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.

Ok now that we got the definition out of the way, on to how this deal folded out.

Finding the Property

As in most real estate transactions its all about person to person, hand shaking and deal making. NETWORKING AND CREATING LIFE LONG RELATIONSHIPS. That’s how I found this deal!

Through one of my brokers ( I work with a handful of them in my target area that find me off market deals) She found me this property where she was managing this property for an out of state landlord and he wanted out of the game. He was sick and tired of a bad string of tenants and constant unnecessary repairs.

His exit is now my entrance!

Structuring the Deal

So with every real estate deal I am a strong believer in that it must be a win win for both the buyer and seller. I believe in honesty and integrity for this is a small industry and people talk. So I wanted to help the seller get out of this nightmare and at the same time make a solid profit

Here is how the buy numbers folded out:

  • Purchase Price: $145,000
  • Down Payment $13,000 (a little under 10%).
  • Tax Credit of $1529.16 from seller. $11,983.69 actual down payment.
  • Balance Financed $132,000
  • 10 Year Term
  • 5% interest rate
  • 30 year amortization
  • $708.60 P & I payment
  • $306.00 property taxes
  • HOI is payed over the term by the seller


In most cases the day of closing I will have cleaning and construction crews scheduled to work that day but this property literally didn’t need a thing except for a fresh coat of paint, yard cleanup and some TLC. AS I mentioned before the seller maintained this property so well in fact that very little needed to be done!

Rental & Management

Based on 3 bedroom rental rates from https://www.rentometer.com/ the average median rent is $1,413 per month. Based on this amount I decided to rent it slightly under the rate to attract more tenants at $1,375. All utilities are paid for by the tenant.

Once the property is fully remodeled and goes through a systems checklist we market the property on distribution websites that take my listing and distribute it to Realtor.com, Zillow, Facebook, etc.

Typically we hold 2 open houses per week. Wednesday and Friday from 4pm-6pm. On this specific property the first open house brought in 43 showings, 5 prospective tenants applying and we signed a lease the next day!

We are STRONG believers in managing the property right! Having constant contact with the tenant shows you care about them and their well being in their new home. This is their new home and you want them to occupy it with little to no stress. So by being in constant contact with them shows we care.

Here is how the cash flow breaks down on the rental side monthly:

  • Articles payment $708.60
  • Property Taxes $306
  • Total Front End Expenses $1,014.60
  • Rent payment $1,375
  • Total cash flow $360.40

Now of coarse this amount doesn’t include property management expenses, repairs & capital expenditures. But this property was fully remodeled and maintained perfectly. We will also be self manage this property to keep expenses to a minimum.


Win win deal! The seller got out of an out of state property, was able to hang up their landlord shoes up and retire from this headache.

We acquired a great rental with a solid cash flow with very little money down. We are also able to write off the property taxes, capital improvements & cost segregation depreciation at an accelerated rate.