I was approached by a friend who wanted to buy farmhouse on a property on 2.2 acres of land. To sum it up..."Forever Home". His efforts, though noble and what seemed like a a worthwhile investment was to land me $10k of his to purchase the property for him because he couldn't.
Like many Americans divorce had chewed up and pooped out his credit and it turned a man earning a VERY comfortable living, into a guy trying to scratch up a deal. In my heart I wanted to lend my money and credit to him, but my gut just kept me thinking, "That's not a deal". I would have to come up with the rest of the cash for the down payment and extend my credit until he could refinance after repairing the property. Maybe that would work for some, but I need my credit, leverage, and cash.
I thought about it constantly, his passion for this house made me look at it inside out, backwards, forwards, in German, and even in prayer to the deal making gods. How do I help a friend get what he wants but have it make sense, no, not just make sense...but make it an amazing deal? I bounced between my sophisticated investor self to my sympathetic friend self over and over. But, I had determined 2017 wasn't going to be about sympathy, but empathy for others with respect for my business acumen and pride in being a sharp investor. How could I start looking for private $ if I couldn't keep from blending friendship and business.
BOOM! I was struck by a CRAZY idea. Over the weeks prior we had talked about this deal and finally we had all the numbers we needed to see both what the property was worth and what the seller would need to get out from under an auction purchase they had made but never put any work into. IT WAS THE LAND!!
This farmhouse was on 2.2 acres but it was really on 6.6 acres they were trying to sell separately. If we could offer on all of it, have my partner in finance swing a no or low down loan for the whole thing through USDA or FHA, and I front the cash to get the deal done...my friend was going to gift me the land in the deal after the partnership would dissolve once he could finance out of our original loan in 12-16 mos.
Thats free acreage people! and from what I know...that factory making more shut down years ago.
As we are still working this deal out on the financing end...it may be one of my most creative solutions and land grabs!
It just goes to show you, never ask can I? Ask HOW CAN I!!! Perhaps the answer isn't so crazy after all.
Illinois's first tiny house park may soon be a reality folks, and if my next deal works out, my tiny house park rent will come with river front access!!! Stay tuned.