Hi guys and gals; it has been a few months since my last writing. I’ve been working on diversifying my real estate investment strategy. What I want to share with you today is how my first seller finance deal was accidental.
The Back Story
If you’ve been around BiggerPockets for a while, you may know that I typically stick to wholesaling, and I have a smaller portfolio of rentals. This is where I am comfortable, but I know if I want to reach my goal of 50 doors by the age of 50, I need to move things a long. So I’m working on increasing my portfolio by leveraging some of the assets I have in order to acquire more. Well in doing so, we made a bad purchase. I say “we” because I let the emotions of a partner skew my decision.
We purchased a small frame house in a rural area. The house being small wasn’t a issue. The rural area was not the complete issue either. But the house being small and in this certain rural area was an issue.
Our problem was that we purchased this property for one specific reason: to help homeless teens. We did not look into this project as a money maker, it was more philanthropic. We looked at this project without our investor hats on, and we did not have multiple exit strategies.
Let me outline the problem. We did our research and found out through our network there were government subsidies allotted for the project. So not only can we give to the community, but the project could be profitable as well. So we were all in. We acquired the property, subsidies were awarded to us to complete the majority of the rehab, and of course we had county approval. Here’s the problem: During this time, there were county elections, and politics got in the way. Ultimately, the newly elected county commissioner disallowed the project. Here we were with a (small) loan on a property, in a rural d-class area, and vacant. What the heck am I going to do with this property? I wanted to know.
We, or rather, I should say “I,” had to look at the bright side, although it was not glaring. We had a property with a $20,000 note. We had completely rehabbed with money…