Earlier this year, a woman we bought a townhouse from previously texted me about some other properties she was looking to sell.

She was moving closer to retirement and wanted to spend less time being a landlord and more time enjoying life. The tenants at these properties were moving out and she wanted to know if I was interested before putting them on the market.

After digging into the records, I found out she actually owned four adjacent townhouses.

Over the next few weeks, we texted and talked several times. I learned she was open to selling all four townhouses in one transaction and I found out what was most important to her: A simple process where she didn’t have to do anything.

That was the key.

The townhouses were in good shape, but the rents were well below market. We own a bunch of similar properties in this same neighborhood and I knew that the four properties were worth around $25,000 more than the purchase price.

I was happy about the instant equity and super excited about the long-term cash flow potential.

But there was an issue … we weren’t planning for this purchase and didn’t have nearly enough cash to put 20% down on all four properties. We were stuck.

After kicking around different options, I finally asked the seller if she would be interested in offering owner financing. She was, as long as I handled all the paperwork.

After checking with our lender, we sent her a contract the next day that included nearly $50,000 in seller financing, paid with no interest over a three-year period. She signed it immediately.

While the payments on the loan with the seller come close to wiping out all the immediate “profit” on the properties, the reality is that we plan on holding these for a very long time. But the loan only lasts for a few years, probably even less.

Since we closed, we’ve made upgrades to the townhouses, brought the rents up to market rate, and currently have all of them leased. It’s fantastic.

This was the first time I was forced to come up with a more creative deal structure, but it worked and I can’t wait to try it again.