Welcome to the second part of my little series of case studies about how I grew my portfolio by 60 in Q3 of this year. In my first post, I told you about the first four units—a great Supercharged Seller Financing acquisition.
Today, I’m excited to pick up from where we left off.
Two Neighboring Triplexes
One day in the early summer, I got a call from a woman who had Googled something to the effect of “Portland realtors who specialize in plexes.” I was grateful—and a little surprised!—when she called. I quickly learned she and her husband owned two triplexes next door to each other. In reality, it really operated as a 6-plex, just with two buildings. As we discussed me helping them sell these properties, it quickly became clear that they would be better served by an installment sale (IRS lingo for seller financing that can be structured to help defer capital gains).
Of course, at this point (like normal, frankly), I didn’t have much cash to work with—I was just closing on the previous four units I told you about yesterday. BUT, I was working on a big refinance of two existing properties (both four-plexes), and it was designed to spit out a good chunk of cash. (Those refinances, BTW, are by themselves a MASSIVE complex case study in using Supercharged Seller Financing). I refinanced both properties without paying off all the underlying debt, which instead I moved around within my portfolio. Ah, the magic of Supercharged Seller Financing is incredible—that’s why I love teaching it to my coaching clients.
So we drew up two deal: $550k for each triplex, $50k down, $500k on a note at 5.5% for 20 years. We did our due diligence, and some issues came up (just like with the four-plex), but we were able to resolve those with a credit at closing of $26k on one of the properties. So, I ended up using $74k of cash to close on those two properties for a total of $1.1 million.
(And once again, just like in yesterday’s four-plex story, arguably the best part was the $1 million in excellent Supercharged Seller Financing I can continue using in my portfolio for 20 years).
I think I’m going to need more than 3 parts to tell you all these case studies. So tomorrow, I’ll share Part 2.5 about a great duplex. 😊