0
Other Fees At Closing $2,503
Total Cost  $439,803

Financing Assumptions  
 Down Payment (%) 37%
 Down Payment Amount $160,175
 Financed Amount $269,825
 Interest Rate 2.875%
 Mortgage Term (Years) 30
 Monthly Mortgage Payment $1,119
 Cash Outlay (Total Out of Pocket) $169,978

Financial Assumptions Monthly Yearly
Rent (upper) $2,500 $2,500 $30,000
Rent (lower) $2,500 $30,000
Property Tax Rate (Approx.) 2.5%  
Property Taxes   $127 $1,520
Insurance   $115 $1,380
Repairs   $65 $780
Variable-Cost PM   4.7%  
Property Management Fee $118 $1,410
Leasing Fee 60% $62.5 $750
HOA   $17 $200
Vacancy Rate   4.0%  
Total Fixed Expenses $599 $7,184
 Total Expenses (Fixed + Mortgage) $1,718 $20,618

Financial Analysis / Deal Attractiveness
Years: 5 10
 Cap Rate 6.1% 6.8%
 Net Cash Flow $51,567 $115,493
 Equity Increase $124,728 $274,581
 Total Gain $176,296 $390,074
     
 Average Cash Flow/Year $10,313 $11,549
 Average Cash Flow/Month $859 $962
 Average Gain/Year $35,259 $39,007
 Average ROI 103.7% 229.5%
 Annual ROI 20.7% 22.9%
 Projected Property Value $529,244 $643,906

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Disclaimer

Information contained herein was obtained from sources deemed reliable, however, Simply Do It and/or the owner(s) of the property make no guarantees, warranties or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice. The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Simply Do It and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info 

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