What is a Articles of Agreement for Deed? Also known as a “Land Contract” or “Contract for Deed” in some states. An AAD is an agreement between a home buyer, under which the buyer agrees to pay to the home seller the purchase price (plus and agreed upon interest rate) in installments over a set period of time.

Upon execution of the AAD the home buyer immediately takes possession, but the seller retains legal title to the property until the buyer pays the full purchase price.

The seller delivers the deed to the buyer once the final payment is made. Installment contracts or articles for warranty deed are an alternative to traditional home financing and can benefit both the seller and buyer in a real estate transaction.

Finding the Property

Now for this property it was a simple driving around in a boat. I saw I for sale sign and I gave it a call.

After discussing with the realtor what the sellers situation was it peaked my interest. The home was an estate sale. The daughter inherited the house from her parents that recently passed away. The house was in bad disarray from years of neglect. A horrible smell and insect issue combined with an unwelcome raccoon guest in the attic made this a fun deal!

Structuring the Deal

Since the house was in bad working order with roof leaks, floor coming up and plumbing drains that just drained into the crawl space the daughter didn’t have the money to invest int he house to make it sell-able let alone pass any type of home owners inspection.

Here is how the buy numbers folded out:

  • Purchase Price: $188,000
  • Down Payment $37,500 (20% down).
  • Tax Credit of $5,262.40 from seller. $32,438, actual down payment.
  • Balance Financed $150,000
  • 3 Year Term
  • 5% interest rate
  • 30 year amortization
  • $807.92 P & I payment
  • $438.53 property taxes
  • HOI is payed over the term by the seller


This house had a million dollar view with a shack sitting on top of a hill begging for a face lift. Kitchen, Bathrooms, roof, you name it it needed to be done. Below is a lost of things completed making this one hell of a lake shack.

Before Kitchen
  • Demo $500
  • New Kitchen Cabinets $2,500
  • New Maple Counter tops $1,000
  • New Appliances $3,500
  • Flooring $3,000
  • Electric $2,500
  • Plumbing $2,000
  • Drywall $3,000
  • Painting $1,500
  • Structural $1,000
  • Decking $4,000
  • Landscaping $1,500
  • Windows & Doors $5,000
  • Roof $10,000
  • Lighting $800
  • Total Budget on Remodel $41,800
Before Bathroom Plumbing
Before Front House Elevation
  • Full kitchen gut and remodel
  • 2-Bathrooms gut and remodel
  • Originally it only had 1 working bathroom and 2 bedrooms.
  • Converted a send unused bathroom into a second bathroom and laundry room.
  • Converted a 3 season room on the side of the house into 2 new bedrooms making this a 4 bed 2 bath!
  • New Roof
  • New front and backyard large decks
  • All new windows and doors in & out
  • Gutted every room down to the studs, re-insulated & new drywall
  • Updated electric panel & plumbing
  • Paint inside and out
Kitchen Remodel After


4 bedroom 2 bathroom Lake house with an incredible view I market it on 2 websites. Turbotenant.com and Cozy.co. Both are distribution sites that send your listing to websites like Realtor.com, Zillow, Facebook, ect. These websites also have a built in background check system and a credit check system where the prospective tenant can pay direct with them and you receive them back in real time. The cost is $35-$45.

  • Rental Income: $2,500
  • Loan Payment: $807.92  (5% interest)
  • Taxes: $438.53/month
  • Insurance: $50/month
  • Total Fixed Expenses: $1,296 per month.
  • Base Cash Flow: $1,204.00 per month.
  • Note: I did not include capital expenditures, monthly repairs or management fees. I will self manage this place for the first 5 years to keep costs down. Everything is basically brand new so no other repairs will be needed. After the 5 year mark I will refinance again to lower the payment and then I will add those fee into my costs.


Now comes the fun part. Refinancing.

With all the improvements made to this lake house. Along with adding 2 more bedrooms and adding an additional bathroom the property appraised for $250,000. Here is how the refinancing numbers broke down:

  • ARV (After Remodeled Value) Appraisal came back at $250,000
  • Original sale price $188,000
  • Remodeling costs $41,800
  • Total into the property $229,800
  • Bank refinanced 75% of the ARV- $187,500
  • New payment on a 30 year conventional loan with Taxes & insurance included $1,600
  • $32,438 original down payment + $41,800 remodeling costs= $74,238
  • New total cash flow $ 900.00

I decided to keep all my equity in this property, not cash out & go with the lower payment in order to have a higher cash return on my investment. It will now cash flow $900 per month. A little under 15% cash on cash return on $74,238.


After Front Elevation. (Currently working on new porch roof & stone pillars)
After. 40 foot x 30 foot deck

My long term hold plan on this property is to:

  • Have the tenant pay down the mortgage
  • Property will appreciate in time
  • Cash out refinance or refinance and lower the payment for additional cash on cash returns every 5-7 years.