Amplify On Collateral For Rent Please? - Posted by MN~Chicago


#1

Posted by Soapymac on January 21, 1999 at 06:08:39:

and I knew it would happen some day…

You Lost Me!

I won’t re-write what “MN~Chicago” said, because with the exception of the $30K downpayment, I was thinking the same question. I made the assumption that the $30K was from funds you had available.

350K FMV

300K Sale
-30K Down

270K To Finance

If you use the investor’s 270K to cover this, then write the compensating 270K to the investor, at a 90% LTV, this leaves 45K (350K-315K) available equity.

How do you write a 70K new mortgage on a 45K equity…legally? I understand the substitution process of making the 270K note a second.

Soapymac


#2

Amplify On Collateral For Rent Please? - Posted by MN~Chicago

Posted by MN~Chicago on January 20, 1999 at 13:54:37:

John:

A superb example of creativity!

Could you amplify, for the occasionally
understanding-impaired, what monies went
where:

If the investor used his house as collateral
for rent, it looks like he received $30,000
for the downpayment and $604.77/month for the
3%.

You took a loan for $270,000 and gave a
compensating note for same in return. Then
you took another $70,000…to repay your
$30,000 downpayment (?)…and who got the
$40,000 “in the bank,” and why?

What did you do with the $270,000 loan, and
how did it tie in with the $315,000 line of
credit? Wasn’t your line of credit in conflict
with the $70,000 first and $270,000 second =
$340,000.

How much money was available to buy discounted
notes to make this work, given the above?

What did I miss?